NAC695F.200. Reserves.

     1. An organization shall:

     (a) Maintain the reserve required to be set aside pursuant to subsection 1 of NRS 695F.190. The reserve must be:

          (1) Based on the premiums collected for the immediately preceding calendar year, as reported on the annual report of the organization filed with the Commissioner; and

          (2) Designated as a “write-in liability” on each report of the organization filed with the Commissioner.

     (b) After the first year of operation, set aside a reserve for incurred but unreported claims in an amount equal to at least 5 percent of its earned premiums for the immediately preceding calendar year, as reported on the annual report of the organization filed with the Commissioner, or $250,000, whichever is greater. The reserve for incurred but unreported claims must be included with the claims unpaid and the unpaid claims adjustment expenses.

     2. No organization may reduce the reserve for incurred but unreported claims unless it notifies the Commissioner in writing and receives his or her written approval of the reduction. Any unauthorized reduction in this reserve creates a presumption that the organization is in an unsound financial condition.

     3. The reserve for incurred but unreported claims must be deposited in a trust account in a federally insured financial institution located in this State. The income earned on money in the account must be paid to the organization and used for its operations.

     (Added to NAC by Comm’r of Insurance, eff. 2-3-97; A by R250-03, 11-12-2004)