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- 83rd Session (2025)
Senate Bill No. 503–Committee on Finance
CHAPTER..........
AN ACT relating to insurance; eliminating the Account for the
Regulation and Supervision of Captive Insurers in the Fund
for Insurance Administration and Enforcement; and
providing other matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law creates the Fund for Insurance Administration and Enforcement
and requires the Fund to be used solely for the administration and enforcement of
the Nevada Insurance Code and other laws and regulations enforced by the
Division of Insurance of the Department of Business and Industry. (NRS 680C.100)
Existing law creates within the Fund an Account for the Regulation and
Supervision of Captive Insurers. (NRS 694C.460) Under existing law, various fees
and assessments receiv ed by the Commissioner of Insurance or the Division
pursuant to the provisions of existing law governing captive insurers and 25 percent
of the revenues collected from the tax imposed upon the premiums of a captive
insurer are required to be credited to th e Account. (NRS 694C.450, 694C.460)
Existing law restricts the purposes for which money in the Account may be used.
(NRS 694C.460)
Sections 1 and 2 of this bill eliminate the Account. Sections 1 and 2 require
the fees, assessments and taxes which are required to be credited to the Account
under existing law to instead be credited to the Fund, thereby authorizing such fees,
assessments and taxes to be used for any other purpose for which any money in the
Fund may be used. Section 3 of this bill requires any money remaining on July 1,
2025, in the Account to remain in the Fund and specifically authorizes the money to
be used for any other purpose for which any money in the Fund may be used.
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 694C.450 is hereby amended t o read as
follows:
694C.450 1. Except as otherwise provided in this section, a
captive insurer shall pay to the Division, not later than March 1 of
each year, a tax at the rate of:
(a) Two-fifths of 1 percent on the first $20,000,000 of its net
direct premiums;
(b) One-fifth of 1 percent on the next $20,000,000 of its net
direct premiums; and
(c) Seventy-five thousandths of 1 percent on each additional
dollar of its net direct premiums.
2. Except as otherwise provided in this section, a captive
insurer shall pay to the Division, not later than March 1 of each
year, a tax at a rate of:
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(a) Two hundred twenty -five thousandths of 1 percent on the
first $20,000,000 of revenue from assumed reinsurance premiums;
(b) One hundred fifty thousandths of 1 percent on the next
$20,000,000 of revenue from assumed reinsurance premiums; and
(c) Twenty-five thousandths of 1 percent on each additional
dollar of revenue from assumed reinsurance premiums.
The tax on reinsurance premiums pursuant to this subsecti on
must not be levied on premiums for risks or portions of risks which
are subject to taxation on a direct basis pursuant to subsection 1. A
captive insurer is not required to pay any reinsurance premium tax
pursuant to this subsection on revenue related to the receipt of assets
by the captive insurer in exchange for the assumption of loss
reserves and other liabilities of another insurer that is under
common ownership and control with the captive insurer, if the
transaction is part of a plan to discontinue the operation of the other
insurer and the intent of the parties to the transaction is to renew or
maintain such business with the captive insurer.
3. If the sum of the taxes to be paid by a captive insurer
calculated pursuant to subsections 1 and 2 is less than $5,000 in any
given year, the captive insurer shall pay a tax of $5,000 for that
year. The maximum aggregate tax for any year must not exceed
$175,000. The maximum aggregate tax to be paid by a sponsored
captive insurer applies only to each prote cted cell and does not
apply to the sponsored captive insurer as a whole.
4. Two or more captive insurers under common ownership and
control must be taxed as if they were a single captive insurer.
5. Notwithstanding any specific statute to the contrary and
except as otherwise provided in this subsection, the tax provided for
by this section constitutes all the taxes collectible pursuant to the
laws of this State from a captive insurer, and no occupation tax or
other taxes may be levied or collected from a captive insurer by this
State or by any county, city or municipality within this State, except
for taxes imposed pursuant to chapter 363A , 363B or 363C of NRS
and ad valorem taxes on real or personal property located in this
State used in the production of income by the captive insurer.
6. Twenty-five percent of the revenues collected from the tax
imposed pursuant to this section must be deposited with the State
Treasurer for credit to the [Account for the Regulation and
Supervision of Captive Insurers ] Fund for Insurance
Administration and Enforcement created [pursuant to NRS
694C.460.] by NRS 680C.100. The remaining 75 percent of the
revenues collected must be deposited with the State Treasurer for
credit to the State General Fund.
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7. A captive insurer that is issued a license pursuant to this
chapter after July 1, 2003, is entitled to receive a nonrefundable
credit of $5,000 applied against the aggregate taxes owed by the
captive insurer for the first year in which the captive insurer incurs
any liability for the payment of taxes pursuant to this section. A
captive insurer is entitled to a nonrefundable credit pursuant to this
section not more than once after the captive insurer is initially
licensed pursuant to this chapter.
8. As used in this section, unless the context otherwise
requires:
(a) “Common ownership and control” means:
(1) In the case of a stock insurer, the direct or indirect
ownership of 80 percent or more of the outstanding voting stock of
two or more corporations by the same member or members.
(2) In the case of a mutual insurer, the direct or indirect
ownership of 80 percent or more of the surplus and the voting power
of two or more corporations by the same member or members.
(b) “Net direct premiums” means the direct pre miums collected
or contracted for on policies or contracts of insurance written by a
captive insurer during the preceding calendar year, less the amounts
paid to policyholders as return premiums, including dividends on
unabsorbed premiums or premium deposi ts returned or credited to
policyholders.
Sec. 2. NRS 694C.460 is hereby amended to read as follows:
694C.460 [1. There is hereby created in the Fund for
Insurance Administration and Enforcement created by NRS
680C.100 an Account for the Regulation and Supervision of Captive
Insurers. Money in the Account must be used only to carry out the
provisions of this chapter or for any other purpose authorized by the
Legislature.] Except as otherwise provided in NRS [680C.110 and]
694C.450, all fees and assessments received by the Commissioner
or Division pursuant to this chapter must be credited to the
[Account. Not more than 2 percent of the tax collected and
deposited in the Account pursuant to NRS 694C.450, may, upon
application by the Division or an agency for economic development
to, and with the approval of, the Interim Finance Committee, be
transferred to an agency for economic development to be used by
that agency to promote the industry of captive insurance in this
State.
2. Except as otherwise provided in this section, all payments
from the Account for the maintenance of staff and associated
expenses, including contractual services, as necessary, must be
disbursed from the State Treasury only upon warrants issued by the
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State Controller, after receipt of proper documentation of the
services rendered and expenses incurred.
3. At the end of each fiscal year, that portion of the balance in
the Account which exceeds $500,000 must be transferred to the
State General Fund.
4. The State Controller may anticipate receipts to the Account
and issue warrants based thereon. ] Fund for Insurance
Administration and Enforcement created by NRS 680C.100.
Sec. 3. Any money remaining on July 1, 2025, in the Account
for the Regulation and Supervision of Captive Insurers created by
NRS 694C.460 remains in the Fund for Insurance Administration
and Enforcement created by NRS 680C.100 and may be used for
any other purpose for which any money in the Fund may be used.
Sec. 4. This act becomes effective on July 1, 2025.
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