NAC616B.436. Required deposit: Form; management of certain securities; evaluation of certain securities and assets.

     1. Except as otherwise provided in subsection 3 of NRS 616B.300, a self-insured employer shall meet the deposit requirement of the self-insured program of workers’ compensation by depositing with the Commissioner any of the following:

     (a) Cash.

     (b) A certificate of deposit, from a financial institution in this State that is insured federally, made payable to the Commissioner of Insurance and the employer.

     (c) The following securities, if they have a date of maturity that is not more than 1 year:

          (1) Any obligation guaranteed by the full faith and credit of the United States, including:

               (I) United States treasury notes;

               (II) United States treasury bills; and

               (III) Internal money market funds related to United States treasury notes or treasury bills, if the account is maintained with a financial institution in this State and does not exceed $10,000; or

          (2) Any obligation of an agency of the United States, including the Federal National Mortgage Association, Federal Housing Finance Board and Federal Home Loan Mortgage Corporation, that is guaranteed by the full faith and credit of the United States. If the obligation is an internal money market fund related to the Federal National Mortgage Association, Federal Housing Finance Board or Federal Home Loan Mortgage Corporation, the account must be maintained with a financial institution in this State and may not exceed $10,000.

Ê The securities deposited in compliance with this paragraph must have a fair market value of not less than 105 percent of the employer’s expected annual incurred cost of claims, unless reduced by excess insurance in an amount approved by the Commissioner.

     (d) A surety bond, if it is:

          (1) Written by an insurer authorized and licensed to transact the business of surety insurance in this State; and

          (2) Countersigned by a producer of insurance appointed by the insurer.

     (e) A letter of credit that meets the standards set forth in NAC 616B.439.

     (f) Any combination of cash, certificates of deposit, securities guaranteed by the full faith and credit of the United States, surety bonds or letters of credit. Priority of payment in case of loss must be in the order stated in this paragraph.

     2. Securities guaranteed by the full faith and credit of the United States that are deposited in accordance with this section will be held in trust and administered by the Commissioner, unless:

     (a) The self-insured employer elects to use the services of a custodial financial institution in this State for trust investments;

     (b) The custodial financial institution holds and administers the securities on behalf of the Commissioner under an agreement approved by the Commissioner; and

     (c) The custodial financial institution provides monthly statements of the account to the Division of Insurance of the Department of Business and Industry. The accuracy of each such statement must be certified monthly by a trust officer of the financial institution.

Ê A deposit made pursuant to this subsection may not be withdrawn except upon written order of the Commissioner. A deposit must be revised on or before June 30 each year or as the Commissioner determines to be appropriate and necessary.

     3. If necessary, the Commissioner may select a competent specialist to make an evaluation:

     (a) Before accepting for deposit any security of the United States or asset; or

     (b) At any time after the security of the United States or asset is deposited with the Commissioner or held by a custodial financial institution in this State.

Ê The self-insured employer shall pay the cost of any such evaluation.

     4. As used in this section, “producer of insurance” has the meaning ascribed to it in NRS 679A.117.

     [Comm’r of Insurance, PC-25 § 13, eff. 8-6-80]—(NAC A 1-4-91; 1-24-92; 3-22-96; R112-04, 8-25-2004; R102-09, 1-28-2010)