AB512

Existing law prohibits an insurer from issuing or renewing a policy of liability insurance that contains a provision that: (1) reduces the limit of liability stated in the policy by the costs of defense, legal costs and fees and other expenses for claims; or (2) otherwise limits the availability of coverage for the costs of defense, legal costs and fees and other expenses for claims. (NRS 679A.210) Existing regulations provide that these prohibitions apply to a policy of casualty insurance that: (1) provides insurance against legal liability arising from the ownership or operation of a motor vehicle; (2) provides insurance against legal liability arising from the ownership of housing occupied by the owner of the housing; (3) is a policy of commercial general liability insurance; (4) is a policy of commercial automobile insurance; or (5) provides insurance covering the professional liability of certain providers of health care. Existing regulations also exempt from the applicability of the prohibitions: (1) a risk retention group; (2) captive insurance that does not cover third-party liability; and (3) a nonadmitted insurer. (Sections 2 and 3 of Adopted Reg. of Comm'r of Insurance, LCB File No. R029-23) Section 1 of this bill codifies those provisions of existing regulations into statute. Existing law provides for the regulation of insurance and insurers in this State by the Commissioner of Insurance. (Title 57 of NRS) Existing law establishes various kinds of insurance an