NAC519A.595. Payment of entry deposit and premiums.

     1. Each participant must pay the entry deposit and premiums required by this section to maintain participation in the bond pool.

     2. If an operator becomes a participant before August 23, 2002, the participant must pay a deposit equal to 15 percent of his or her bond coverage at the time of entry into the bond pool. The amount of the deposit will be adjusted if the bond coverage provided by the pool increases or decreases solely because of a recalculation of the amount of the bond so the deposit is equal to 15 percent of the bond coverage. If the bond coverage provided by the pool increases because the plan is amended, the deposit for the bond will be calculated in the manner provided in subsection 3. The deposit and any addition to the original deposit must remain in the bond pool until the participant has been released by the responsible regulatory authority from further reclamation liability. The deposit will not be released in the event of a forfeiture.

     3. If an operator becomes a participant after August 23, 2002, the amount of the deposit for:

     (a) A bond that is less than $10,000, is 100 percent of the amount of the bond; and

     (b) A bond that is $10,000 or more, is a percentage of the amount of the bond calculated using the following formula:

                                                3

                                          _______

                                          299,000     (amount of bond - 10,000) +50

     4. Annual premiums, established as an equal percentage of each participant’s bond coverage, must be paid by the participant:

     (a) In quarterly installments on or before March 31, June 30, September 30 and December 31; or

     (b) Annually in accordance with a schedule approved by the Administrator or a person designated by him or her.

     5. Upon entry to the bond pool, the participant must, based on the date of entry, pay a prorated amount of the first:

     (a) Quarterly premium; or

     (b) Annual premium, if the participant pays the premium in accordance with a schedule approved by the Administrator or a person designated by him or her pursuant to subsection 4.

Ê After entry to the bond pool, the participant must pay the regular quarterly or annual amount on or before the date the premium is due.

     6. The annual premium will be calculated as follows:

     (a) Except as otherwise provided in paragraph (b), for bonds that were issued before August 23, 2002, the annual premium is 5 percent of the bond coverage of a participant.

     (b) For bonds that are issued on or after August 23, 2002, or for bonds that have increased because the plan is amended, the annual premium:

          (1) Except as otherwise provided in subparagraph (3), for bonds whose total amount is less than $10,000, is 3 percent of the amount of the bonds.

          (2) Except as otherwise provided in subparagraph (3), for bonds whose total amount is at least $10,000, is a percentage of the amount of the bond calculated using the following formula:

                                             - 0.5

                                          _______

                                          299,000     (amount of bond - 10,000) +10

          (3) If the amount of the deposit and the premiums paid by a participant equal or exceed the amount of the bond, is 3 percent of the amount of the bond. For the purposes of this subparagraph, any late penalty paid by a participant will not be considered in determining the amount of the annual premium.

     7. Except as otherwise provided in NAC 519A.610 and 519A.615, the annual premium is nonrefundable.

     8. If a change occurs in the required premium as a percentage of the bond coverage of a participant, the Administrator or a person designated by him or her will notify the participant not less than 30 days before the due date of the next:

     (a) Quarterly premium; or

     (b) Annual premium, if the participant pays his or her premium in accordance with a schedule approved by the Administrator or a person designated by the Administrator pursuant to subsection 4.

Ê The Administrator or a person designated by him or her will base any change in the percentage of the premium on the recommendation of an actuary who is approved by the Commissioner of Insurance to review the status of the bond pool. The findings of the actuary must show that a change in percentage allows the bond pool to remain self-sustaining under statistically expected forfeiture rates and forecasted administrative costs.

     9. The Administrator or a person designated by him or her will:

     (a) Consult with the Risk Management Division of the Department of Administration to determine the availability and cost of obtaining insurance to insure against exposure to a risk that would cause the liability of the bond pool to exceed the amount of money in the bond pool.

     (b) Consult with the Commission to determine whether to obtain such insurance. If the insurance is obtained, the Administrator or a person designated by him or her will establish a schedule for payment of the premiums for each participant based on the participant’s portion of the total liability of the bond pool.

     (c) Notify each participant of the amount of the premium the participant owes not less than 30 days before the premium is due.

     (Added to NAC by Dep’t of Minerals, eff. 10-9-90; A by Div. of Minerals, 11-14-97; A by Comm’n on Mineral Resources by R066-02, 8-23-2002)