SB 503 — Eliminates the Account for the Regulation and Supervision of Captive Insurers in the Fund for Insurance Administration and Enforcement. (BDR 57-1236)

EXEMPTSenate S.B.Bill No.

503503–Committee SENATEon BILLNFinance OCHAPTER.......... .

503–COMMITTEE ON F INANCE M AY 21, 2025 ____________ Referred to Committee on Commerce and Labor SUMMARY—Eliminates the Account for the Regulation and Supervision of Captive Insurers in the Fund for Insurance Administration and Enforcement.

(BDR 57-1236) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

No.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Existing law creates the Fund for Insurance Administration and Enforcement and requires the Fund to be used solely for the administration and enforcement of the Nevada Insurance Code and other laws and regulations enforced by the Division of Insurance of the Department of Business and Industry.

(NRS 680C.100) Existing law creates within the Fund an Account for the Regulation and Supervision of Captive Insurers.

(NRS 694C.460) Under existing law, various fees and assessments received by the Commissioner of Insurance or the Division pursuant to the provisions of existing law governing captive insurers and 25 percent of the revenues collected from the tax imposed upon the premiums of a captivepercentcaptive insurer are required to be credited to the Account.

(NRS 694C.450, 694C.460) Existing(NRS law694C.460)estricts restricts the purposes for which money in the Account may be used.

(NRS 694C.460) Sections 1 and 2 of this bill eliminate the Account.

Sections 1 and 2 require the fees, assessments and taxes which are required to be credited to the Account under existing law to instead be credited to the Fund, thereby authorizing such fees, assessments and taxes to be used for any other purpose for which any money in theees,the Fund may be used.

Section 3 of this bill requires any money remaining on July 1, 2025, in the Account to remain in the Fund and specifically authorizes the money to be used for any other purpose for which any money in the Fund may be used.

-money *SB503*to –EXPLANATION 2 – THEMatter PEOPLEin OFbolded THEitalics STATEis OFnew; NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

matter between brackets [omitted material] is material to be omitted.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

- 83rd Session (2025) – 2 – (a) Two hundred twenty-five thousandths of 1 percent on the first $20,000,000 of revenue from assumed reinsurance premiums;

and (c)dollar Twenty-fiveof thousandthsrevenue offrom 1assumed percentreinsurance premiums.additional  The tax on eachreinsurance additionalpremiums dollarpursuant to this subsection must not be levied on premiums for risks or portions of revenuerisks fromwhich assumedare reinsurancesubject premiums.to taxation on a direct basis pursuant to subsection 1.

A Thecaptive taxinsurer onis not required to pay any reinsurance premiumspremium tax pursuant to this subsection muston notrevenue berelated leviedto onthe premiumsreceipt of assets by the captive insurer in exchange for risksthe orassumption portionsof loss reserves and other liabilities of risksanother whichinsurer arethat subjectis tounder taxationcommon onownership and control with the captive insurer, if the transaction is part of a directplan basisto pursuantdiscontinue the operation of the other insurer and the intent of the parties to subsectionthe 1.transaction is to renew or maintain such business with the captive insurer.

A captive insurer is not required to pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer.

Notwithstanding any specific statute to the contrary and except as otherwise provided in this subsection, the tax provided for - *SB503* – 3 – by this section constitutes all the taxes collectible pursuant to the laws of this State from a captive insurer, and no occupation tax or other taxes may be levied or collected from a captive insurer by this State or by any county, city or municipality within this State, except for taxes imposed pursuant to chapter 363A, 363B or 363C of NRS and ad valorem taxes on real or personal property located in this State used in the production of income by the captive insurer.

- 83rd Session (2025) – 3 – 7.

A captive insurer that is issued a license pursuant to this chapter after July 1, 2003, is entitled to receive a nonrefundable credit of $5,000 applied against the aggregate taxes owed by the captive insurer for the first year in which the captive insurer incurs anycaptive liabilityinsurer foris entitled to a nonrefundable credit pursuant to this section not more than once after the paymentcaptive ofinsurer taxesis initially licensed pursuant to this section.chapter.

A captive insurer is entitled to a nonrefundable credit pursuant to this section not more than once after the captive insurer is initially licensed pursuant to this chapter.

There is hereby created in the Fund for Insurance Administration and Enforcement created by NRS 680C.100 an Account for the Regulation and Supervision of Captive Insurers.provisions of this chapter or for any other purpose authorized by the Legislature.] Except as otherwise provided in NRS [680C.110 and] 694C.450, all fees and assessments received by the Commissioner or Division pursuant to this chapter must be credited to the [Account.

Money in the Account must be used only to carry out the provisions of this chapter or for any other purpose authorized by the Legislature.] Except as otherwise provided in NRS [680C.110 and] - *SB503* – 4 – 694C.450, all fees and assessments received by the Commissioner or Division pursuant to this chapter must be credited to the [Account.

Except as otherwise provided in this section, all payments from the Account for the maintenance of staff and associated expenses, including contractual services, as necessary, must be disbursed from the State Treasury only upon warrants issued by the - 83rd Session (2025) – 4 – State Controller, after receipt of proper documentation of the services rendered and expenses incurred.

At the end of each fiscal year, that portion of the balance in the Account which exceeds $500,000 must be transferred to the StateSta4. General Fund.

4.

H~~~~~ 25 - *SB503*83rd Session (2025)