Provision of substitute benefits and coverage with respect to life and health insurance policies and annuities. When proceeding pursuant to paragraph (b) of subsection 2 of NRS 686C.152, the Association shall:
1. With respect to life and health insurance policies and annuities, ensure payment of benefits for premiums identical to the premiums and benefits, except for terms of conversion and renewability, which would have been payable under policies or contracts of the insolvent insurer, for claims incurred with respect to:
(a) A group policy or contract, not later than the earlier of the next renewal date under the policy or contract or 45 days, but in no event less than 30 days, after the date when the Association becomes obligated with respect to that policy or contract.
(b) A nongroup policy, contract or annuity, not later than the earlier of the next renewal date, if any, under the policy, contract or annuity or 1 year, but in no event less than 30 days, after the date when the Association becomes obligated with respect to that policy, contract or annuity.
2. Make diligent efforts to provide all known insureds or owners with respect to group policies or contracts, or annuitants with respect to annuities, 30 days’ notice of termination of the benefits provided pursuant to subsection 1.
3. With respect to nongroup life and health insurance policies and annuities, make available substitute coverage on an individual basis, in accordance with the provisions of subsection 4, to each known insured or annuitant, or owner if other than the insured or annuitant, and to each natural person formerly insured, or formerly an annuitant, under a group policy who is not eligible for replacement group coverage, if the insured or annuitant had a right under law or the terminated policy or annuity to convert coverage to individual coverage or to continue an individual policy or annuity in force until a specified age or for a specified period, during which the insurer had no right unilaterally to make changes in any provision of the policy or annuity or had a right only to make changes in premium by class.
4. In providing the substitute coverage required under subsection 3, the Association may offer to reissue the terminated coverage or to issue an alternative policy that must be offered without requiring evidence of insurability or a waiting period or exclusion that would not have applied under the terminated policy, and may reinsure any alternative or reinsured policy.
Last modified: February 27, 2006