Within the intent of this chapter, the business of apportioning and distributing losses arising from specified causes among all those who apply and are accepted to receive the benefits of such service, is public in character, and requires that all those having to do with it shall at all times be actuated by good faith in everything pertaining thereto, shall abstain from deceptive or misleading practices, and shall keep, observe and practice the principles of law and equity in all matters pertaining to such business. Upon the insurer, the insured, and their representatives, shall rest the burden of maintaining proper practices in said business.

The Department of Insurance shall have general supervision, control, and regulation of insurance companies, associations, and societies and the business of insurance in Nebraska, including companies in process of organization. The Director of Insurance shall be the chief administrative officer of the department. The director shall have the power and duty to enforce and execute all the insurance laws of this state and to adopt and promulgate all needful rules and regulations for the purpose of carrying out the true spirit and meaning of Chapter 44 and all laws relating to the business of insurance and, to that end, may authorize and empower an assistant or employee to do any and all things that he or she may do and on his or her behalf, and he or she shall see that all laws respecting insurance companies and insurance agents are faithfully executed. The director or his or her representative shall issue all certificates and licenses as provided for in Chapter 44. If the applicant is an individual, the application for a certificate or license shall include the applicant's social security number. The director and his or her authorized representative shall have the power and authority to do all things and to perform all acts the department is given the power and authority to do.

For purposes of Chapter 44, unless the context otherwise requires, insurance shall mean a contract whereby one party, called the insurer, for a consideration, undertakes to pay money or its equivalent or to do an act valuable to another party, called the insured, or to his or her beneficiary, upon the happening of the hazard or peril insured against whereby the party insured or his or her beneficiary suffers loss or injury.

For purposes of Chapter 44, insurance does not include a service contract. For purposes of this section, service contract means (1) a motor vehicle service contract as defined in section 44-3521 or (2) a contract or agreement, whether designated as a service contract, maintenance agreement, warranty, extended warranty, or similar term, whereby a person undertakes to furnish, arrange for, or, in limited circumstances, reimburse for service, repair, or replacement of any or all of the components, parts, or systems of any covered residential dwelling or consumer product when such service, repair, or replacement is necessitated by wear and tear, failure, malfunction, inoperability, inherent defect, or failure of an inspection to detect the likelihood of failure.

For purposes of Chapter 44, unless the context otherwise requires:

(1) The terms company, corporation, insurance company, or insurance corporation shall include all corporations, associations, partnerships, or individuals engaged as insurers in the business of insurance;

(2) Domestic designates those companies incorporated or formed in this state;

(3) Foreign designates those companies incorporated or formed under the laws of the United States or any other state in the United States and alien designates those companies incorporated or formed under the laws of any country other than the United States;

(4) Admitted company or authorized company designates a company qualified and licensed to transact business under Chapter 44;

(5) Nonadmitted company or unauthorized company designates a company not licensed to transact business in this state under Chapter 44;

(6) Unearned premiums and net value of policies severally shall mean the liability of an insurance company upon its insurance contracts, other than accrued claims, computed by rules of valuation established herein;

(7) Profits of a mutual company shall mean that portion of its cash funds not required for payment of losses and expenses nor set apart for any purpose allowed by law;

(8) Agent or insurance agent shall mean an insurance producer;

(9) Broker or insurance broker shall mean an insurance producer;

(10) Insurance producer or producer shall mean a person required to be licensed under the laws of this state, including the Insurance Producers Licensing Act, to sell, solicit, or negotiate insurance;

(11) Adjuster or insurance adjuster shall mean a person, copartnership, or corporation who undertakes to ascertain and report the actual loss or damage to the subject matter of the insurance due to the hazard or peril insured against;

(12) Director shall mean the Director of Insurance;

(13)(a) Insurable interest shall mean every interest in property or any relation thereto, or liability in respect thereof, of such a nature that a contemplated peril might directly damnify the insured.

(b) Insurable interest, in the matter of life and health insurance, exists when the beneficiary because of relationship, either pecuniary or from ties of blood or marriage, has reason to expect some benefit from the continuance of the life of the insured;

(14) Double insurance exists when the same party is insured by several insurers separately in respect to the same subject and interest;

(15) Overinsurance exists when a party having an insurable interest in property has insurance thereon against the same hazard or peril in excess of the actual value of his or her interest therein;

(16) Reinsurance shall mean a contract by which an insurer procures a third party to insure it against loss or liability by reason of such original insurance;

(17) Department shall mean the Department of Insurance;

(18) Rebate shall mean anything of value or the making of an agreement, expressed or implied, that will directly or indirectly diminish any premium below the amount specified in the policy but shall not include the dividend or refund paid or allowed on participating policies nor bonuses paid or allowed directly by any company upon nonparticipating policies which have been in force at least five years;

(19) Stock company shall mean a company with a capital stock that charges a fixed premium and is required to maintain the reserve provided by Chapter 44;

(20) Mutual company shall mean a company without capital stock that charges a fixed premium and is required to maintain the same reserve as a stock company;

(21) Assessment association shall mean a company that meets its losses and expenses from assessment levied upon its members; and

(22) Insurer shall include all companies, exchanges, societies, or associations whether organized on the stock, mutual, assessment, or fraternal plan of insurance and reciprocal insurance exchanges.

Before granting a certificate of authority to any insurance company to issue policies or make contracts of insurance in this state, the Department of Insurance shall be satisfied by such examination as it may cause to be made or such evidence as it may require that such company is duly qualified under the laws of this state to transact business in this state. The department shall examine a corporation which has received a permit from the department to complete its organization as an insurance company whenever it deems it necessary or prudent to protect shareholders, applicants for membership or for insurance, creditors, or the public.

The Department of Insurance shall require every domestic insurance company to keep its books, records, accounts and vouchers in such manner that it may readily verify its annual statement, and ascertain whether the company is solvent and has complied with the law.

The Department of Insurance shall notify the chairperson and members of the Banking, Commerce and Insurance Committee of the Legislature prior to submitting any request or application to the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services for a state innovation waiver under section 1332 of the federal Patient Protection and Affordable Care Act. Such notification shall be made electronically and shall include a copy of the application for the federal waiver. The Banking, Commerce and Insurance Committee of the Legislature shall hold a public hearing on such waiver application.

The Department of Insurance shall preserve in a permanent form a record of its proceedings, and the acts and proceedings of its officers, including a concise statement of the results of all investigations or examinations of insurance companies.

The Department of Insurance shall transmit to the Governor, ten days prior to the opening of each session of the Legislature, a report of its official transactions, containing in a condensed form the statements made to the department by every insurance company authorized to do business in this state pursuant to Chapter 44, as audited and corrected by it, arranged in tabular form or in abstracts, in classes according to the kind of insurance, which report shall also contain (1) a statement of all insurance companies authorized to do business in this state during the year ending December 31 next preceding, with their names, locations, amounts of capital, dates of incorporation, and of the commencement of business and kinds of insurance in which they are engaged respectively; and (2) a statement of the insurance companies whose business has been closed since making the last report, and the reasons for closing such businesses, with the amount of their assets and liabilities, so far as the amount of their assets and liabilities are known or can be ascertained by the department. The report shall also be transmitted electronically to the Clerk of the Legislature. Each member of the Legislature shall receive a copy of such report by making a request for it to the director. The department may transmit the report by electronic format through the portal established under section 84-1204 after notification of such type of delivery is given to the recipient. The department shall maintain the report in a form capable of accurate duplication on paper.

In addition to any other fees and charges provided by law, the following shall be due and payable to the Department of Insurance: (1) For filing the documents, papers, statements, and information required by law upon the organization of domestic or the entry of foreign or alien insurers, statistical agents, or advisory organizations, three hundred dollars; (2) for filing each amendment of articles of incorporation, twenty dollars; (3) for filing restated articles of incorporation, twenty dollars; (4) for renewing each certificate of authority of insurers, statistical agents, or advisory organizations, one hundred dollars, except domestic assessment associations, which shall pay twenty dollars; (5) for issuance of an amended certificate of authority, one hundred dollars; (6) for filing a certified copy of articles of merger involving a domestic or foreign insurance corporation holding a certificate of authority to transact insurance business in this state, fifty dollars; (7) for filing an annual statement, two hundred dollars; (8) for each certificate of valuation, deposit, or compliance or other certificate for whomsoever issued, five dollars; (9) for filing any report which may be required by the department from any unincorporated mutual association, no fee shall be due; (10) for copying official records or documents, fifty cents per page; and (11) for a preadmission review of documents required to be filed for the admission of a foreign insurer or for the organization and licensing of a domestic insurer other than an assessment association, a nonrefundable fee of one thousand dollars.

(1) All money collected by the Department of Insurance for examination of the affairs of domestic, foreign, or alien insurance companies and insurers as defined in and pursuant to the Insurers Examination Act or any other provision of Chapter 44 or for valuing the reserve liabilities of life insurance companies shall be remitted by the department to the State Treasurer for credit to the Department of Insurance Cash Fund, which fund is hereby created. Money in the Department of Insurance Cash Fund may be used for transfers to the General Fund at the direction of the Legislature. Any money in the Department of Insurance Cash Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(2) The State Treasurer shall transfer fourteen million dollars from the Department of Insurance Cash Fund to the General Fund on or before June 30, 2026, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services. The State Treasurer shall transfer eleven million dollars from the Department of Insurance Cash Fund to the General Fund on or before June 30, 2027, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services. The State Treasurer shall transfer eleven million dollars from the Department of Insurance Cash Fund to the General Fund on or before June 30, 2028, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services. The State Treasurer shall transfer eleven million dollars from the Department of Insurance Cash Fund to the General Fund on or before June 30, 2029, on such dates and in such amounts as directed by the budget administrator of the budget division of the Department of Administrative Services.

The Director of Administrative Services is, upon presentation of a voucher properly countersigned by the Director of Insurance, authorized to draw warrants against the Department of Insurance Cash Fund for the purpose of paying the salaries and expenses of the personnel of the actuarial and examining staff of the Department of Insurance.

In order to discharge the responsibilities of the department, including the requirements of the Insurers Examination Act, there shall be appointed a sufficient staff of actuaries and examiners which shall include:

(1) One or more life insurance actuaries;

(2) One or more property and casualty insurance actuaries;

(3) One or more actuarial examiners;

(4) A chief financial examiner and one or more assistant chief financial examiners;

(5) One or more financial examiners;

(6) A chief market conduct examiner; and

(7) One or more market conduct examiners.

The examiners described in subdivisions (3) through (5) of this section hired after March 4, 2003, shall hold office at the will of the director and shall receive such salary as fixed by the director and approved by the Governor based upon the level of credentials for the positions. Each employee who is employed as an examiner on March 4, 2003, may elect to become employed at will. The election to become employed at will may be made at any time upon notification to the director in writing, but once made, such election shall be final. Until the election to be employed at will is made, the employee shall be treated as continuing participation in the State Personnel System.

Whenever it appears to the Department of Insurance from any proper showing or from any examination made that the capital stock of any domestic stock insurance company is impaired or that its assets are insufficient to justify its continuance in business, the department, in lieu of proceeding immediately in the manner authorized by the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act, may at once determine the amount of such impairment or deficiency and thereupon issue a written notice to the company requiring its shareholders to make good the amount of the impairment or deficiency with cash or authorized investments or to reduce its capital stock, not below statutory requirements, within a reasonable time not to exceed ninety days from the service of the notice.

If the amount of any such impairment or deficiency shall not be made good within the time specified in such notice and proof thereof filed with the Department of Insurance, the company shall be proceeded against in the manner authorized and directed by the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act.

No reduction of stock shall be made except by approval of at least two-thirds of the directors. The directors, after such reduction of stock, may require such shareholder to surrender his or her stock and in lieu thereof may issue a new certificate for such number of shares as each shall be entitled to.

Whenever it shall appear from any proper showing, or from any examination made, that the assets and resources of any domestic mutual insurance company are insufficient to meet the minimum conditions prescribed in section 44-219 as now existing or hereafter amended, the Department of Insurance shall promptly determine the amount of such deficiency, and thereupon issue a written notice and requisition to the directors and officers of such company, requiring them to make good the amount of such deficiency within a reasonable time, not to exceed one hundred eighty days, from the service of such notice and requisition.

Such notice and requisition may be served by either registered or certified letter, having affixed the proper postage, and directed to the company at its principal place of business in this state. Upon the service of such notice and requisition, the directors and officers thereof shall forthwith cause such deficiency to be made good and proof thereof to be filed in the office of the Department of Insurance within the time specified in the notice and requisition. If such deficiency shall not be made good within the time specified in the notice and requisition and satisfactory proof thereof filed with the department, such company shall be proceeded against in the manner authorized and directed by the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act.

Whenever any of the grounds mentioned in section 44-4809, 44-4812, or 44-4817 are shown to exist as to a domestic company after a hearing upon notice to the company, the Department of Insurance may suspend or revoke the certificate of authority of such company to do business, instead of applying to the court, which order of suspension or revocation shall be subject to appeal, and the appeal shall be in accordance with the Administrative Procedure Act.

Whenever the authority of a foreign or alien company to do business is suspended or revoked by its state of domicile or state of entry into the United States or whenever any of the grounds mentioned in section 44-4809, 44-4812, or 44-4817 exist as to a foreign or alien company, the Department of Insurance may suspend or revoke the certificate of authority of such company to do business in this state, which order of suspension or revocation shall be subject to appeal, and the appeal shall be in accordance with the Administrative Procedure Act.

Any foreign or alien insurance company or association, before it shall do any business in this state, shall procure a certificate of authority to do business in this state as provided by the laws of the State of Nebraska. Procuring such a certificate shall constitute sufficient contact with this state for the exercise of personal jurisdiction over the company or association in any action arising out of its activities in this state.

The dissolution of any foreign insurance company or association shall not take away or impair the right of any person to commence an action in this state against such companies or associations, or their statutory successors as agents thereof, and procure service upon such companies or their statutory successors, as herein provided, for any liability previously incurred.

If any domestic insurance company or association, or domestic fraternal benefit society, having a certificate of authority from the Department of Insurance, shall make application for admission to any other state or country, and shall comply with all the statutory regulations of such state or country, and it shall be refused admission to such state or country, the director may revoke every certificate of authority granted to like companies or societies organized under the laws of the state or country so refusing admission to a domestic insurance company or association or domestic fraternal benefit society, unless and until such country or state shall grant the necessary license or certificate to such domestic insurance company or association or fraternal benefit society.

(1) When by or pursuant to the laws of any other state or foreign country any taxes, licenses and other fees, in the aggregate, or any fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions, are or would be imposed upon Nebraska insurers, or upon the agents or representatives of such insurers, which are in excess of such taxes, licenses and other fees, in the aggregate, or which are in excess of the fines, penalties, deposit requirements, or other obligations, prohibitions, or restrictions directly imposed upon similar insurers, or upon the agents or representatives of such insurers, of such other state or country under the statutes of this state, so long as such laws of such other state or country continue in force or are so applied, the same taxes, licenses and other fees, in the aggregate, or fines, penalties, deposit requirements, or other material obligations, prohibitions, or restrictions of whatever kind shall be imposed by the Director of Insurance upon the insurers, or upon the agents or representatives of such insurers, of such other state or country doing business or seeking to do business in Nebraska. Any tax, license or other fee, or other obligation imposed by any city, county, or other political subdivision or agency of such other state or country on Nebraska insurers or their agents or representatives shall be deemed to be imposed by such state or country within the meaning of this section.

(2) This section shall not apply as to personal income taxes, nor as to ad valorem taxes on real or personal property nor as to special-purpose obligations or assessments heretofore imposed by another state in connection with particular kinds of insurance, other than property insurance; except that deductions, from premium taxes or other taxes otherwise payable, allowed on account of real estate or personal property taxes paid shall be taken into consideration by the Director of Insurance in determining the propriety and extent of retaliatory action under this section.

(3) Nothing in this section shall require retaliatory action because of fees, obligations, or prohibitions imposed on Nebraska insurance producers licensed pursuant to the Insurance Producers Licensing Act.

(4) For the purposes of this section the domicile of an alien insurer, other than insurers formed under the laws of Canada, shall be that state designated by the insurer in writing filed with the Director of Insurance at time of admission to this state or within twelve months after September 28, 1959, whichever date is the later, and may be any one of the following states: (a) That in which the insurer was first authorized to transact insurance; (b) that in which is located the insurer's principal place of business in the United States; or (c) that in which is held the larger deposit of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States.

If the insurer makes no such designation its domicile shall be deemed to be that state in which is located its principal place of business in the United States.

In the case of an insurer formed under the laws of Canada or a province thereof, its domicile shall be deemed to be that province in which its head office is situated.

Whenever the laws of any other state, or the rules and regulations of the insurance department of any such state, shall require of insurance companies organized under the laws of this state the payment of loan, surrender or nonforfeiture values to policyholders of such companies with such other state or states, based upon a minimum rate of interest less than that used by such Nebraska company, or companies, in computing the amount of such loan, surrender or nonforfeiture values to be paid to its policyholders within this state, then, as a condition precedent to a company organized under the laws of such other state being permitted to conduct or continue to conduct business in this state, the Department of Insurance may require that such company shall compute the loan, surrender or nonforfeiture values to be paid to Nebraska policyholders by such company or companies of such other state on the basis of a minimum interest rate less than the interest rate used by such company or companies as a basis for such loan, surrender or nonforfeiture values in its home state, by an amount equal to the difference between the rate used by such Nebraska company or companies in computing such values to be paid to its policyholders in this state and the minimum rate required by such other state or states, to be used by such Nebraska company or companies in computing the amount of such values to be paid by it to its policyholders in such other state or states.

Whenever it appears to the Director of Insurance that permission to transact business within any state of the United States or within any foreign country is refused to a company organized under the laws of this state after a certificate of compliance has been issued to the company by the director and after such company has complied with all laws of such state or foreign country, then and in every such case the director may forthwith cancel the authority of every company organized under the laws of such state or foreign government licensed to do business in this state and may refuse a certificate of authority to every such company thereafter applying to him or her for authority to do business in this state until his or her certificate has been duly recognized by the government of such state or country.

(1) Unless otherwise expressly prohibited by Chapter 44, the director may:

(a) Share documents, materials, or other information, including otherwise confidential and privileged documents, materials, or information, with other state, federal, foreign, and international regulatory and law enforcement agencies, the International Association of Insurance Supervisors, the Bank for International Settlements, and the National Association of Insurance Commissioners and its affiliates and subsidiaries if the recipient agrees to maintain the confidential or privileged status of the document, material, or other information;

(b) Receive documents, materials, or other information, including otherwise confidential and privileged documents, materials, or information, from other state, federal, foreign, or international regulatory and law enforcement agencies, the International Association of Insurance Supervisors, the Bank for International Settlements, and the National Association of Insurance Commissioners and its affiliates and subsidiaries. The director shall maintain as confidential or privileged any document, material, or other information received pursuant to an information-sharing agreement entered into pursuant to this section with notice or the understanding that the document, material, or other information is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and

(c) Enter into agreements governing sharing and use of information consistent with this subsection.

(2)(a) All confidential and privileged information obtained by or disclosed to the director by other state, federal, foreign, or international regulatory and law enforcement agencies, the International Association of Insurance Supervisors, the Bank for International Settlements, or the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this section with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or other information shall:

(i) Be confidential and privileged;

(ii) Not be a public record subject to disclosure by the director pursuant to sections 84-712 to 84-712.09;

(iii) Not be subject to subpoena; and

(iv) Not be subject to discovery or admissible in evidence in any private civil action.

(b) Notwithstanding the provisions of subdivision (2)(a) of this section, the director may use the documents, materials, or other information in any regulatory or legal action brought by the director.

(3) The director, and any other person while acting under the authority of the director who has received information from other state, federal, foreign, or international regulatory and law enforcement agencies, the International Association of Insurance Supervisors, the Bank for International Settlements, or the National Association of Insurance Commissioners or its affiliates and subsidiaries pursuant to this section, may not, and shall not be required to, testify in any private civil action concerning such information.

(4) Nothing in this section shall constitute a waiver of any applicable privilege or claim of confidentiality in the documents, materials, or other information received from state, federal, foreign, or international regulatory and law enforcement agencies, the International Association of Insurance Supervisors, the Bank for International Settlements, or the National Association of Insurance Commissioners or its affiliates and subsidiaries pursuant to this section as a result of disclosure to the director or as a result of information sharing authorized by this section.

Whenever numerous copies of the same records or documents are furnished or certified to by the Department of Insurance, the Director of Insurance may reduce such fees for copies or certifications thereto if he deems the total fees to be excessive; and he may, when he deems it in the public interest, furnish without charge to the various state insurance regulatory authorities and persons other than insurers, copies, certified copies, or certifications of all records, documents, or information requested.

Commencing with any fee or charge imposed for 1985 or any subsequent year, whenever it appears to the satisfaction of the Director of Insurance that, because of a mistake of fact, error in calculation, or erroneous interpretation of a statute of this or any other state, district, province, territory, or country, any fee or charge, excluding taxes, has been paid to the director pursuant to any provision of law which is not required by law or which is in excess of the amount legally chargeable, he or she shall have the authority to refund the amount of such payment or overpayment. The refund may be made by applying such amount towards the payment of other like or similar fees or charges, except taxes, already due or which may become due until such payment or overpayment has been fully refunded. No amount shall be refunded for payment or overpayment made after two years have elapsed from the end of the year for which any fee or charge was payable. This section shall not authorize or permit refunding of any taxes.

All fees and charges required by Chapter 44 shall be paid in the manner and within the time prescribed by the Director of Insurance as approved by the Tax Commissioner. All such fees and charges, including fees and charges collected pursuant to the retaliatory statutes of such chapter, which are in excess of or in addition to the fees and charges collected pursuant to such chapter, shall be deposited by the State Treasurer to the account of and for the use of the Department of Insurance Cash Fund to be appropriated and expended for the supervision, control, and regulation of the business of insurance in Nebraska. If payment of any such fee or charge is not made within the time prescribed, as approved, the director shall report such failure or neglect to the Attorney General who shall institute an action in the name of the State of Nebraska for the purpose of recovering the money due. All fees and charges of any nature whatsoever which are paid to the Department of Insurance or to the Director of Insurance by virtue of his or her office shall be paid forthwith into the state treasury and deposited by the State Treasurer to the Department of Insurance Cash Fund.

Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a place in this state. If an insurer transfers its domicile to this state, any investment held by the insurer at the time of the transfer, which shall have been an authorized investment under the laws of the insurer's former state of domicile, shall be deemed an authorized investment under the Insurers Investment Act. The domestic insurer shall be entitled to like certificates and licenses to transact business in this state and shall be subject to the authority and jurisdiction of this state.

Any domestic insurer may, upon the approval of the Director of Insurance, transfer its domicile to any other state in which it is admitted to transact the business of insurance. Upon such a transfer, the domestic insurer shall cease to be a domestic insurer and shall be admitted to this state if qualified as a foreign insurer. The Director of Insurance shall approve any such proposed transfer unless he or she determines such transfer is not in the interest of the policyholders of this state.

The certificate of authority, agents' appointments, licenses, rates, and other items which the Director of Insurance allows, in his or her discretion, which are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its domicile to this or any other state by merger, consolidation, or any other lawful method, shall continue in full force and effect upon such transfer if such insurer remains duly qualified to transact the business of insurance in this state. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the director. Every transferring insurer shall file new policy forms with the director on or before the effective date of the transfer but may use existing policy forms with appropriate endorsements if allowed by and under such conditions as approved by the director. Every such transferring insurer shall file promptly and shall notify the director of the details of the proposed transfer and resulting amendments to corporate documents filed or required to be filed with the director.

The Director of Insurance may adopt and promulgate rules and regulations to carry out sections 44-161 to 44-163.

(1)(a) A financial conglomerate may submit to the jurisdiction of the Director of Insurance for supervision on a consolidated basis under this section. Supervision under this section shall be in addition to all statutory and regulatory requirements imposed on domestic insurers and shall be for the purpose of determining how the operations of the financial conglomerate impact insurance operations.

(b) For purposes of this section:

(i) Control has the same meaning as in section 44-2121; and

(ii) Financial conglomerate means either an insurance company domiciled in Nebraska or a person established under the laws of the United States, any state, or the District of Columbia which directly or indirectly controls an insurance company domiciled in Nebraska. Financial conglomerate includes the person applying for supervision under this section and all entities, whether insurance companies or otherwise, to the extent the entities are controlled by such person.

(2) The director may approve any application for supervision under this section that meets the requirements of this section and the rules and regulations adopted and promulgated under this section.

(3)(a) The director may adopt and promulgate rules and regulations for supervision of a financial conglomerate, including all persons controlled by a financial conglomerate, that will permit the director to assess at the level of the financial conglomerate the financial situation of the financial conglomerate, including solvency, risk concentration, and intra-group transactions.

(b) Such rules and regulations shall require the financial conglomerate to:

(i) Have in place sufficient capital adequacy policies at the level of the financial conglomerate;

(ii) Report to the director at least annually any significant risk concentration at the level of the financial conglomerate;

(iii) Report to the director at least annually all significant intra-group transactions of regulated entities within a financial conglomerate. Such reporting shall be in addition to all reports required under any other provision of Chapter 44; and

(iv) Have in place at the level of the financial conglomerate adequate risk management processes and internal control mechanisms, including sound administrative and accounting procedures.

(c) In adopting and promulgating the rules and regulations, the director:

(i) Shall consider the rules and regulations that may be adopted by a member state of the European Union, the European Union, or any other country for the supervision of financial conglomerates;

(ii) Shall require the filing of such information as the director may determine;

(iii) Shall include standards and processes for effective qualitative group assessment, quantitative group assessment including capital adequacy, affiliate transaction, and risk concentration assessment, risks and internal capital assessments, disclosure requirements, and investigation and enforcement powers;

(iv) Shall state that supervision of financial conglomerates concerns how the operations of the financial conglomerate impact the insurance operations;

(v) Shall adopt an application fee in an amount not to exceed the amount necessary to recover the cost of review and analysis of the application; and

(vi) May verify information received under this section.

(4)(a) If it appears to the director that a financial conglomerate that submits to the jurisdiction of the director under this section, or any director, officer, employee, or agent thereof, willfully violates this section or the rules and regulations adopted and promulgated under this section, the director may order the financial conglomerate to cease and desist immediately any such activity. After notice and hearing, the director may order the financial conglomerate to void any contracts between the financial conglomerate and any of its affiliates or among affiliates of the financial conglomerate and restore the status quo if such action is in the best interest of policyholders, creditors, or the public.

(b) If it appears to the director that any financial conglomerate that submits to the jurisdiction of the director under this section, or any director, officer, employee, or agent thereof, has committed or is about to commit a violation of this section or the rules and regulations adopted and promulgated under this section, the director may apply to the district court of Lancaster County for an order enjoining such financial conglomerate, director, officer, employee, or agent from violating or continuing to violate this section or the rules and regulations adopted and promulgated under this section and for such other equitable relief as the nature of the case and the interest of the financial conglomerate's policyholders, creditors, or the public may require.

(c)(i) Any financial conglomerate that fails, without just cause, to provide information which may be required under the rules and regulations adopted and promulgated under this section may be required by the director, after notice and hearing, to pay an administrative penalty of one hundred dollars for each day's delay not to exceed an aggregate penalty of ten thousand dollars. The director may reduce the penalty if the financial conglomerate demonstrates to the director that the imposition of the penalty would constitute a financial hardship to the financial conglomerate.

(ii) Any financial conglomerate that fails to notify the director of any action for which such notification may be required under the rules and regulations adopted and promulgated under this section may be required by the director, after notice and hearing, to pay an administrative penalty of not more than two thousand five hundred dollars per violation.

(iii) Any violation of this section or the rules and regulations adopted and promulgated under this section shall be an unfair trade practice under the Unfair Insurance Trade Practices Act in addition to any other remedies and penalties available under the laws of this state.

(d) Any director or officer of a financial conglomerate that submits to the jurisdiction of the director under this section who knowingly violates or assents to any officer or agent of the financial conglomerate to violate this section or the rules and regulations adopted and promulgated under this section may be required by the director, after notice and hearing, to pay in his or her individual capacity an administrative penalty of not more than five thousand dollars per violation. In determining the amount of the penalty, the director shall take into account the appropriateness of the penalty with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.

(e) After notice and hearing, the director may terminate the supervision of any financial conglomerate under this section if it ceases to qualify as a financial conglomerate under this section or the rules and regulations adopted and promulgated under this section.

(f) If it appears to the director that any person has committed a violation of this section or the rules and regulations adopted and promulgated under this section which so impairs the financial condition of a domestic insurer that submits to the jurisdiction of the director under this section as to threaten insolvency or make the further transaction of business by such financial conglomerate hazardous to its policyholders or the public, the director may proceed as provided in the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act to take possession of the property of such domestic insurer and to conduct the business thereof.

(g) If it appears to the director that any person that submits to the jurisdiction of the director under this section has committed a violation of this section or the rules and regulations adopted and promulgated under this section which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the director may, after giving notice and an opportunity to be heard, suspend, revoke, or refuse to renew such insurer's license or authority to do business in this state for such period as the director finds is required for the protection of policyholders or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law.

(h)(i) Any financial conglomerate that submits to the jurisdiction of the director under this section that willfully violates this section or the rules and regulations adopted and promulgated under this section shall be guilty of a Class IV felony.

(ii) Any director, officer, employee, or agent of a financial conglomerate that submits to the jurisdiction of the director under this section who willfully violates this section or the rules and regulations adopted and promulgated under this section or who willfully and knowingly subscribes to or makes or causes to be made any false statements, false reports, or false filings with the intent to deceive the director in the performance of his or her duties under this section or the rules and regulations adopted and promulgated under this section shall be guilty of a Class IV felony.

(iii) Any person aggrieved by any act, determination, order, or other action of the director pursuant to this section or the rules and regulations adopted and promulgated under this section may appeal. The appeal shall be in accordance with the Administrative Procedure Act.

(iv) Any person aggrieved by any failure of the director to act or make a determination required by this section or the rules and regulations adopted and promulgated under this section may petition the district court of Lancaster County for a writ in the nature of a mandamus or a peremptory mandamus directing the director to act or make such determination forthwith.

(i) The powers, remedies, procedures, and penalties governing financial conglomerates under this section shall be in addition to any other provisions provided by law.

(5)(a) The director may contract with such qualified persons as the director deems necessary to allow the director to perform any duties and responsibilities under this section.

(b) The reasonable expenses of supervision of a financial conglomerate under this section shall be fixed and determined by the director who shall collect the same from the supervised financial conglomerate. The financial conglomerate shall reimburse the amount upon presentation of a statement by the director. All money collected by the director for supervision of financial conglomerates pursuant to this section shall be remitted in accordance with section 44-116.

(c) All information, documents, and copies thereof obtained by or disclosed to the director pursuant to this section shall be held by the director in accordance with sections 44-154 and 44-2138.

An insurance corporation may be formed for the following purposes or may insure the following lines:

(1) LIFE INSURANCE. Insurance upon lives of persons, including endowments and annuities, and every insurance pertaining thereto and disability benefits, except that life insurance shall not include variable life insurance specified in subdivision (2) of this section and variable annuities specified in subdivision (3) of this section;

(2) VARIABLE LIFE INSURANCE. Insurance on the lives of individuals, the amount or duration of which varies according to the investment experience of any separate account or accounts established and maintained by the insurer as to such insurance;

(3) VARIABLE ANNUITIES. Insurance policies issued on an individual or group basis by which an insurer promises to pay a variable sum of money either in a lump sum or periodically for life or for some other specified period;

(4) SICKNESS AND ACCIDENT INSURANCE. Insurance against loss or expense resulting from the sickness of the insured, from bodily injury or death of the insured by accident, or both, and every insurance pertaining thereto;

(5) PROPERTY INSURANCE. Insurance against loss or damage, including consequential loss or damage, to real or personal property of every kind and any interest in such property from any and all hazards or causes, except that property insurance shall not include title insurance specified in subdivision (15) of this section and marine insurance specified in subdivision (18) of this section;

(6) CREDIT PROPERTY INSURANCE. Insurance against loss or damage to personal property used as collateral for securing a loan or to personal property purchased pursuant to a credit transaction, but only insofar as it applies to property sold to or pledged by individual consumers for personal use;

(7) GLASS INSURANCE. Insurance against loss or damage to glass, including its lettering, ornamentation, and fittings;

(8) BURGLARY AND THEFT INSURANCE. Insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation or wrongful conversion, disposal, or concealment or from any attempt at any of the foregoing;

(9) BOILER AND MACHINERY INSURANCE. Insurance against any liability and loss or damage to life, person, property, or interest resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus;

(10) LIABILITY INSURANCE. Insurance against legal liability for the death, injury, or disability of any person, for injury or damage to any person, or for damage to property, and the providing of medical, hospital, surgical, or disability benefits to injured persons and funeral and death benefits to dependents, beneficiaries, or personal representatives of persons killed, irrespective of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance, except that liability insurance shall not include workers' compensation and employers liability insurance specified in subdivision (11) of this section;

(11) WORKERS' COMPENSATION AND EMPLOYERS LIABILITY INSURANCE. Insurance against the legal liability of any employer for the death or disablement of or injury to an employee whether imposed by common law or statute or assumed by contract, except that workers' compensation and employers liability insurance shall not include liability insurance specified in subdivision (10) of this section;

(12) VEHICLE INSURANCE. Insurance against any loss or damage to any land vehicle, other than railroad rolling stock, or any draft animal, from any hazard or cause, and against any loss, liability, or expense resulting from or incidental to ownership, maintenance, or use of any such vehicle or animal, together with insurance against accidental injury to or death of any person, irrespective of legal liability of the insured, if such insurance is issued as an incidental part of insurance on the vehicle or draft animal;

(13) FIDELITY INSURANCE. Insurance guaranteeing the fidelity of persons holding positions of public or private trust;

(14) SURETY INSURANCE. Insurance guaranteeing the performance of contracts other than insurance policies or guaranteeing and executing all bonds, undertakings, and contracts of suretyship, except that surety insurance shall not include title insurance specified in subdivision (15) of this section and financial guaranty insurance specified in subdivision (19) of this section;

(15) TITLE INSURANCE. (a) Insurance guaranteeing or indemnifying owners of real property or others interested therein against loss or damage suffered by reason of (i) liens, encumbrances upon, defects in, or the unmarketability of title to such real property, or adverse claim to title in real property with reasonable examination of title guaranteeing, warranting, or otherwise insuring by a title insurer the correctness of searches relating to the title to real property and (ii) defects in the authorization, execution, or delivery of an encumbrance upon such real property, or any share, participation, or other interest in such encumbrance, guaranteeing, warranting, or otherwise insuring by a title insurer the validity and enforceability of evidences of indebtedness secured by an encumbrance upon or interest in such real property; or

(b) Insurance guaranteeing or indemnifying owners of personal property or secured parties or others interested therein against loss or damage pertaining to adverse claims to title, liens, encumbrances upon, or security interests in personal property or fixtures, including the existence or nonexistence of attachment, perfection, or priority of security interests in personal property or fixtures under the Uniform Commercial Code or other laws, rules, or regulations establishing procedures for the attachment, perfection, or priority of security interests in personal property or fixtures or the accuracy or completeness of the search or filing results obtained from public registries established for determining liens or security interests in personal property or fixtures or the existence or nonexistence of protected purchaser status under the Uniform Commercial Code;

(16) CREDIT INSURANCE. Insurance against loss or damage from the failure of persons indebted to or to become indebted to the insured to meet existing or contemplated liabilities, including agreements to purchase uncollectible debts, except that credit insurance shall not include mortgage guaranty insurance specified in subdivision (17) of this section and financial guaranty insurance specified in subdivision (19) of this section;

(17) MORTGAGE GUARANTY INSURANCE. Insurance against financial loss by lenders by reason of nonpayment of principal, interest, or other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate;

(18) MARINE INSURANCE. Insurance against loss or damage, including consequential loss or damage, to vessels, craft, aircraft, automobiles, and vehicles of every kind as well as goods, freights, cargoes, merchandise, effects, disbursements, profits, money, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry, and respondentia interests, and all kinds of property and interests therein in respect to, pertaining to, or in connection with any or all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas, or waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for shipment or while awaiting the same, or during any delays, storage, transshipment, or reshipment incidental thereto; including marine builders' risks and war risks; and against loss or damage to persons or property in connection with or appertaining to marine, inland marine, transit, or transportation insurance, including loss or damage to either, arising out of or in connection with the construction, repair, operation, maintenance, or use of the subject matter of such primary insurance, but not including life insurance or surety bonds; but, except as specified in this subdivision, marine insurance shall not include insurance against loss by reason of bodily injury to the person;

(19) FINANCIAL GUARANTY INSURANCE. (1) Insurance issued in the form of a surety bond, insurance policy, or, when issued by an insurer, an indemnity contract and any guaranty similar to the foregoing types, against financial loss to an insured claimant, obligee, or indemnitee as a result of any of the following events:

(a) Failure of any obligor on any debt instrument or other monetary obligation, including common or preferred stock guaranteed under a surety bond, insurance policy, or indemnity contract, to pay when due principal, interest, premium, dividend, or purchase price of or on such instrument or obligation, when such failure is the result of a financial default or insolvency, regardless of whether such obligation is incurred directly or as guarantor by or on behalf of another obligor that has also defaulted;

(b) Changes in the levels of interest rates, whether short or long term, or the differential in interest rates between various markets or products;

(c) Changes in the rate of exchange of currency;

(d) Inconvertibility of one currency into another for any reason or inability to withdraw funds held in a foreign country resulting from restrictions imposed by a governmental authority;

(e) Changes in the value of specific assets or commodities, financial or commodity indices, or price levels in general; or

(f) Other events which the Director of Insurance determines are substantially similar to any of the events described in subdivisions (a) through (e) of this subdivision.

(2) Financial guaranty insurance shall not include:

(a) Insurance of any loss resulting from any event described in subdivisions (19)(1)(a) through (e) of this section if the loss is payable only upon the occurrence of any of the following, as specified in a surety bond, insurance policy, or indemnity contract:

(i) A fortuitous physical event;

(ii) A failure of or deficiency in the operation of equipment; or

(iii) An inability to extract or recover a natural resource;

(b) Any individual or schedule public official bond;

(c) Any contract bond, including bid, payment, or maintenance bond, or a performance bond when the bond is guarantying the execution of any contract other than a contract of indebtedness or other monetary obligation;

(d) Any court bond required in connection with judicial, probate, bankruptcy, or equity proceedings, including waiver, probate, open estate, and life tenant bond;

(e) Any bond running to the federal, state, county, or municipal government or other political subdivision as a condition precedent to granting of a license to engage in a particular business or of a permit to exercise a particular privilege;

(f) Any loss security bond or utility payment indemnity bond running to a governmental unit, railroad, or charitable organization;

(g) Any lease, purchase, and sale or concessionaire surety bond;

(h) Credit unemployment insurance, meaning insurance on a debtor, in connection with a specific loan or other credit transaction, to provide payments to creditor in the event of unemployment of the debtor for the installments or other periodic payments becoming due while a debtor is unemployed;

(i) Credit insurance, meaning insurance indemnifying manufacturers, merchants, or educational institutions extending credit against loss or damage resulting from nonpayment of debts owed to them for goods or services provided in the normal course of their business;

(j) Guaranteed investment contracts issued by life insurance companies which provide that the life insurer itself will make specified payments in exchange for specific premiums or contributions;

(k) Funding agreements;

(l) Synthetic guaranteed investment contracts;

(m) Guaranteed interest contracts;

(n) Deposit administration contracts;

(o) Surety insurance as specified in subdivision (14) of this section and mortgage guaranty insurance as specified in subdivision (17) of this section;

(p) Indemnity contracts or similar guaranties to the extent that they are not otherwise limited or proscribed by Chapter 44 in which a life insurer:

(i) Guaranties its obligations or indebtedness or the obligations or indebtedness of a subsidiary of which it owns more than fifty percent, other than a financial guaranty insurance corporation, except that:

(A) To the extent that any such obligations or indebtedness are backed by specific assets, such assets shall at all times be owned by the insurer or the subsidiary; and

(B) In the case of the guaranty of the obligations or indebtedness of the subsidiary that is not backed by specific assets of the life insurer, such guaranty terminates once the subsidiary ceases to be a subsidiary; or

(ii) Guaranties obligations or indebtedness, including the obligation to substitute assets where appropriate, with respect to specific assets acquired by a life insurer in the course of normal investment activities and not for the purpose of resale with credit enhancement, or guaranties obligations or indebtedness acquired by its subsidiary if such assets have been:

(A) Acquired by a special purpose entity, the sole purpose of which is to acquire specific assets of the life insurer or the subsidiary and issue securities or participation certificates backed by such assets; or

(B) Sold to an independent third party; or

(iii) Guaranties obligations or indebtedness of an employee or agent of the life insurer; and

(q) Any other form of insurance covering risks which the director determines to be substantially similar to any of the risks described in subdivisions (a) through (p) of this subdivision; and

(20) MISCELLANEOUS INSURANCE. Insurance upon any risk, including but not limited to legal expense insurance and mechanical breakdown insurance, not included within subdivisions (1) through (19) of this section, and which is a proper subject for insurance, not prohibited by law or contrary to sound public policy, to be determined by the Department of Insurance.

Any insurance company which is, on August 25, 1989, the holder of a valid certificate of authority issued by the Department of Insurance in effect immediately prior to such date may, on and after such date, subject to compliance with Chapter 44 and the rules and regulations of the department, continue to transact any insurance business in this state authorized by such certificate of authority and shall thereafter be eligible to have such certificate of authority renewed pursuant to Chapter 44. The Director of Insurance shall determine what line or lines of insurance as specified in section 44-201 each renewed certificate of authority shall include. Any certificate of authority valid on August 25, 1989, shall expire on April 30, 1990, as provided in section 44-303.

(1) Companies may be formed upon the stock or mutual plan to transact any line or lines of insurance authorized by section 44-201, upon the assessment plan to transact any line or lines of insurance specified in subdivisions (4), (5), (7), and (18) of such section, or upon the fraternal plan to transact insurance as authorized in Chapter 44, article 10. An assessment association may, in addition to any line or lines of insurance described in subdivisions (4), (5), (7), and (18) of section 44-201, be authorized to transact any line or lines of insurance which a mutual company may transact when such association has accumulated and thereafter at all times maintains the same reserves, surplus, and contingency funds required to be maintained by a mutual company organized to transact the same line or lines of insurance.

(2) A domestic company may, notwithstanding limitations otherwise applicable and if it maintains books and records which account for such business, engage directly in any of the following businesses: (a) Rendering investment advice; (b) rendering services related to the functions involved in the operation of its insurance business, including, but not limited to, actuarial, loss prevention, marketing and sales, safety engineering, data processing, accounting, claims, appraisal, and collection services; (c) acting as trustee or fiduciary in the administration of pension, profit-sharing, and other benefit plans for employees and self-employed persons and individual retirement accounts or annuities, if, in the judgment of the company, such plans constitute qualified plans under the Internal Revenue Code; (d) acting as administrative agent for a governmental instrumentality which is performing an insurance function for a health or welfare program; and (e) any other business activity reasonably complementary or supplementary to its insurance business, either to the extent necessarily or properly incidental to the insurance business which the company is authorized to do in this state or to the extent approved by the Director of Insurance and subject to any limitations he or she may prescribe for the protection of the interests of the policyholders of the company taking into account the effect of such business on the company's existing insurance business and its surplus, the proposed allocation of the estimated cost of such business, and the risks inherent in such business as well as the relative advantages to the company and its policyholders of conducting such business directly instead of through a subsidiary.

An insurer holding a valid certificate of authority to transact insurance in this state immediately prior to August 25, 1989, may continue to be authorized to transact the same lines of insurance permitted by such certificate of authority by maintaining thereafter the same amount of paid-in capital stock, if a stock insurer, or the same amount of surplus, if a mutual insurer, as required by the laws of this state for such authority immediately prior to such date, except that if such insurer, on or after such date, is determined by the director to be maintaining an amount which complies with the requirements as to capital and surplus as provided in sections 44-214, 44-219, and 44-243, then such insurer shall continue to comply with such requirements. On and after such date the insurer shall not be granted authority to transact any other or additional line of insurance unless it then fully complies with the requirements as to capital and surplus as provided by sections 44-214, 44-219, and 44-243 with respect to insurers applying for original certificates of authority.

Except as provided in section 44-1984, a company may be formed or an existing company may be authorized to transact any one or more of the lines of insurance specified in section 44-201.

Five or more natural persons may act as incorporators of an insurance corporation. The articles of incorporation shall be signed by each incorporator and delivered to the Department of Insurance for approval or disapproval, and if approved and found by it to be in accordance with the laws of this state, the department shall so certify. When such articles are thus approved, they shall be filed in the office of the Secretary of State and a duplicate copy bearing the date of filing in the office of the Secretary of State shall be filed in the office of the department. Upon the filing and recording of the articles of incorporation in the office of the Secretary of State as provided in this section corporate existence shall commence.

(1) The articles of incorporation filed pursuant to section 44-205 shall state (a) the corporate name, which shall not so nearly resemble the name of an existing corporation as, in the opinion of the Director of Insurance, will mislead the public or cause confusion, (b) the place in Nebraska where the registered office and principal office will be located, (c) the purposes, which shall be restricted to the kind or kinds of insurance to be undertaken, such other kinds of business which it shall be empowered to undertake, and the powers necessary and incidental to carrying out such purposes, and (d) such other particulars as are required by the Nebraska Model Business Corporation Act and Chapter 44.

(2) The articles of incorporation may state such other particulars as are permitted by the Nebraska Model Business Corporation Act and Chapter 44, including provisions relating to the management of the business and regulation of the affairs of the corporation and defining, limiting, and regulating the powers of the corporation, its board of directors, and the shareholders of a stock corporation or the members of a mutual or assessment corporation.

Within the earlier of thirty days after receiving the certificate of authority to transact business or four months after filing its articles of incorporation, such corporation shall publish a notice in some legal newspaper, which notice shall contain the same information, as far as practicable, as that required under the Nebraska Model Business Corporation Act.

Insurance companies hereafter organizing under the laws of this state are required to have as their executive officers persons who are known to be capable of running the affairs of an insurance company. The requirements shall consist of good character and known business ability, the latter requirement including a practical knowledge of the executive duties of conducting an insurance business.

No domestic insurance company shall issue, cause, or allow to be issued any stock or stock subscriptions at any time upon which all expenses of distribution and sale, including promotion, commissions, and underwriting fees, exceed ten percent of the amount paid in money upon such stock or stock subscriptions. All persons incorporating a stock insurance company shall sign a statement before a notary public stating that no one person or group of persons shall receive directly or indirectly any money or securities whatsoever for promoting and organizing any such company in excess of that amount provided for in the insurance laws of this state pertaining to the promotion and organization of insurance companies, and such statement shall be filed in the office of the Department of Insurance.

(1) In addition to the statement required by section 44-208 of persons incorporating stock companies, the incorporators of all domestic stock, mutual, and assessment insurers shall file with the Department of Insurance (a) copies of the proposed bylaws, (b) forms of subscriptions for capital stock or forms of application for membership or for insurance, and (c) a bond payable to the Director of Insurance and his or her successors, as trustees, in the penal sum to be determined by the Director of Insurance and in no event to be less than ten thousand dollars, with corporate surety, and conditioned upon the faithful accounting to the corporation on completion of its organization and the receipt of its certificate of authority from the Department of Insurance, to the shareholders, applicants for membership or for policies, or creditors, or to the trustee, receiver, or assignee of the corporation, duly appointed in any court of competent jurisdiction in this state, in accordance with their respective rights in the event the organization of the corporation is not completed and a certificate of authority to do business is not procured.

(2) In addition to the requirements of subsection (1) of this section, the incorporators of stock insurers shall file an application to solicit subscriptions for stock which shall include (a) the correct names and addresses of the incorporators and promoters, (b) a detailed statement of the plan upon which the corporation will operate, (c) the names, the addresses, and a brief description of the business experience of the proposed executive officers, including supervisory and administrative personnel, (d) the par value of the stock, (e) the subscription price of the stock, (f) the amount to be expended for organization and promotion expenses, expressed in a percentage of the subscription price of the stock, (g) the proposed plan of soliciting subscriptions for stock, (h) the place and manner in which the proceeds from full and partial subscriptions for stock will be held pending the corporation's organization, (i) an outline of the manner in which the corporation proposes to maintain its books and records, including the records pertaining to the solicitation of subscriptions for stock, (j) duplicate copies of all advertising matter which is to be used in connection with the sale of stock, (k) duplicate copies of all contracts to be entered into with persons employed to solicit subscriptions, and (l) such other information as may be required by the Department of Insurance.

If the Director of Insurance approves the forms of subscriptions for capital stock or the forms of application for membership or for insurance, the corporate surety on the bond required by section 44-208.01, and, in the case of stock insurers, the application to solicit subscriptions for stock, he or she shall deliver to the promoter or incorporators a permit in the name of the corporation authorizing it to complete its organization. Upon receiving such permit, the corporation shall have authority to solicit subscriptions and payments for capital stock if a stock insurer and applications and premiums or advance assessments for insurance if other than a stock insurer and to exercise such powers, subject to the limitations imposed by the Nebraska Model Business Corporation Act and Chapter 44, as may be necessary and proper in completing its organization and qualifying for a license to transact the kind or kinds of insurance proposed in its articles of incorporation. No corporation shall issue policies or enter into contracts of insurance until it receives a certificate of authority permitting it to do so.

No person shall solicit subscriptions for the capital stock of, or applications for membership or for insurance in any corporation in the process of organization, unless he has entered into a written contract with the corporation and a certificate of his authority, signed by at least three incorporators, has been filed with the Department of Insurance.

Every subscription to the capital stock of a corporation in the process of organization shall contain a stipulation that no sum shall be used for promotion or organization expense in excess of a stated percent of the amount paid upon the subscription. Such sum shall in no event exceed the percentage permitted by law. All sums paid by subscribers shall be held or invested in the manner described in the corporation's application for approval to solicit subscriptions required by section 44-208.01, and no sums may be disbursed by the corporation except for commissions or other promotion or organization expenses until the corporation has procured a certificate of authority from the Department of Insurance. Every subscription for stock, and every application for membership or for insurance made prior to the date the corporation is authorized to write insurance, shall contain a stipulation that the consideration paid by the subscriber or applicant shall be returned to him without any deduction except for organization and promotion expenses actually incurred, in no event to exceed the maximum permitted by law, in case the corporation fails to complete its organization and procure its certificate of authority, or issue the policy applied for.

(1) If a corporation does not qualify for a certificate of authority within one year from the date it receives its permit to complete its organization or if an agent of the corporation employed to solicit subscriptions or applications has violated the insurance laws of the state, the Director of Insurance may revoke such permit and order the assets of the corporation to be distributed to the persons or legal entities entitled thereto or proceed against the corporation as an insolvent insurance company in the manner authorized and directed by the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act.

(2) If any corporation does not qualify to receive its certificate of authority within two years from the date it receives its permit to complete organization, the Director of Insurance shall order the assets of the corporation to be distributed to the persons or legal entities entitled thereto or proceed against the corporation as an insolvent insurance company in the manner authorized and directed by the act.

Until a certificate of authority is issued to a corporation to transact business on the stock plan and for three years thereafter, no shares of stock shall be issued by the corporation or sold or transferred by the promoters, incorporators, or other persons engaged in soliciting subscriptions or in organizing or promoting the corporation, without approval of the Department of Insurance, for an amount in excess of the original subscription price as stated in the application required by section 44-208.01. Except to the extent provided in this section, sales and transfers of shares of stock by the record owner or owners shall not be subject to sections 44-208.01 to 44-208.08.

The Director of Insurance shall have authority to adopt and promulgate rules and regulations to regulate all other matters in connection with the organization of domestic insurers for the purpose of protecting the public or preventing fraud.

Any person, firm, association, partnership, limited liability company, or corporation which solicits any subscriptions for stock or any application for membership or for a policy or sells any surplus note for any insurer in process of organization in violation of law shall be personally liable to any person from whom he or she may have solicited such subscription for stock or application or to whom he or she may have sold such surplus note in an amount equal to that paid by the purchaser or applicant. Suit to recover the same may be brought by such purchasers or applicants, jointly or severally, in any court of competent jurisdiction in this state.

Every domestic stock and mutual company and assessment association shall hold an annual meeting of its shareholders, if a stock company, or of its members, if a mutual company or an assessment association, on or before the 30th day of June in each and every calendar year, for the purpose of receiving the report of its officers and directors, to elect directors whose terms expire, and to transact such other business as may be lawful for it to do. Special meetings of the shareholders or members may be held as may be provided in the articles of incorporation or the bylaws and as otherwise provided by law. Each outstanding share of stock in a stock company and each member in a mutual company or assessment association shall be entitled to one vote on each matter submitted to a vote at an annual or special meeting of the shareholders or members, except as otherwise provided by law and except that any such stock company in its articles of incorporation may provide that the holders of preferred shares of stock shall have no right to vote and, in such event, such shares of stock shall not be entitled to vote. A shareholder or member may vote either in person or by proxy executed in writing by the shareholder or member or by his or her duly authorized attorney in fact appointing any director, officer, shareholder, or member for such purpose. In the case of a mutual company or an assessment association, such proxy may be incorporated into a member's application for insurance or policy. All such proxies shall be filed or on file with the stock or mutual company or assessment association at least five days prior to the day of the meeting, and they shall expire eleven months from their effective date, unless otherwise provided in such proxy, application, or policy. Nothing in this section shall be construed to prohibit or limit the right of a shareholder or member to vote in person or otherwise revoke any such proxy at any time prior to any exercise thereof. In the case of a mutual company or an assessment association, there shall be no quorum requirements for any meeting of members except as set forth in the articles of incorporation or the bylaws of such mutual company or assessment association.

The business and affairs of an insurance corporation shall be managed by the incorporators until the first meeting of shareholders or members and then and thereafter by a board of directors elected by the shareholders or members and as otherwise provided by law. The board of directors shall consist of not less than five persons, and one of them shall be a resident of the State of Nebraska. At least one-fifth of the directors of an insurance company, which is not subject to section 44-2135, shall be persons who are not officers or employees of such company. A person convicted of a felony may not be a director, and all directors shall be of good moral character and known professional, administrative, or business ability, such business ability to include a practical knowledge of insurance, finance, or investment. No person shall hold the office of director unless he or she is a policyholder, if the company is a mutual company or assessment association. Unless otherwise provided in the articles of incorporation, the board of directors shall make all bylaws. A director shall discharge his or her duties as a director in accordance with section 21-2,102.

The directors of every stock company and the board of directors or members of every mutual company or assessment association may elect such officers as are necessary to conduct the business of the company, including a president, secretary, and treasurer, and employ such other officers and employees as may be required to carry on the business of the company and may fix their terms of office or employment and their salaries and compensation, but such action shall not be in conflict with the provisions of law relating thereto.

No domestic insurance company shall pay any salary, compensation, or emolument to any salaried employee or to any officer, trustee, or director thereof in excess of a reasonable return for the services performed or to be performed by such person. The shareholders of stock companies and the members of other companies shall retain the power at any meeting to alter or discontinue any employment agreement. No such company shall make an agreement with any salaried employee or with any officer, trustee, or director whereby it agrees that, for any services to be rendered, he or she shall receive any salary, compensation, or emolument that will extend beyond a period of five years from the date of such agreement, but any such company may make a conditional or unconditional agreement with any such person whereby it agrees that, in consideration of a current salary, compensation, or emolument of any amount less than a reasonable return for the services performed or to be performed by such person, he or she shall at specified future time or times, without regard to the five-year limitation set out in this section, receive, either without further condition or subject to reasonable contingencies, additional deferred salary, compensation, or emolument of any amount adequate to make the total thereof received by such person a reasonable return for the services performed by such person. Salary, compensation, and emolument as used in this section shall not include payments made pursuant to a plan for retirement, disability, sickness, accident, or death benefits.

(1) Except as provided in section 44-202.01, no stock insurance company shall, on and after August 25, 1989, transact any line of insurance specified in section 44-201 in this state unless it maintains a capital stock, actually paid in cash or invested as provided by law, of at least one million dollars, nor shall it, on or after such date, transact the line or lines of insurance specified in subdivisions (1) and (2) of section 44-201 and in addition thereto one or more lines of insurance other than those specified in subdivisions (3) and (4) of such section in this state unless it maintains a capital stock, actually paid in cash or invested as provided by law, of at least two million dollars. No stock insurance company shall, on and after August 25, 1989, begin to transact any line of insurance as specified in section 44-201 unless it has a surplus of at least one million dollars, nor shall it, on and after such date, begin to transact the line or lines of insurance specified in subdivisions (1) and (2) of section 44-201 and in addition thereto one or more lines of insurance other than those specified in subdivisions (3) and (4) of such section in this state unless it has a surplus of at least two million dollars.

(2) The provisions of subsection (1) of this section shall be considered minimum requirements. Stock insurers holding a certificate of authority to transact business in this state shall also be subject to the requirements of the Insurers and Health Organizations Risk-Based Capital Act.

The articles of incorporation of a mutual company or an assessment association may limit the insurance to specified kinds or classes of property, lives, individuals, or liabilities within any subdivision of section 44-201 or the territory within which insurance shall be granted and shall provide the manner in which policyholders of a mutual company shall participate in the profits of the company.

Each person, corporation, association, partnership, or limited liability company owning a policy or policies of insurance issued by a mutual company or an assessment association shall be a member thereof and have one vote.

The liability of a member of a mutual company shall be limited to the premiums stated in the policy.

(1)(a) No domestic mutual insurance company shall begin to transact the business of insurance until (i) it has received not less than one hundred applications for insurance unless organized to write (A) workers' compensation and employers liability insurance, in which case it shall receive applications from at least twenty employers covering in the aggregate five hundred employees, or (B) the line or lines of insurance specified in subdivisions (13) and (14) of section 44-201, in which case no application shall be required, and in addition thereto (ii) it has received in cash one annual premium for each application for insurance.

(b) Except as provided in section 44-202.01, no mutual insurance company shall, on and after August 25, 1989, transact any line of insurance specified in section 44-201 in this state unless it has and maintains a minimum surplus, in cash or invested as provided by law, of at least one million dollars, nor shall it, on and after such date, transact the line or lines of insurance specified in subdivisions (1) and (2) of section 44-201 and in addition thereto one or more lines of insurance other than those specified in subdivisions (3) and (4) of such section in this state unless it has and maintains a minimum surplus, in cash or invested as provided by law, of at least two million dollars.

(2) The provisions of subsection (1) of this section shall be considered minimum requirements. Mutual insurers holding a certificate of authority to transact business in this state shall also be subject to the requirements of the Insurers and Health Organizations Risk-Based Capital Act.

In addition to the general power and authority to borrow money for its regular business purposes, any domestic insurance company may borrow money: (1) To defray the reasonable expenses of its organization; (2) to provide special contingency loss funds; (3) to provide additional surplus funds; (4) to make good any deficiency; and (5) to provide the amount of minimum surplus required by Chapter 44 and may issue its notes therefor, to be known as surplus notes, which shall fully recite the purpose for which the money was borrowed, if application has been made to the Department of Insurance and approval in writing is obtained from the Director of Insurance for the issuance of such surplus notes in a stated maximum amount. The amount thereof outstanding with the unpaid interest shall be stated in each annual report.

(1) Except as provided in this subsection, surplus notes issued prior to September 9, 1995, and the indebtedness which they represent shall not be a liability or claim against any of the assets of the company. The principal of such notes may be paid from time to time, either in full or in part, from available surplus funds of the company only when the amount of the surplus of the company over all liabilities is double that of the principal amount then being paid. The company shall have the right to make such repayments whenever it is able to do so, except that the company shall first receive the prior approval of the Director of Insurance for any such repayments. The director shall use the standards set forth in section 44-2136 relating to adequacy of surplus in determining whether or not to approve such repayments. The interest on such notes shall only be payable from the surplus and shall not exceed such sum as may be fixed. Upon a dissolution of the company, the principal and accrued and unpaid interest shall be payable from the surplus.

(2) Except as provided in this subsection, the principal of surplus notes issued on or after September 9, 1995, and the indebtedness which such notes represent shall not be a liability or claim against any of the assets of the company. The principal of and interest on such notes may be paid from time to time, either in full or in part, from available surplus funds of the company only when the amount of the surplus of the company over all liabilities is double that of the amount of principal and interest then being paid. The company shall have the right to make such payments whenever it is able to do so, except that the company shall first receive the prior approval of the Director of Insurance for any such payments. The director shall use the standards set forth in section 44-2136 relating to adequacy of surplus in determining whether or not to approve such payments. Upon a dissolution of the company, the principal and accrued and unpaid interest shall be payable from the surplus.

Except as otherwise provided by law, no insurance company shall expose itself to any loss on any one risk in an amount exceeding ten percent of its surplus to policyholders as reflected by the last annual statement of the company, except that domestic assessment associations organized for the primary purpose of writing insurance coverage on farm properties and which write such insurance in less than thirty-one counties in Nebraska shall not write any policy for an amount in excess of one-eighth of one percent of its insurance in force. The term loss shall mean the incremental decrease in surplus resulting from payment of a claim equal to the maximum liability of the insurer on any one risk. The term any one risk shall mean, in the case of property insurance, all properties insured by the same insurance company which are customarily considered by underwriters to be subject to loss or destruction from the same hazard or occurrence except hazards or occurrences of a catastrophic nature. The term surplus to policyholders shall mean the amount obtained by subtracting, from the admitted assets, actual liabilities, including any reserves which by law must be maintained. In the case of a stock company, surplus to policyholders shall also include the paid-up and outstanding capital stock. Any reinsurance taking effect simultaneously with the policy or bond shall be deducted in determining whether any one risk or policy exceeds the limitation of risk or policy prescribed in this section. This section shall not be applicable to workers' compensation or employers liability insurance or to any policy or type of coverage as to which the maximum possible loss to the insurance company is not ascertainable on issuance of the policy.

For the purpose of determining whether any one risk exceeds the limitation imposed by section 44-222, reinsurance shall be in a company acceptable to the Director of Insurance. If requested by the director, the original company writing the risk or policy shall file with the Director of Insurance evidence of such reinsurance listing the name of the reinsurer and such other information pertaining thereto as may be required by the director.

The Director of Insurance may, if he or she finds that any person or insurer has violated any of the provisions of sections 44-222 and 44-222.01, report the facts to the Attorney General for prosecution in accordance with the provisions of section 44-395. In lieu of the criminal prosecution provided herein or in addition thereto the Director of Insurance may suspend such insurer's authority to do business in Nebraska for such length of time as the director may prescribe. An appeal may be taken from the decision of the director, and the appeal shall be in accordance with the Administrative Procedure Act.

The original incorporators, until the election of directors, and thereafter the directors shall be jointly and severally liable for any losses incurred during the following time or times: (1) For the excess of any policy above the maximum single risks prescribed by section 44-222 during the time that such policy exceeds such maximum single risks; (2) for any losses occurring upon any new risk taken after the expiration of the period designated by the Department of Insurance in accordance with sections 44-120 to 44-124 in which to make good any deficiency; and (3) for all debts and liabilities contracted prior to the time the company received its certificate of authority.

For purposes of sections 44-224.01 to 44-224.10, unless the context otherwise requires:

(1) Director shall mean the Director of Insurance or his or her authorized representative;

(2) Policyholders shall mean the members of mutual insurance companies, the members of assessment associations, and the subscribers to reciprocal insurance exchanges;

(3) Merger or contract of merger shall mean a merger or consolidation agreement between stock insurance companies as authorized by the Nebraska Model Business Corporation Act;

(4) Consolidation or contract of consolidation shall mean a merger or consolidation agreement between companies operating on other than the stock plan of insurance; and

(5) Bulk reinsurance or contract of bulk reinsurance shall mean an agreement whereby one company cedes by an assumption reinsurance agreement fifty percent or more of its risks and business to another company.

(1) Any domestic insurance company may, in the course of its business, accept reinsurance or bulk reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact directly.

(2) Any domestic insurance company may, in the usual course of business, reinsure any of its risks.

(1) Any domestic stock insurance company may cede its business to another licensed insurer by a contract of bulk reinsurance, but such contract shall not become effective unless first filed with and approved by the director and thereafter approved by a majority vote of the shareholders of the ceding company present in person or by proxy and voting at an annual meeting or at a special meeting called for that purpose.

(2) The director shall approve such contract within a reasonable time after such filing unless he or she finds it is inequitable to the shareholders or policyholders of both insurers. If the director does not approve the contract, he or she shall so notify the respective insurers in writing specifying his or her reasons therefor. If approved by the director, the contract shall then be submitted to the shareholders of the ceding company for their approval as provided in subsection (1) of this section. If approved by the required vote of the shareholders, the contract shall then become effective.

Any domestic stock insurance company may merge with another stock insurer after the contract of merger is approved by the director. The director shall not approve any such contract of merger unless the interests of the policyholders or shareholders of both parties thereto are properly protected. If the director does not approve the contract of merger, he or she shall issue a written order of disapproval setting forth his or her findings. After having obtained the approval of the director, the contract of merger shall be consummated in the manner set forth in the Nebraska Model Business Corporation Act for the merger or consolidation of stock corporations.

(1) Any domestic insurance company operating on other than the stock plan may cede its business to another licensed insurer, whether stock, mutual, assessment, or reciprocal exchange, by a contract of bulk reinsurance upon compliance with this section.

(2) Such contract of bulk reinsurance shall not become effective unless first filed with and approved by the director and thereafter approved by a majority vote of the members of the ceding company present in person or by proxy and voting at an annual meeting or at a special meeting called for that purpose. The director shall not approve such contract unless he or she finds it to be fair and equitable to the policyholders of each insurer involved. If the director does not so approve, he or she shall notify each insurer involved in writing specifying his or her reasons therefor.

(3) Contracts of bulk reinsurance whereby an insurer operating on other than the stock plan of insurance cedes its business to a stock insurer shall provide for distribution to each policyholder of the ceding company of his or her equity in the surplus funds, if any, of such ceding company as determined under a fair and equitable formula approved by the director.

Any domestic assessment association, which has accumulated and maintains the same reserve for liabilities that is required of a mutual company transacting the same kind or kinds of business, and which has a surplus or contingency funds equal to, or in excess of the surplus required of a mutual company transacting the same kind or kinds of business, may in any contract of reinsurance or bulk reinsurance, agree to limit its assessments to the premium stated in the policies issued by the ceding company.

(1) A contract of consolidation involving a domestic insurance company shall be approved by a majority vote of the board of directors or other governing body of each of the respective parties thereto as well as by a majority vote of the members present in person or by proxy at an annual meeting or at a special meeting called for that purpose. Such contract of consolidation shall be approved by the director prior to submission to the members for approval. After approval by the members, the officers of the respective parties thereto may enter into and consummate such contract of consolidation and do and perform all acts necessary to the final and complete consummation thereof. Such contract of consolidation shall designate the corporation which is to continue or survive and which shall thereafter retain a certificate of authority issued by the department. The surviving company may assume, in whole or in part, the name of the retiring company. Such contract of consolidation upon becoming effective shall have the effect of transferring the assets, rights, franchises, and interests of the companies so consolidated to the continuing or surviving company, and simultaneously therewith, such surviving or continuing company shall be deemed to have assumed all the liabilities of the consolidated companies. A contract of consolidation need not require a disposition or other distribution of the surplus assets of either party thereto to their respective policyholders. No action or proceeding pending at the time of such consolidation to which either of the consolidating parties may be a party shall be abated or discontinued by reason of such consolidation, but the same may be prosecuted to final judgment in the same manner as if the consolidation had not taken place or the continuing or surviving company may be substituted in place of any such company so consolidated, as the case may be, by order of the court in which the action or proceeding is pending.

(2) Any assessment association which has accumulated and maintains the same reserve for liabilities that is required of a mutual company transacting the same kind or kinds of business and which has a surplus or contingency funds equal to or in excess of that required of a mutual company transacting the same kind or kinds of business may, in any consolidation agreement in which it is to continue or survive as an assessment association, agree to limit its assessments to the premium stated in the policies issued by the retiring company.

All special meetings of shareholders or members called pursuant to sections 44-224.03, 44-224.05, and 44-224.07 shall be called upon a printed notice which shall contain (1) the time, place, and purpose of the meeting, (2) a brief statement of the substance of the contract and, in the case of the type of a bulk reinsurance contract contemplated by subsection (3) of section 44-224.05, a brief statement of the plan for distributing or otherwise disposing of the surplus assets, if any, of the ceding company, and (3) a copy of the order of the director approving the contract. Such notice shall be mailed at least ten days prior to the date the special meeting is called and shall be directed to the shareholder or member at his or her last post office address appearing on the records of the company.

Any party aggrieved by any order of the director approving or disapproving any contract of merger, consolidation, or bulk reinsurance may appeal, and the appeal shall be in accordance with the Administrative Procedure Act.

Whenever any company operating on other than the stock plan reinsures all of its risk and business in bulk its charter shall be deemed forfeited to the State of Nebraska. Whenever any company enters into a contract of consolidation and thereby loses its separate identity, its charter shall be deemed forfeited to the State of Nebraska.

(1) In addition to any other reinsurance authority granted by Chapter 44, any domestic insurance company authorized to transact business in this state pursuant to Chapter 44, article 2, may accept reinsurance for any insurance transacted by any affiliate or affiliates of such company which such company is not authorized to transact directly. The term affiliate shall have the same meaning as that stated for such term in section 44-2121.

(2) Before an insurance company may transact a business of accepting reinsurance pursuant to this section, it shall obtain the approval of the Department of Insurance. No such approval shall be granted or continued in effect unless the company has and maintains a minimum surplus, in cash or invested as provided by law, of at least two million dollars and has and maintains admitted assets of at least ten million dollars. No such approval shall be granted or continued in effect if the Director of Insurance finds that such approval would not be in the best interests of the policyholders, shareholders, or public because of the competence, experience, or integrity of the management personnel of such business, the terms of reinsurance accepted in connection with such business, or the effect of the operation of such business on the other operations of the company.

(3) No insurance company shall accept reinsurance pursuant to the authority granted by this section on any one risk in an amount exceeding five percent of its surplus to policyholders as reflected by the last annual statement of the company. The term any one risk and the term surplus to policyholders shall have the same meaning as that stated for such terms in section 44-222.

(4) Nothing in this section shall be construed to require any insurance company otherwise authorized by law to transact the business of reinsurance to exercise the authority granted by this section.

(5) The Department of Insurance shall adopt and promulgate such reasonable rules and regulations as may be necessary or appropriate to carry out the provisions of this section in accordance with the provisions of the Administrative Procedure Act. Such rules and regulations may include rules and regulations pertaining to the form of application for transaction of business authorized by this section, the plan of operation of such business, the qualifications of personnel engaged in such business, and the accounting and reporting procedures applicable to such business.

Except as otherwise provided in the Insurers Demutualization Act, any domestic insurance company, association, or society, hereinafter called company, may amend its articles of incorporation from time to time without limitation so long as the articles as amended contain only such provisions as are authorized in original articles of incorporation under Chapter 44. Proposed amendments to the articles shall be made in the following manner:

(1) The board of directors of such company shall adopt, by a two-thirds vote of all of the directors thereof, the proposed amendments to the articles of incorporation;

(2) Prior to the meeting of the shareholders or members at which the proposed amendments are to be considered, the proposed amendments, with all matters relating thereto, shall be submitted to the Department of Insurance for examination. If satisfied that the interests of the policyholders of such company and all concerned are properly protected and that no reasonable objections exist to the proposed amendments to the articles, the department may approve the same or it may require change or modification prior to any approval, as it may deem best for the interest of those affected; and

(3) If the Department of Insurance requires any changes or modifications of the proposed amendments to the articles of incorporation, such amendments shall be in turn submitted to and be adopted by a two-thirds vote of all the directors of such company. The proposed amendments to the articles of incorporation as originally adopted or readopted, as the case may be, shall then be submitted to the shareholders or members of the company entitled to vote for adoption at a regular meeting or a special meeting thereof.

Except as hereinafter provided, notice of such a special meeting together with a description of the proposed amendment to the articles of incorporation shall be given to each shareholder or member entitled to vote in the manner authorized or approved by the department at least thirty days prior thereto.

If the proposed amendments to the articles of incorporation are to be considered at a regular annual meeting of the members or shareholders, the Director of Insurance may, in his or her discretion, require the giving of the same notice as is required for a special meeting.

If the proposed amendments to the articles of incorporation are to be considered at a special meeting of the members of a mutual or assessment company or at a regular annual meeting thereof, notice of which has been required, the Director of Insurance may, upon application of the board of directors of such company, permit the company to exclude from the members entitled to notice those who in the opinion of the director are not reasonably ascertainable.

If the proposed amendments to the articles of incorporation are adopted by a two-thirds vote of all the stock, if a stock company, by a vote of two-thirds of the members voting at such meeting in person or by proxy, if a mutual or assessment company, or pursuant to the Insurers Demutualization Act, then they shall be filed in the same offices as original articles of incorporation as provided in section 44-205, and the same notice shall be published.

If any domestic insurance company, operating upon a stock basis, hereafter desires to amend its articles of incorporation and change its methods of doing business to those of a mutual company, it shall, in addition to the requirements of section 44-231, comply with the provisions of sections 44-233 to 44-241.

The board of directors shall submit to the Director of Insurance:

(1) Two copies of the proposed amendments to its articles of incorporation as provided for in section 44-231, duly certified by the secretary of the company, for filing in the office of the director and as many additional copies thereof as there are shareholders of the company;

(2) Two copies of a comprehensive plan for the mutualization of the company as approved by the board of directors, duly certified by the secretary of the company, for filing in the office of the director and as many additional copies thereof or copies of an adequate summary of the plan as there are shareholders of the company; and

(3) A complete list of the shareholders of the company showing the name of, number of shares owned by, and the latest address of each shareholder as shown by the company's records.

The plan for the mutualization of the company shall among other things include:

(1) A statement of the value of the interest of the shareholders in the company as ascertained by the company, which value shall not exceed the fair value thereof, and the amount proposed to be paid to each shareholder upon retirement of his or her shares of stock;

(2) A statement of the method of ascertaining the value of the interest of the shareholders;

(3) A statement of the procedure proposed for paying the shareholders for their stock, which may be done over a period of time and performed with due regard for the interest of the policyholders, and for retiring and canceling the stock;

(4) A statement of the method to be followed in continuing the management of the company during any period intervening between the inception of the plan and the retirement of the stock and in instituting management by the policyholders; and

(5) A provision for approval of the plan for mutualization by at least two-thirds of the policyholders voting in person or by proxy at a meeting of policyholders called by the company upon at least thirty days' written notice mailed to the policyholders at their latest addresses as shown by the company's records and containing an adequate summary of the essential provisions of the plan.

Upon receipt of the documents described in section 44-234, the Director of Insurance shall promptly forward by mail to each shareholder of the company a copy of the proposed amendments to the articles of incorporation, a copy of the plan for mutualization or a summary thereof, and a written notice of hearing. The notice of hearing shall contain:

(1) A notification of the time, which shall be at least thirty days from the time of mailing the notice, and place for the hearing of objections to the plan for mutualization; and

(2) A statement that, upon the hearing and due consideration of the proposed plan and amendments to the articles of incorporation, the director may either disapprove the plan, approve the plan as submitted, including the value of the interest of the shareholders in the company as ascertained and stated in the plan, or approve the plan only subject to such modifications as he or she may propose, in which event it shall be returned to the company for approval by the board of directors, and that upon final approval in either event the plan shall, subject to approval by the owners of at least two-thirds of the stock of the company at a regular or special meeting called for the purpose, be placed in effect and the stock of the company retired and canceled and the value ascertained by the director paid to the shareholders all as provided in the plan.

The Director of Insurance shall hold the hearing on objections as provided by sections 44-233 to 44-241 and shall receive written objections to the plan and amendments from any policyholder or shareholder and any evidence offered in support thereof. He or she may employ such actuaries, appraisers, and other experts and make such examinations of the company and its books, records, and property as he or she deems necessary. The Director of Insurance shall cause a full and complete written record of the hearing to be made. Any interested party having objections to the plan or any part thereof shall fully state such objections in written form and file them with the director prior to the hearing. Upon the hearing any objector may offer such evidence as may be determined by the Director of Insurance to be relevant and proper. Upon appeal from the order of the director, the value of each shareholder's interest in the company and the amount to be paid therefor shall not be increased or decreased by reason of any change of circumstances occurring after the filing of such order.

If, upon the hearing, the Director of Insurance disapproves the plan, he or she shall enter a written order fully stating the reason therefor. If he or she approves the proposed plan and amendments, he or she shall (1) make and enter an appropriate order approving them, (2) make a finding that the provisions of the plan are in conformity with the requirements of sections 44-231 and 44-235, (3) make a specific finding as to the fair value of the shareholders' interest in the company as of the date of the order, (4) find the value of each shareholder's interest as represented by his or her shares therein and the amount to be paid therefor, and (5) order that, conditioned upon the approval and adoption of the plan and amendments to the articles of incorporation by the shareholders at a regular or special meeting duly called for the purpose as provided in section 44-231, (a) the plan shall be placed in effect, (b) all shareholders of the company shall surrender their stock for cancellation pursuant to the plan and receive payment therefor in accordance therewith, and (c) upon any shareholder's failing or neglecting to so surrender his or her stock, all of his or her rights, powers, and privileges as such shareholder shall nevertheless terminate and be extinguished, excepting only his or her right to receive payment for his or her stock. The order shall recite that appeal may be had and that the appeal shall be in accordance with the Administrative Procedure Act. A copy of the order, duly certified by the director, shall be promptly forwarded by mail to each of the shareholders of the company at his or her latest address as shown on the records of the company.

If the Director of Insurance proposes modifications in the proposed plan for mutualization or amendments to the articles of incorporation, he or she shall make such proposals in the form of a written order approving the plan only upon the condition that such modifications be promptly made thereto and approved by a two-thirds vote of the board of directors and adopted by the owners of at least two-thirds of the stock of the company. The order shall in all other respects follow the form and contain the provisions of an order approving such plan as set out in section 44-238 and shall be similarly forwarded to the shareholders of the company.

Any plan for mutualization approved by the Director of Insurance shall be submitted to the policyholders of the company at a meeting held pursuant to the plan and shall be adopted only upon the affirmative vote of two-thirds of the policyholders present and voting in person or by proxy at the meeting as provided in the plan. The plan and amendments to the articles of incorporation shall also be submitted to the shareholders of the company as provided in section 44-231, and upon affirmative vote of at least two-thirds of the shareholders, the plan shall be placed in full effect and operation and the amendments to the articles shall be deemed adopted to become fully effective upon filing at the time specified in the plan and as provided for in section 44-205, and upon such filing being made, the company shall forthwith become and be a mutual insurance company for all purposes. The company shall publish notice of the amendments to its articles of incorporation as provided in section 44-206.

All reasonable expenses incurred by the Department of Insurance shall be certified to by the director and paid by the company.

For purposes of sections 44-242 to 44-247, unless the context otherwise requires:

(1) An all-lines insurer shall mean an insurer authorized to write more than one line of insurance included in a life insurance class of insurance and one or more lines of insurance included in a property and liability class of insurance;

(2) Life insurance class of insurance shall mean the lines of insurance specified in subdivisions (1) through (4) of section 44-201; and

(3) Property and liability class of insurance shall mean the lines of insurance specified in subdivisions (4) through (14) and (16) through (20) of section 44-201, except that, with respect to any particular all-lines insurer, the line of insurance specified in subdivision (4) of section 44-201 may be included in either the life insurance class of insurance or property and liability class of insurance but shall not be included in both classes or, without the approval of the department, transferred from one class to another.

Except as provided in section 44-202.01, an all-lines insurer shall maintain a minimum surplus to policyholders, as defined in section 44-222, of at least two million dollars in the form of capital, if a stock insurance company, or in the form of surplus, if a mutual insurance company, in accordance with sections 44-214 and 44-219, respectively. Such an insurer shall not be subject to section 44-245 so long as its surplus to policyholders exceeds such minimum. Whenever the surplus to policyholders of such an insurer falls below such minimum, it shall be deemed to be an impaired insurer and shall automatically be subject to section 44-245.

Each line of insurance written by an all-lines insurer which is included in the life insurance class of insurance or the property and liability class of insurance shall be accounted for separately in life and accident and health annual statement blanks and fire and casualty annual statement blanks, respectively. Nothing in this section shall prohibit the writing of combination policy forms by an all-lines insurer combining any line or lines of insurance included in the life insurance class of insurance with any line or lines of insurance included in the property and liability class of insurance, but the allocable and separately stated premiums for each line of insurance shall be accounted for separately according to its classification.

In the event of impairment or insolvency of an all-lines insurer, the excess of the liabilities of one class of insurance over the accumulated assets attributable to that class of insurance may be charged as necessary against the assets of the other class only to the extent that assets attributable to such other class exceed the amount of reserves and other liabilities of such other class.

All requirements, limitations, and restrictions of Chapter 44 which apply to specific lines of insurance or to companies identified by the specific lines of insurance transacted by them shall apply to such companies and to all persons or agents thereof with respect to such specific line of insurance only to the extent transacted or conducted by such companies notwithstanding the fact that companies authorized under this section are formed or authorized to transact lines of insurance included in both the life insurance and property and casualty classes of insurance. If any provisions of sections 44-242 to 44-247 conflict with any other provisions of Chapter 44, the provisions of sections 44-242 to 44-247 shall prevail.

The department shall adopt and promulgate rules and regulations necessary to carry out sections 44-242 to 44-247.

Sections 44-248 to 44-255 shall be known and may be cited as the Insurance Company Plan of Exchange Act.

Any domestic stock insurance company may adopt a plan providing for the exchange of its outstanding shares for the consideration designated in this section to be paid or provided by a corporation which is to acquire such shares in the manner provided in sections 44-248 to 44-255.

The plan of exchange may provide that the acquiring corporation, as consideration for the stock of the domestic corporation, (1) transfer shares of its stock, (2) transfer other securities issued by it, (3) pay cash therefor, (4) pay or provide other consideration, or (5) pay or provide any combination of the foregoing types of consideration.

Acquiring corporation, as used in sections 44-248 to 44-255, shall mean any corporation incorporated under the laws of the State of Nebraska, any foreign or alien corporation domesticated or qualified to do business in Nebraska, or any foreign or alien insurance company authorized to do business in Nebraska.

The board of directors of each corporation which is a party to a plan of exchange shall by resolution upon a vote of two-thirds of all of its directors approve a plan of exchange setting forth:

(1) The names of the companies proposing to adopt a plan of exchange, and the names of the states or countries under which each of the companies is incorporated or organized;

(2) The terms and conditions of the proposed plan of exchange, and the mode of carrying the same into effect;

(3) The manner and basis of exchanging the shares of stock of the acquired company or other consideration involved in the plan of exchange; and

(4) Such other provisions with respect to the plan of exchange as are deemed necessary or advisable.

(1) Such plan of exchange shall then be submitted to the Director of Insurance for his or her approval after a hearing at which the shareholders of the company to be acquired shall have an opportunity to be heard upon at least ten days' notice to be given by the company to its shareholders of record at the time of mailing such notice. The director shall approve such plan within twenty days after such hearing unless he or she finds that the terms and conditions thereof for the issuance and exchange of securities or other consideration are unfair to the shareholders of the company to be acquired or if he or she finds that any of the conditions set forth in subsection (1) of section 44-2127 exist.

(2) After having obtained the approval of the Director of Insurance, the plan of exchange shall be submitted to a vote at a meeting of the shareholders of the company to be acquired. Such meeting may be either an annual or a special meeting. Notice shall be given not less than twenty days before such meeting to each shareholder of record as of the time of mailing such notice. Such notice shall be deemed to be delivered when deposited in the United States mail with postage prepaid, addressed to the shareholder at his or her address as it appears on the records of the company. A copy or summary of the plan of exchange shall be included in or enclosed with such notice. Each outstanding share of such company shall be entitled to vote on the proposed plan, whether or not such share has voting rights under the provisions of the articles of incorporation of such company. The affirmative vote of two-thirds of all of the outstanding shares, in person or by proxy, shall be necessary for the approval of any such plan by such shareholders.

Upon such approval of the plan by the shareholders, it shall be executed by the company acquired by its president or vice president and by its secretary or an assistant secretary and shall become effective without other action upon the filing thereof with the Director of Insurance along with a certification as to the number of shares outstanding entitled to vote and the number of shares voted for and against such plan respectively. At any time prior to the filing of the same with the director with such certification, the plan of exchange may be abandoned pursuant to the provisions therefor, if any, set forth in the plan.

Any shareholder of the company acquired may elect to exercise a right of dissent by filing with the company, prior to or at the meeting of shareholders at which such proposed plan is submitted to a vote, written objections to such proposed plan. If such proposed plan be approved by the required vote and such shareholder shall not have voted in favor thereof, such shareholder may, within ten days after the date on which the vote was taken, make written demand on the company for payment of the fair value of such shareholder's shares, and, if such proposed plan is effected, such company shall pay to such shareholder, upon surrender of the certificate or certificates representing such shares, the fair value thereof as of the day prior to the date on which the vote was taken approving the proposed plan, excluding any appreciation or depreciation in anticipation of such corporate action. Any shareholder failing to make demand within the ten-day period shall be bound by the terms of the proposed plan. If the proposed plan shall be abandoned or rescinded or the shareholder shall revoke the authority to effect such action, then the right of such shareholder to be paid the fair value of his shares shall cease.

Within twenty days after such plan is effected, the company so acquired shall give written notice thereof to each dissenting shareholder who has made demand as provided in this section, and shall make a written offer to each such shareholder to pay for his shares at a specified price deemed by such company to be the fair value thereof.

If within thirty days after the date on which such plan was effected the fair value of such shares is agreed upon between any such dissenting shareholder and the company, payment therefor shall be made within ninety days after the date on which such plan was effected, upon surrender of the certificate or certificates representing such shares. Upon payment of the agreed value, the dissenting shareholder shall cease to have any interest in such shares.

If within such period of thirty days the dissenting shareholder and the company do not agree, then the dissenting shareholder may, within sixty days after the expiration of the thirty-day period, file a petition in any court of competent jurisdiction in the county in which the registered office of the company is situated asking for a finding and determination of the fair value of such shares, and shall be entitled to a judgment against the company for the amount of such fair value as of the day prior to the date on which such vote was taken approving such plan, together with interest thereon at the rate of five percent per year to the date of such judgment. The action shall be prosecuted as an equitable action and the practice and procedure shall conform to the practice and procedure in equity cases. The judgment shall be payable only upon and simultaneously with the surrender to the company of the certificate or certificates representing such shares.

Upon payment of the judgment, the dissenting shareholder shall cease to have any interest in such shares. Unless the dissenting shareholder shall file such petition within the time limited by the provisions of this section, such shareholder and all persons claiming under him shall be conclusively presumed to have approved and ratified the plan and shall be bound by the terms thereof.

Shares acquired by the company pursuant to payment of the agreed value therefor or payment of the judgment entered therefor, as provided in this section, shall stand canceled unless otherwise provided for in the plan of exchange.

(1) Upon a plan of exchange becoming effective, the exchange provided for therein shall be considered to have been consummated and each shareholder of the stock insurance company acquired shall cease to be a shareholder of such company. The ownership of all shares of the issued and outstanding stock of such company shall vest in the acquiring corporation automatically without any physical transfer or deposit of certificates representing such shares. The acquiring corporation thereupon shall become the sole shareholder of such stock insurance company and have all of the rights, privileges, immunities and powers and, except as otherwise provided in sections 44-248 to 44-255, be subject to all the duties and liabilities to the extent provided by law of a shareholder of an insurance company organized under the laws of this state.

(2) Certificates representing shares of a domestic insurance company to be acquired prior to the plan of exchange becoming effective shall, after the plan of exchange becomes effective, represent (a) shares of the issued and outstanding capital stock or other securities issued by the acquiring corporation and (b) the right, if any, to receive cash or other consideration upon such terms as are specified in the plan of exchange. The plan of exchange may specify that all such certificates shall after the plan of exchange becomes effective represent only the right to receive shares of stock or other securities issued by the acquiring corporation, or cash or other consideration or any combination thereof, upon such terms as are specified in the plan of exchange.

The stock company acquired under a plan of exchange and the acquiring corporation shall be in all respects separate and distinct corporations, with neither corporation having any liability to the creditors or policyholders, if any, or shareholders of the other for any acts or omissions of the officers, directors, or shareholders of either or both of such corporations.

The Nebraska Model Business Corporation Act, except as otherwise provided in Chapter 44, shall apply to all domestic incorporated insurance companies so far as the act is applicable or pertinent to and not in conflict with other provisions of the law relating to such companies. An assessment association that has accumulated and continues to maintain (1) reserves and (2) surplus or contingency funds at least equal to those required of a mutual insurance company shall, unless otherwise provided by law, be deemed to have all the powers and privileges in transacting its business and managing its affairs as those possessed by a mutual insurance company qualified to transact the same line or lines of insurance as the assessment association.

All domestic insurance companies, and all insurance agents, solicitors, brokers, surveyors or adjusters doing business in this state, and all insurance business transacted in whole or in part within or outside this state, the subject and matter of which is located wholly or in part in this state, shall be subject to and be governed by this chapter, and the records of such insurance company, agent, solicitor, broker, surveyor or adjuster doing business in this state shall be subject to inspection and examination of the Department of Insurance.

No insurance company shall transact any insurance business in this state unless it has received a certificate of authority from the Department of Insurance to do so. This certificate shall expire on the last day of April in each year and shall be renewed annually if the company has continued to comply with the laws of this state and the rules and regulations of the department. Authority to do an insurance business shall be refused any company which contracts to pay or does pay any part of the premiums arising from insurance it has written or may write as compensation, directly or indirectly, for promoting or organizing the company.

Every insurance company before transacting the business of insurance in this state shall file in the office of the Department of Insurance a legally authenticated copy of its charter, articles of incorporation or record of its organization, and bylaws as follows: (1) If a domestic company, a copy of its articles of incorporation together with any amendments made therein; and (2) if a foreign or alien company, a copy of its articles of incorporation or charter and bylaws, including all amendments made therein, with a certificate duly executed by the officer having the custody of such articles or charter, under his or her seal of office, that such company is duly authorized under the laws of such state or country to do business therein, and a certificate showing the amount of issued and outstanding capital stock and assets as required by section 44-305. Such company shall furnish such other information and copies of all other papers which the department may require.

No foreign or alien insurance company shall be permitted to transact any business of insurance in this state: (1) If a stock company, unless it possesses, in its own exclusive name and right, paid-up, unimpaired capital stock and surplus equal to the minimum amount required by section 44-214 to entitle any domestic stock insurance company to transact a like kind or kinds of business; and (2) if a mutual company, unless it owns, has, and possesses, in its own exclusive name and right, surplus unimpaired of the kind and equal to the minimum amount required by section 44-219 to entitle any domestic mutual insurance company to transact a like kind or kinds of business. No part of such minimum capital or surplus shall consist of the capital stock of its own or any other insurance company. No alien insurance company shall be authorized to transact any business of insurance in this state unless it shall have deposited with the insurance department of some one state in the United States not less than two hundred thousand dollars in approved securities for the benefit of all its policyholders in the United States.

No domestic insurance company shall transact any business other than that specified in its articles of incorporation or otherwise authorized by law, and no foreign or alien company admitted to transact business in this state shall transact any other kind of business than that which it has been authorized by the laws of the state or country of its incorporation to do.

No life insurance company or association, other than fraternal benefit society, which issues contracts, the performance of which is contingent upon the payment of assessments or calls made upon its members, shall be hereafter organized to do business within this state. All such companies or associations as are now licensed to do business within the state on such plans may continue and carry on the business of insurance on the plan under which they are organized and doing business July 17, 1913, without being required to value their assessment policies or certificates of membership as yearly renewal term contracts.

An exclusion in a homeowner's or owner's, landlord's, and tenant's policy of insurance for loss arising out of the discharge, dispersal, release, or escape of pollutants shall include an exception to the exclusion for bodily injury sustained within a building and caused by smoke, fumes, vapor, or soot produced by or originating from a heating system or ventilation system. This section applies to policies issued or delivered in this state on or after January 1, 2015.

In the event of the death of the insured of an individual sickness and accident or medicare supplement policy, the insurer, upon receipt of a request for a pro rata refund by a party legally entitled to claim such a refund, shall refund the unearned premium prorated to the month of the insured's death if the request has been made within one year after the insured's death. The refund of the premium and termination of the coverage shall be without prejudice to any claim originating prior to the date of the insured's death.

(1) A health care sharing ministry shall not be considered to be engaging in the business of insurance for purposes of the insurance laws of this state.

(2) For purposes of this section, health care sharing ministry means a faith-based, nonprofit organization that is tax-exempt under the Internal Revenue Code which:

(a) Limits its participants to those who are of a similar faith;

(b) Acts as a facilitator among participants who have financial or medical needs and matches those participants with other participants with the present ability to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;

(c) Provides for the financial or medical needs of a participant through contributions from one participant to another;

(d) Provides amounts that participants may contribute with no assumption of risk or promise to pay among the participants and no assumption of risk or promise to pay by the health care sharing ministry to the participants;

(e) Provides a written monthly statement to all participants that lists the total dollar amount of qualified needs submitted to the health care sharing ministry, as well as the amount actually published or assigned to participants for their contribution;

(f) Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance:

IMPORTANT NOTICE. This organization is not an insurance company, and its product should never be considered insurance. If you join this organization instead of purchasing health insurance, you will be considered uninsured. By the terms of this agreement, whether anyone chooses to assist you with your medical bills as a participant of this organization will be totally voluntary, and neither the organization nor any participant can be compelled by law to contribute toward your medical bills. Regardless of whether you receive payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills. This organization is not regulated by the Nebraska Department of Insurance. You should review this organization's guidelines carefully to be sure you understand any limitations that may affect your personal medical and financial needs;

(g) Has participants which retain participation even after they develop a medical condition; and

(h) Conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request.

(1) For purposes of this section:

(a)(i) Telehealth means the use of medical information electronically exchanged from one site to another, whether synchronously or asynchronously, to aid a health care provider in the diagnosis or treatment of a patient.

(ii) Telehealth includes (A) services originating from a patient's home or any other location where such patient is located, (B) asynchronous services involving the acquisition and storage of medical information at one site that is then forwarded to or retrieved by a health care provider at another site for medical evaluation, and (C) telemonitoring.

(iii) Telehealth also includes audio-only services for the delivery of individual behavioral health services for an established patient, when appropriate, or crisis management and intervention for an established patient as allowed by federal law; and

(b) Telemonitoring means the remote monitoring of a patient's vital signs, biometric data, or subjective data by a monitoring device which transmits such data electronically to a health care provider for analysis and storage.

(2) Any insurer offering (a) any individual or group sickness and accident insurance policy, certificate, or subscriber contract delivered, issued for delivery, or renewed in this state, (b) any hospital, medical, or surgical expense-incurred policy, except for policies that provide coverage for a specified disease or other limited-benefit coverage, or (c) any self-funded employee benefit plan to the extent not preempted by federal law, shall provide upon request to a policyholder, certificate holder, or health care provider a description of the telehealth and telemonitoring services covered under the relevant policy, certificate, contract, or plan.

(3) The description shall include:

(a) A description of services included in telehealth and telemonitoring coverage, including, but not limited to, any coverage for transmission costs;

(b) Exclusions or limitations for telehealth and telemonitoring coverage, including, but not limited to, any limitation on coverage for transmission costs; and

(c) Requirements for the licensing status of health care providers providing telehealth and telemonitoring services.

(4) Except as otherwise provided in section 44-793, the reimbursement rate for any telehealth service shall, at a minimum, be the same as a comparable in-person health care service if the licensed provider providing the telehealth service also provides in-person health care services at a physical location in Nebraska or is employed by or holds medical staff privileges at a licensed facility in Nebraska and such facility provides in-person health care services in Nebraska.

(1) For purposes of this section:

(a) Insurer means any insurer offering any individual or group sickness and accident insurance policy or subscriber contract delivered, issued for delivery, or renewed in this state and any hospital, medical, or surgical expense-incurred policy, except for policies that provide coverage for a specified disease or other limited-benefit coverage, and any self-funded employee benefit plan to the extent not preempted by federal law; and

(b) Pharmacist professional services means professional services provided to patients by licensed pharmacists as allowed by law.

(2) On and after January 1, 2016, an insurer may contract with a licensed pharmacist for pharmacist professional services. Nothing in this section shall prohibit an insurer from contracting with a licensed pharmacist who is not employed or associated with a pharmacy. Nothing in this section shall require a licensed pharmacist to contract with an insurer for pharmacist professional services.

(1) Except as provided in subsection (2) of this section, an employer providing for an individual or family health insurance policy for a first responder employee shall not cancel such policy if the first responder suffers serious bodily injury from an event that occurs while the first responder is acting in the line of duty and that results in the first responder falling below the minimum number of working hours needed to maintain his or her regular individual or family health insurance.

(2) Subsection (1) of this section does not prohibit an employer from canceling such policy if the first responder:

(a) Voluntarily ceases to be employed with the employer; or

(b) Does not return to employment within twelve months after the date of injury.

(3) For a first responder who dies as a result of an event that occurs while the first responder is acting in the line of duty, the employer of such first responder shall not cancel any health insurance policy covering a spouse or dependent of such first responder for a period of at least twelve months following such death.

(4) For purposes of this section:

(a) Employer means any state or local governmental entity that employs a first responder;

(b) First responder means any law enforcement officer, professional firefighter, or paid individual licensed under a licensure classification in subdivision (1) of section 38-1217 who provides medical care in order to prevent loss of life or aggravation of physiological or psychological illness or injury;

(c) Law enforcement officer has the same meaning as in section 81-1401;

(d) Line of duty means any action that a first responder is authorized or obligated by law, rule, or regulation to perform, related to or as a condition of employment or service; and

(e) Professional firefighter means an individual who is a firefighter or firefighter-paramedic as a full-time career and who is a member of a paid fire department of any of the following entities within Nebraska:

(i) A municipality, including a municipality having a home rule charter or a municipal authority created pursuant to a home rule charter that has its own paid fire department;

(ii) A rural or suburban fire protection district; or

(iii) A fire service providing fire protection to state military installations.

(1) For purposes of this section:

(a) Delivered by electronic means includes:

(i) Delivery to an electronic mail address at which a party has consented to receive notices or documents; or

(ii) Posting on an electronic network or site accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting which shall be provided by electronic mail to the address at which the party has consented to receive notices or documents or by any other delivery method that has been consented to by the party; and

(b) Party means any recipient of any notice or document required as part of a first-party insurance transaction, including, but not limited to, an applicant, an insured, or a policyholder.

(2) Subject to the requirements of this section, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means so long as it meets the requirements of the Uniform Electronic Transactions Act.

(3) Delivery of a notice or document in accordance with this section shall be considered equivalent to any delivery method required under applicable law, including delivery by first-class mail, registered mail, certified mail, certificate of mailing, or a commercial mail delivery service. In any instance in which proof of receipt is required for a mailing, the electronic delivery method used must provide for verification or acknowledgment of receipt.

(4) A notice or document may be delivered by electronic means by an insurer to a party under this section if:

(a) The party has affirmatively consented to such method of delivery and has not withdrawn the consent;

(b) The party, before giving consent, is provided with a clear and conspicuous statement informing the party of:

(i) The right of the party to withdraw consent to have a notice or document delivered by electronic means at any time;

(ii) Any conditions or consequences imposed in the event consent is withdrawn;

(iii) The transactions and types of notices and documents to which the party's consent would apply;

(iv) The right of a party to have a notice or document delivered in paper form by mail and the means, after consent is given, by which a party may obtain a paper copy of a notice or document delivered by electronic means; and

(v) The procedure a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update the party's electronic mail address;

(c) The party:

(i) Before giving consent, is provided with a statement of the hardware and software requirements for access to and retention of a notice or document delivered by electronic means; and

(ii) Consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent; and

(d) After consent of the party is given, the insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document to which the consent applies:

(i) Provides the party with a statement that describes:

(A) The revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means; and

(B) The right of the party to withdraw consent without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and

(ii) Complies with subdivision (4)(b) of this section.

(5) This section does not affect requirements related to content or timing of any notice or document required under applicable law.

(6) If any provision of Chapter 44 or any other applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt.

(7) If verification or acknowledgment of receipt is not obtained, the notice or document shall be sent to the party by mail as prescribed by Chapter 44. If two or more electronic communications to the party are returned as undeliverable during a thirty-day period, all future communications shall be sent to the party by first-class or other mail as prescribed by law unless and until the party consents electronically, or confirms electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent.

(8) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective. A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer. Failure by an insurer to comply with subdivision (4)(d) of this section may be treated, at the election of the party, as a withdrawal of consent for purposes of this section.

(9) This section does not apply to a notice or document delivered by an insurer in an electronic form before September 1, 2019, to a party who, before such date, has consented to receive notices or documents in an electronic form otherwise allowed by law.

(10) If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before September 1, 2019, and pursuant to this section an insurer intends to deliver additional notices or documents to such party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall provide the party with a statement that describes:

(a) The notices or documents that will be delivered by electronic means under this section that were not previously delivered electronically; and

(b) The party's right to withdraw consent to have notices or documents delivered by electronic means without the imposition of any condition or consequence that was not disclosed at the time of initial consent.

(11) An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if:

(a) The insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party; or

(b) The insurer becomes aware that the electronic mail address provided by the party is no longer valid.

(12) A producer shall not be subject to civil liability for any harm or injury that occurs as a result of a party's election to receive any notice or document by electronic means or by the insurer's failure to deliver a notice or document by electronic means.

(13) This section shall not be construed to modify, limit, or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., as such act existed on September 1, 2019.

(14) This section shall apply only to life insurance policies, annuity contracts, and property and casualty insurance policies.

Notwithstanding the provisions of section 44-315, life insurance policies, annuity contracts, and property and casualty insurance policies and endorsements that do not contain personally identifiable financial information as defined in section 44-903 may be mailed, delivered, or posted on the insurer's website. If the insurer elects to post insurance policies and endorsements on its website in lieu of mailing or delivering them to the insured, the insurer must comply with all of the following conditions:

(1) The policy and endorsements must be accessible to the insured and producer of record and remain that way for as long as the policy is in force;

(2) After the expiration of the policy, the insurer must archive its expired policies and endorsements for a period of five years and make them available upon request;

(3) The policies and endorsements must be posted in a manner that enables the insured and producer of record to print and save the policy and endorsements using programs or applications that are widely available on the Internet and free to use;

(4) The insurer must provide the following information in, or simultaneously with, each declarations page provided at the time of issuance of the initial policy and any renewals of such policy:

(a) A description of the exact policy and endorsement forms purchased by the insured;

(b) A description of the insured's right to receive, upon request and without charge, a paper copy of the policy and endorsements by mail; and

(c) The Internet address where the policy and endorsements are posted;

(5) The insurer, upon request and without charge, must mail a paper copy of the policy and endorsements to the insured; and

(6) The insurer must provide notice, in the manner in which the insurer customarily communicates with the insured, of any changes to the forms or endorsements, the insured's right to obtain, upon request and without charge, a paper copy of such forms or endorsements, and the Internet address where such forms or endorsements are posted.

No insurance producer, surplus lines licensee, or insurance consultant shall obtain a loan from an insurance client that is not a financial institution and who is not related to the insurance producer, surplus lines licensee, or insurance consultant by birth, marriage, or adoption.

A certificate under the seal of the department, relative to the authority of the company, insurance producer, business entity, or surplus lines licensee to transact business in this state upon any particular date, shall be received by any court in this state in lieu of the testimony of the director.

Every person acting as an insurance producer or surplus lines licensee in this state shall be responsible in a fiduciary capacity for all funds received or collected as an insurance producer or surplus lines licensee. Nothing in this section shall be construed to require any person to maintain a separate bank deposit if the funds of each principal are clearly ascertainable from the books of accounts and records of that person.

For purposes of sections 44-319.01 to 44-319.13, unless the context otherwise requires:

(1) Director shall mean the Director of Insurance or his or her authorized representative;

(2) Policyholders shall mean all persons having a legal or equitable right against a depositing insurer or assessment association arising out of or by reason of depositing insurer's or association's policies and obligees under its surety contracts;

(3) State shall mean any state of the United States, the government of Puerto Rico, and the District of Columbia;

(4) Eligible securities shall mean the investments authorized under the Insurers Investment Act other than investments authorized under sections 44-5134, 44-5143 to 44-5145, 44-5149, 44-5152, and 44-5153, and unless otherwise provided by law, the values of such investments shall, for the purpose of sections 44-319.01 to 44-319.13, be an amount not exceeding the current market values thereof; and

(5) Insurer shall mean stock and mutual insurance companies and reciprocal exchanges.

Every domestic insurer hereafter organized to transact the business of insurance in this state shall deposit and continually maintain with the Department of Insurance eligible securities for the benefit of all of its policyholders or policyholders and creditors in the United States in the amount of one hundred thousand dollars.

Every domestic assessment association hereafter organized to transact the business of insurance in this state, except (1) health and accident assessment associations and (2) assessment associations organized primarily to write insurance coverage on farm properties against the perils of fire, lightning, windstorm, and hail, shall deposit with the Department of Insurance eligible securities for the benefit of all of its policyholders or policyholders and creditors in the United States equal to one-fifth of the minimum surplus funds required of domestic mutual insurance companies licensed to write the same kind or kinds of insurance.

Domestic insurers and assessment associations transacting or desiring to transact business in any other state, province, or country may deposit additional securities with the Department of Insurance in the kind and to the amount required by such other state, province, or country as a condition to transact business therein.

Every domestic insurer and assessment association required by Chapter 44 to deposit securities with the Department of Insurance shall continue to deposit all of its eligible securities until they aggregate the sum of one hundred thousand dollars.

No foreign insurer or assessment association now or hereafter authorized to do business in this state shall henceforth transact such business unless it shall deposit and continually maintain with the Department of Insurance or with the proper official of some one state of the United States designated by law to accept such deposit, eligible securities in the amount of not less than one hundred thousand dollars for the benefit of all of its policyholders or policyholders and creditors in the United States.

(1) The depositing insurer or assessment association may, from time to time, exchange for the deposited securities, or any of them, other securities eligible for deposit if the aggregate value of such deposit will not thereby be reduced below the amount required by sections 44-319.01 to 44-319.13. Upon application of the depositing insurer or assessment association, the director may approve the withdrawal of securities which are in excess of the amount required by sections 44-319.01 to 44-319.13. Insurers and assessment associations may, upon an application approved by the director, withdraw all or any part of the securities so deposited upon good cause therefor being shown. Securities so withdrawn shall, except if withdrawn as the result of a merger, consolidation, or total reinsurance, be used to pay excess losses only and shall be restored within such time and under such conditions as the director may direct by order.

(2) If the depositing insurer or assessment association fails to comply with the requirements of subsection (1) of this section or the rules and regulations adopted and promulgated pursuant to section 44-319.11, such insurer or assessment association shall forfeit five hundred dollars for each such failure. The director shall collect and remit the forfeitures to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

No creditor or other claimant may levy upon such a deposit or any part thereof. Upon an order of liquidation, rehabilitation, or conservation of any depositing insurer or assessment association by a court of competent jurisdiction, the funds deposited and the income therefrom shall be deemed transferred to the director as liquidator, rehabilitator, or conservator.

All securities now held on deposit by the director, which were made pursuant to any prior insurance law, shall be deemed to be held in compliance with the provisions of sections 44-319.01 to 44-319.13, for the purpose for which such deposits were originally made.

(1) Unless prohibited by the order of a court, all income on securities deposited with the Department of Insurance or with an authorized depository of the department shall be collectible by the depositing insurer or assessment association. In the event such income is paid to the Director of Insurance or to the department, it shall be paid by the department into the state treasury and deposited by the State Treasurer in a trust fund to be known as the Securities Deposit Trust Fund which is hereby created, to be expended as provided by this section.

(2) The Director of Administrative Services, upon presentation of a voucher properly countersigned by the director, is authorized to draw his warrants against the Securities Deposit Trust Fund only for the purpose of paying to depositing insurers or assessment associations entitled thereto, amounts equal to the total income paid to the director or to the department on securities deposited with the department, all as more fully explained in subsection (1) of this section.

The director may designate any bank or trust company domiciled in this state as the depository for the Department of Insurance to receive and hold for safekeeping purposes any securities deposited pursuant to sections 44-319.01 to 44-319.13 or any prior insurance law. The holding of any such securities shall be at the expense of the insurer or assessment association. The director is hereby relieved of all personal and official liability for securities held by or in transit to or from such authorized depository. The director shall (1) adopt and promulgate reasonable rules and regulations relative to the manner in which securities may be deposited and withdrawn and (2) purchase such insurance as he or she may deem necessary for the protection of the State of Nebraska and its employees and agents. The premium for such insurance shall be paid from the Department of Insurance Cash Fund.

All securities heretofore or hereafter deposited with the Department of Insurance by any incorporated or unincorporated insurer or assessment association shall become the property of the State of Nebraska in the event such securities remain unclaimed for a period of not less than seven years following the effective date of a voluntary or involuntary liquidation, merger, consolidation, or total reinsurance thereof. It shall be the duty of the director to take necessary action to transfer the proceeds of such securities to the State Treasurer who shall, upon receipt thereof, deposit such proceeds to the account of the state General Fund.

Nothing in sections 44-319.01 to 44-319.13 shall be construed to amend, repeal, or otherwise affect the provisions of sections 44-305 and 44-821 to 44-825.

(1) Except as provided in subsections (2) through (6) of this section, no director or officer of any domestic insurance company shall directly or indirectly receive any money or valuable consideration for negotiating any loan for the company or for selling or aiding in the sale of any property to or by the company and no such director or officer shall directly or indirectly borrow money from, purchase any property from, or sell any property to the company.

(2)(a) Nothing in this section shall prevent any domestic insurance company from making a loan to an officer of the company for the purchase of a principal residence or acquiring the principal residence of an officer in connection with the relocation of the officer's place of employment at the request of the company either during the course of employment or upon initial employment of such officer. Any loan permitted under this subsection shall be secured by a first trust deed or first mortgage and shall not exceed seventy-five percent of the market value of the property. Any acquisition permitted under this subsection shall not exceed the market value of the property.

(b) For purposes of this subsection, market value shall mean the market value of real estate as determined by a real property appraiser credentialed by the Real Property Appraiser Board.

(c) Any loan or acquisition permitted under this subsection shall be subject to (i) the approval of the domestic insurance company's board of directors or a delegated committee of the company and (ii) prior written approval of the Director of Insurance based upon written application by the company including full and fair disclosure of the terms of the transaction. Approval of such transaction by the Director of Insurance shall be presumed unless notice of disapproval is received by the applicant within thirty days of the filing of the application. Approval of such transaction may be denied if the director finds that it is not in the best interest of the company or that the terms of the transaction are not fair and reasonable to the company.

(3) Nothing in this section shall prevent any director or officer of any domestic insurance company from purchasing from his or her company an insurance policy or annuity contract if (a) the purchase is in the ordinary course of the company's business and subject to all of the requirements normally imposed by the company in the sale of such policies and contracts and (b) no discount granted to the director or officer in connection with the purchase is greater than discounts provided to other employees of the company in connection with the sale of similar policies and contracts.

(4) Nothing in this section shall prevent any director or officer of any domestic insurance company from purchasing from his or her company surplus personal property having a total purchase price not in excess of ten thousand dollars in any calendar year if the personal property is sold to the director or officer at not less than its fair market value.

(5) Nothing in this section shall prevent any director or officer of any domestic insurance company from selling to his or her company property of any type or nature having a total purchase price not in excess of ten thousand dollars in any calendar year if the sale is in the ordinary course of business of the director's or officer's business and if the property is sold to the company at not more than its fair market value.

(6) Except as otherwise provided in this section, if any director or officer of any domestic insurance company desires to borrow money from, purchase any property from, or sell any property to the company in excess of ten thousand dollars in any calendar year, the company shall file an application with the Director of Insurance requesting written approval to engage in such transaction. The application shall set out the names of all of the parties interested in the transaction and the respective percentage of interest of each party, a brief description of the nature of the transaction, and a full disclosure of all consideration given or received by the company in connection with such transaction. The application shall be a public record open to public inspection from the date of filing. If the transaction is not approved or disapproved by the director within thirty days from the date of filing, the transaction shall be deemed disapproved. In determining whether to approve or disapprove such transaction, the director shall consider the following factors:

(a)(i) The fact that the transaction has been disclosed or made known to the board of directors of the company or a delegated committee of the company which must authorize approval or ratify the transaction by a vote or consent sufficient for the purpose without counting the vote or consent of any interested director or officer; and

(ii) If applicable, the fact of such transaction has been disclosed or made known to the shareholders entitled to vote and they authorize approval or ratify such transaction by vote or written consent; or

(b)(i) The transaction is fair and reasonable to the company; and

(ii) The transaction is of a nature normally engaged in by the company and the consideration is fair and reasonable.

(7) The Director of Insurance may proceed in a court of competent jurisdiction against a domestic insurance company to reverse or hold invalid a transaction made in violation of subsection (6) of this section unless the transaction was approved pursuant to such subsection.

(8) In addition to other remedies and penalties available under the law of this state, each violation of this section shall be an unfair trade practice in the business of insurance subject to the Unfair Insurance Trade Practices Act.

Retirement of the capital stock of a domestic stock insurance company and the payment to the holders of such stock of its value under a plan for the mutualization of such company shall not constitute a sale of such stock within the prohibition of section 44-320; nor shall a contract to reinsure or assume the risks and business of another insurance company through reinsurance or consolidation as provided for by sections 44-224.01 to 44-224.10, be deemed to be either a sale or purchase of property within the prohibition of section 44-320.

(1) For purposes of this section:

(a) Health insurance policy means (i) any individual or group sickness and accident insurance policy or subscriber contract delivered, issued for delivery, or renewed in this state and any hospital, medical, or surgical expense-incurred policy, except for a policy that provides coverage for a specified disease or other limited-benefit coverage, and (ii) any self-funded employee benefit plan to the extent not preempted by federal law; and

(b) School means a public, private, denominational, or parochial school which meets the requirements for accreditation or approval prescribed in Chapter 79.

(2) Notwithstanding section 44-3,131, an insurer offering a health insurance policy shall not deny coverage or payment for a mental health service solely because the service is delivered in a school.

(3) Nothing in this section shall:

(a) Require an insurer offering a health insurance policy to pay for mental health services that are otherwise excluded from such health insurance policy;

(b) Require an insurer offering a health insurance policy to pay for mental health services that are provided by an individual employed by or under contract with a school district or an educational service unit in a regular full-time or part-time position; or

(c) Prevent application of any other provision of such health insurance policy.

(4) This section applies to health insurance policies issued or renewed on or after January 1, 2020, and to claims for reimbursement based on such policies for costs incurred on or after January 1, 2020.

(1)(a)(i) Every insurance company holding a certificate of authority to transact the business of insurance in this state shall file with the director or, if required by the director, with the National Association of Insurance Commissioners, on or before March 1 of each year, an annual financial statement for the year ending December 31 immediately preceding on forms prescribed by the director which conform substantially to the forms adopted by the National Association of Insurance Commissioners, except that fees, premium tax payments, and other payments associated with such filings shall be paid to the director.

(ii) The financial statement shall be prepared in accordance with annual statement instructions and accounting practices and procedures manuals as prescribed by the director which conform substantially to the annual statement instructions and the Accounting Practices and Procedures Manuals adopted by the National Association of Insurance Commissioners.

(iii) The salaries and compensation of the officers and any other information required by the director shall be filed with the director.

(iv) Every insurance company subject to this section shall make such other periodic financial filings as the director may reasonably require.

(b)(i) Within seven days after the failure of an insurance company to comply with the requirements of subdivision (1)(a) of this section, the director shall notify the insurance company of such failure.

(ii) Subject to subdivision (1)(b)(iii) of this section, if an insurance company fails to comply with the requirements of subdivision (1)(a) of this section and any rules and regulations adopted and promulgated under such subdivision and any orders issued under such subdivision, (A) such insurance company shall pay a fine of one hundred dollars for each day thereafter such failure continues and the insurance company continues to transact any business of insurance and (B) in addition to the fine required under subdivision (1)(b)(ii)(A) of this section, the director may suspend or refuse to renew the certificate of authority of the insurance company until it has complied with the requirements of subdivision (1)(a) of this section and any rules and regulations adopted and promulgated under such subdivision and any orders issued under such subdivision. The director shall remit all such fines to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

(iii) For good and sufficient cause shown, the director may grant a reasonable extension of time not to exceed thirty days within which the financial statement may be filed as required under subdivision (1)(a) of this section without the fine required under subdivision (1)(b)(ii)(A) of this section and without any suspension or refusal to renew authorized under subdivision (1)(b)(ii)(B) of this section.

(2) Every insurance company holding a certificate of authority to transact the business of insurance in this state shall participate in the National Association of Insurance Commissioners Insurance Regulatory Information System, including the payment of all fees and charges of such system, except as exempted by the director. Each participating insurance company shall file with the National Association of Insurance Commissioners on or before March 1 of each year a copy of its annual financial statement along with any additional filings required by the director for the immediately preceding year. The financial statement so filed shall be in the same format and scope as that required by subsection (1) of this section and shall include a signed jurat page and actuarial certification except as exempted by the director. Each participating insurance company shall file with the National Association of Insurance Commissioners any amendments and addendums to the financial statement and annual and quarterly financial statement information in computer readable format as required by the Insurance Regulatory Information System.

(1) All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the director by the National Association of Insurance Commissioners which are determined by such association to be confidential may not be disclosed or released for public inspection by the director.

(2) In the absence of actual malice, members of the National Association of Insurance Commissioners, the association's duly authorized committees, subcommittees, task forces, delegates, and employees, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks are acting as agents of the director and shall not be subject to civil liability for libel, slander, or any cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required of insurance companies under the insurance laws of this state or similar laws of other states.

(1) For purposes of this section:

(a) Insurance coverage means coverage under a disability insurance, life insurance, or long-term care insurance policy; and

(b) Living organ donor means an individual who:

(i) Has donated all or part of an organ; and

(ii) Is not deceased.

(2) It shall be unlawful for an insurer to deny insurance coverage, cancel insurance coverage, or determine the price or premium for, refuse to issue, or otherwise vary any term or condition of a life insurance policy, disability insurance policy, or long-term care insurance policy solely on the basis of an individual's status as a living organ donor and without any unique and material actuarial risks in accordance with sound actuarial principles and actual and reasonably anticipated and expected experiences of such individual on the basis of the individual's status as a living organ donor.

No domestic insurer shall declare or pay a dividend from any source other than earned surplus. For purposes of this section, earned surplus means an amount equal to the unassigned funds of an insurer as set forth in the most recent annual statement of the insurer submitted to the Director of Insurance including any surplus arising from unrealized capital gains or revaluation of assets.

Any dividend in excess of the unassigned funds of an insurer, excluding any surplus arising from unrealized capital gains or revaluation of assets, shall be deemed an extraordinary dividend and shall be subject to the requirements of section 44-2134.

No domestic company shall make any disbursement of one hundred dollars or more other than policy proceeds or benefits unless the disbursement is evidenced by an invoice, a statement of account, or a voucher issued by or on behalf of the person, firm, or corporation receiving the money and correctly describing the consideration for the disbursement. If the invoice, statement of account, or voucher is unavailable, the disbursement shall be evidenced by an affidavit of some officer of the company identifying the disbursement and the consideration for the disbursement and stating the reason the invoice, statement of account, or voucher is unavailable.

Except as otherwise provided in Chapter 44 or by the director, no insurance policy, bond, or certificate issued under such policy or bond shall be issued or delivered in this state unless and until a copy of the form has been filed with and approved by the director.

No policy or contract of insurance or renewal thereof shall be made, issued, used, or delivered by any assessment insurer in this state unless it states on its face that it is issued by an assessment insurer.

Every insurance company shall conduct its business in this state in its own name, and the policies and contracts of insurance issued by it shall be headed or entitled by such name. Two or more companies may jointly issue an underwriter's policy, upon which must appear the names of the companies guaranteeing the same, and such companies shall be jointly and severally liable thereon; Provided, this limitation shall not apply to any insurance company admitted to this state and issuing an underwriter's policy prior to the passage and approval of this chapter, nor, in the discretion of the Department of Insurance, to any insurance company desiring to issue an underwriter's policy after the passage and approval of this chapter.

No company, association, or society organized under sections 44-202 to 44-208.08 shall take any name in use by any other company, association, or society or so closely resembling such name as to mislead the public as to its identity.

It shall be unlawful for any insurance company to permit the use of its name or for any other company, person, or firm to use the name of any insurance company in such a way as to deceive or mislead the public. The violation of this section or section 44-351 by an insurance company shall be grounds for the suspension or revocation of its license, and the person, firm, or corporation so using the name of an insurance company shall be punished by a fine not exceeding one hundred dollars for each offense. An appeal of a suspension, revocation, or fine may be taken, and the appeal shall be in accordance with the Administrative Procedure Act.

The Department of Insurance and its employees shall have the right at any time to inspect any policy covering any risk in this state. Every policyholder shall procure and exhibit any policy in his possession or control when required for the inspection of the department or its assistants or employees.

It shall be unlawful for any insurance company, association or society, or for any officer, manager, agent, or other representative thereof, to include in the sum charged or designated in any policy as the consideration for insurance, any fee, compensation, charge, or perquisite whatsoever, not specified in the policy. When collected the same shall be reported as such.

Every agent or other representative of any company issuing a policy on its own behalf in this state shall report to the company the exact consideration charged and written in the policy as a premium for the risk.

(1) A violator of any of the provisions of section 44-353 shall be fined not more than one hundred dollars.

(2) A violation of any of the provisions of section 44-354 or 44-355 shall be an unfair trade practice in the business of insurance subject to the Unfair Insurance Trade Practices Act.

No insurance company shall issue in this state any policy or contract of insurance containing a provision, stipulation or agreement that such policy shall be construed according to the laws of any other state or country, or any provision limiting the time within which an action may be brought to less than the regular period of time prescribed by the statutes of limitations of this state, unless otherwise prescribed by this chapter.

No oral or written misrepresentation or warranty made in the negotiation for a contract or policy of insurance by the insured, or in his behalf, shall be deemed material or defeat or avoid the policy, or prevent its attaching, unless such misrepresentation or warranty deceived the company to its injury. The breach of a warranty or condition in any contract or policy of insurance shall not avoid the policy nor avail the insurer to avoid liability, unless such breach shall exist at the time of the loss and contribute to the loss, anything in the policy or contract of insurance to the contrary notwithstanding.

In all cases when the beneficiary or other person entitled thereto brings an action upon any type of insurance policy, except workers' compensation insurance, or upon any certificate issued by a fraternal benefit society, against any company, person, or association doing business in this state, the court, upon rendering judgment against such company, person, or association, shall allow the plaintiff a reasonable sum as an attorney's fee in addition to the amount of his or her recovery, to be taxed as part of the costs. If such cause is appealed, the appellate court shall likewise allow a reasonable sum as an attorney's fee for the appellate proceedings, except that if the plaintiff fails to obtain judgment for more than may have been offered by such company, person, or association in accordance with section 25-901, then the plaintiff shall not recover the attorney's fee provided by this section.

If any insurance company authorized to transact business in this state or any agent or representative thereof shall, either within or outside this state, directly or indirectly, enter into any contract, understanding, or combination with any other insurance company, agent, or representative thereof or with any association of such companies or agents, for the purpose of controlling the rates to be charged for insuring any risk or class or classes of risks in this state or for the purpose of, or that may have the tendency or effect of, preventing or lessening lawful competition in the transaction of the business of insurance in this state, the Department of Insurance shall forthwith revoke its license and the licenses of its agents, and no renewal of the license shall be granted until after the expiration of one year from the date of final revocation. An appeal may be taken from the decision of the department, and the appeal shall be in accordance with the Administrative Procedure Act.

(1) No insurance company, by itself or any other party, and no insurance agent or broker, personally or by any other party, shall offer, promise, allow, give, set off, or pay, directly or indirectly, any rebate of, or part of, the premium payable on the policy, or of any policy, or agent's commission thereon, or earnings, profits, dividends, or other benefits founded, arising, accruing or to accrue thereon or therefrom, or any paid employment or contract for service, or for advice of any kind, or any other valuable consideration or inducement to, or for insurance, on any risk authorized to be taken under section 44-201 now or hereafter to be written, which is not specified in the policy contract of insurance. No such company, agent, or broker, personally or otherwise, shall offer, promise, give, sell or purchase any stock, bonds, securities or property, or any dividends or profits accruing or to accrue thereon, or other things of value whatsoever, as inducement to insurance or in connection therewith, which is not specified in the policy. No insured person or party shall receive or accept, directly or indirectly, any rebate of premium, or part thereof, or agent's or broker's commission thereon, payable on the policy, or on any policy of insurance, or any favor or advantage or share in the dividends or other benefits to accrue on, or any valuable consideration or inducement not specified in the policy contract of insurance.

(2) Extending of interest-free credit on life and liability insurance premiums or interest-free credit on crop hail insurance premiums shall not be considered a rebate of the premium for purposes of this section.

(3) Payments made pursuant to the Nebraska Right to Shop Act shall not be considered a rebate of the premium for purposes of this section.

(4)(a) The offer or provision by an insurance company or an agent or broker, by or through employees, affiliates, or third-party representatives, of value-added products or services at no or reduced cost when such products or services are not specified in the policy of insurance shall not be prohibited by this section if the product or service:

(i) Relates to the insurance coverage; and

(ii) Is primarily designed to satisfy one or more of the following:

(A) Provide loss mitigation or loss control;

(B) Reduce claim costs or claim settlement costs;

(C) Provide education about liability risks or risk of loss to persons or property;

(D) Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risk;

(E) Enhance health;

(F) Enhance financial wellness through items such as education or financial planning services;

(G) Provide post-loss services;

(H) Incent behavioral changes to improve the health or reduce the risk of death or disability of a customer; or

(I) Assist in the administration of the employee or retiree benefit insurance coverage.

(b) The cost to the insurance company or agent or broker offering the product or service to any given customer shall be reasonable in comparison to that customer's premiums or insurance coverage for the policy class.

(c) If the insurance company or agent or broker is providing the product or service offered, the insurance company or agent or broker shall ensure that the customer is provided with contact information to assist the customer with questions regarding the product or service.

(d) The Director of Insurance may adopt and promulgate rules and regulations when implementing the permitted practices set forth in this subsection to ensure consumer protection. Such rules and regulations, consistent with applicable law, may address, among other issues, consumer data protections and privacy, consumer disclosure, and unfair discrimination.

(e) The availability of the value-added product or service shall be based on documented objective criteria and offered in a manner that is not unfairly discriminatory. The documented criteria shall be maintained by the insurance company or agent or broker and produced upon request by the Department of Insurance.

(f) If an insurance company or agent or broker does not have sufficient evidence, but has a good-faith belief that the product or service will achieve the purpose for which such product or service was primarily designed under subdivision (4)(a)(ii) of this section, the insurance company or agent or broker may provide the product or service in a manner that is not unfairly discriminatory as part of a pilot or testing program for no more than one year. An insurance company or an agent or broker shall notify the Department of Insurance of any such pilot or testing program offered to consumers in this state prior to launching such pilot or testing program and may proceed with the program unless the department objects within twenty-one days of such notice.

(5) Notwithstanding the other provisions of this section, an insurance company or an agent or broker may:

(a) Offer or give noncash gifts, items, or services, including meals to or charitable donations on behalf of a customer, in connection with the marketing, sale, purchase, or retention of contracts of insurance, as long as the cost does not exceed an amount determined to be reasonable by the Director of Insurance, per policy year per term. The offer shall be made in a manner that is not unfairly discriminatory. The customer shall not be required to purchase, continue to purchase, or renew a policy in exchange for the gift, item, or service; and

(b) Conduct drawings or raffles to the extent permitted by state law, as long as there is no financial cost to entrants to participate, the drawing or raffle does not obligate participants to purchase insurance, the prizes are not valued in excess of a reasonable amount determined by the Director of Insurance, and the drawing or raffle is open to the public. The drawing or raffle must be offered in a manner that is not unfairly discriminatory. The customer shall not be required to purchase, continue to purchase, or renew a policy in order to participate in the drawing or raffle or in exchange for the drawing or raffle prize.

(6) For purposes of subsections (4) and (5) of this section, customer means a policyholder, potential policyholder, certificate holder, potential certificate holder, insured, potential insured, or applicant.

(1) A licensed agent whose total commissions and underwriting fees on business written upon the property, life, health, or liability of himself or herself, his or her relatives by consanguinity or affinity, and his or her employer or employees exceed ten percent of the total commissions or underwriting fees received during any one license year shall be presumed to have obtained a license or renewal thereof primarily to circumvent the enforcement of section 44-361, except that for a licensed agent soliciting crop insurance, the percentage shall be thirty percent for commissions and underwriting fees on crop insurance business.

(2) A licensed agent whose total commissions and underwriting fees on business written upon the property, life, health, or liability of himself or herself, his or her relatives by consanguinity or affinity, and his or her employer or employees exceed thirty percent of the total commissions and underwriting fees received during any one license year shall be conclusively presumed to have obtained a license or renewal thereof primarily to circumvent the enforcement of section 44-361, except that for a licensed agent soliciting crop insurance, the percentage shall be fifty percent for commissions and underwriting fees on crop insurance business.

Any agent who is found to have obtained a license or renewal primarily to circumvent enforcement of section 44-361 shall, in addition to any other penalty imposed by law, be guilty of a Class V misdemeanor.

The license of any insurance company, agent, or broker found by the Department of Insurance, after hearing, to have violated section 44-361 may be revoked or suspended. Appeal may be taken from the decision of the Director of Insurance, and the appeal shall be in accordance with the Administrative Procedure Act.

It shall be unlawful for any company or agent thereof to hypothecate, sell or dispose of a promissory note, received in payment for any part of a premium on a policy of insurance applied for under the provisions of this chapter, prior to the delivery of the policy to the applicant.

A life insurance company may provide that the amount to become due under a policy shall be paid in installments to a beneficiary therein named. If such beneficiary shall die before all said installments are paid, said policy may provide to whom the remaining ones shall be paid. Any person holding a policy in any such company may, without the consent of the beneficiary, unless the appointment of such beneficiary be irrevocable, either sell and surrender the same to the company, or pledge or assign the same as security for a debt, which, if due the company, shall be secured by said policy, whether it is in the possession of the company or not; or, with the consent of the company, he may change his beneficiary unless the appointment of such beneficiary be irrevocable.

(1)(a) Except as provided in subdivision (1)(b) of this section and in section 68-919, all proceeds, cash values, and benefits accruing under any annuity contract, under any policy or certificate of life insurance payable upon the death of the insured to a beneficiary other than the estate of the insured, or under any accident or health insurance policy shall be exempt from attachment, garnishment, or other legal or equitable process and from all claims of creditors of the insured and of the beneficiary if related to the insured by blood or marriage, unless a written assignment to the contrary has been obtained by the claimant.

(b) Subdivision (1)(a) of this section shall not apply to:

(i) An individual's aggregate interests greater than one hundred thousand dollars in all loan values or cash values of all matured or unmatured life insurance contracts and in all proceeds, cash values, or benefits accruing under all annuity contracts owned by such individual; and

(ii) An individual's interest in all loan values or cash values of all matured or unmatured life insurance contracts and in all proceeds, cash values, or benefits accruing under all annuity contracts owned by such individual, to the extent that the loan values or cash values of any matured or unmatured life insurance contract or the proceeds, cash values, or benefits accruing under any annuity contract were established or increased through contributions, premiums, or any other payments made within three years prior to bankruptcy or within three years prior to entry against the individual of a money judgment which thereafter becomes final.

(c) An insurance company shall not be liable or responsible to any person to determine or ascertain the existence or identity of any such creditors prior to payment of any such loan values, cash values, proceeds, or benefits.

(2) Notwithstanding subsection (1) of this section, proceeds, cash values, and benefits accruing under any annuity contract or under any policy or certificate of life insurance payable upon the death of the insured to a beneficiary other than the estate of the insured shall not be exempt from attachment, garnishment, or other legal or equitable process by a judgment creditor of the beneficiary if the judgment against the beneficiary was based on, arose from, or was related to an act, transaction, or course of conduct for which the beneficiary has been convicted by any court of a crime punishable only by life imprisonment or death. No insurance company shall be liable or responsible to any person to determine or ascertain the existence or identity of any such judgment creditor prior to payment of any such proceeds, cash values, or benefits. This subsection shall apply to any judgment rendered on or after January 1, 1995, irrespective of when the criminal conviction is or was rendered and irrespective of whether proceedings for attachment, garnishment, or other legal or equitable process were pending on March 14, 1997.

Any policy containing a provision for a deferred annuity on the life of the insured only, unless paid for by a single premium, shall provide that in the event of the nonpayment of any premium after three full years' premium shall have been paid, the annuity shall automatically become converted into a paid-up annuity for such proportion of the original annuity as the number of completed years' premiums paid bears to the total number of premiums required under the contract.

Whenever a corporation, organized under the laws of this state, has heretofore caused or shall hereafter cause the life of any director, officer, agent or employee to be insured, or whenever such corporation is named as a beneficiary in, or assignee of, any policy of life insurance, due authority to assign, release, relinquish, convert, surrender, change the beneficiary, or to take any other or different action with reference to such insurance, shall be sufficiently evidenced to the insurance company by a written statement that the same has been approved by a majority of the board of directors, which statement shall be signed by the president and the secretary, or other corresponding officer, of such corporation, under its corporate seal. Such statement shall be binding upon such corporation, and shall protect the insurance company concerned in any act done or suffered by it upon the faith thereof without further inquiry into the validity of the corporate authority or the regularity of the corporate proceedings. No person shall be disqualified, by reason of interest in the subject matter, from acting as a director or as a member of the executive committee of such corporation on any corporate act touching such insurance.

No policy of insurance shall be issued upon any property except in the name of some party having an interest in the property.

When the name of the party intended to be insured is specified in a policy, such insurance can be applied only to his own proper interest.

When insurance is issued to an agent or trustee, the fact that his principal or beneficiary is the person really insured is sufficiently indicated by describing him as agent or trustee or by other general words in the policy.

To render an insurance policy effective by one partner, member, or part owner applicable to the interest of another partner, member, or owner, it is necessary that the terms of the policy should be such as are applicable to the joint, partnership, or limited liability company interest.

When the description of the insured in the policy is so general that it may comprehend any person or class of persons, he only can claim the benefit of the policy who can show that it was intended to include him.

Nothing in Chapter 44 shall be construed to prevent any number of persons, not to exceed two thousand five hundred, who are residents of this state from making mutual pledges and giving valid obligations to each other for their own insurance from loss by fire, lightning, tornado, cyclone, windstorms, hail, death, or other cause for which insurance may be obtained under any of the laws of this state. Such association of persons shall in no case insure any property not owned by one of their number and no life except that of their number, nor shall the provisions of Chapter 44, article 3, or the Insurers Investment Act be applicable to such associations of persons except that the Department of Insurance may require such reports as it deems advisable. Such associations of persons shall receive no premiums, shall make no dividends, and shall not hire or compensate any agent, solicitors, adjusters, or appraisers. Officers and employees of such association shall be hired by the board of directors. All salaries of such officers and employees shall be approved by the board, but in no case shall such salaries exceed ten dollars per day. No such association of persons shall ever make any levies or collect any money from its members or prospective members except to pay for losses on property or lives insured and such expenses as are necessary and incidental to the operation of such association, except that one membership fee of not more than five dollars per person may be charged at the time of entrance for the purpose of providing a fund, which shall not be in excess of one hundred fifty percent of the average monthly disbursement during such calendar year at the end of each calendar year unless specifically approved by the director each year, out of which benefits may be paid pending assessment receipts and for the purpose of paying initial expenses. All fees and receipts shall be debited to the assets of the association and shall be expended as allowable for expenses, salaries, and benefits or distributed as provided in this section. No money shall be paid or donated to any organization or to any person except as a benefit or as an allowable salary or expense. All expenses including salaries shall not exceed twenty percent of all assessments, levies, and fees received. No surplus except that in the fund described in this section shall be maintained or allowed. Advance payments of assessments shall not be considered as surplus money for purposes of this section. All surplus money except that maintained in the fund and that allowed for expenses and salaries must be distributed to the members, except that if membership in such association is limited to the employees or former employees of a particular employer and such employer has contributed funds to such association to be used to pay benefits to the members in the period during which any such surplus fund was accumulated, then upon any distribution of such surplus, other than in payment of expenses, salaries, and benefits, whether upon the order of the Director of Insurance or otherwise, such distribution shall be equitably divided among the members in good standing on the date of such distribution and such employer in proportion to their respective contributions made in the period during which such surplus was accumulated. No such distribution shall be made until approved by the director.

No association described in section 44-386 as may hereafter be formed shall provide any insurance coverage until it has filed with and received the approval of the Department of Insurance on such association's contract of association containing the name of the association, the place in Nebraska where its principal office will be located, the method of electing its officers and directors, and the method and procedure of doing business and copies of all contracts of association for insurance, applications, policies, certificates, and other evidence of insurance coverage to be used by such association in connection with its operation. No such association shall receive approval to operate if it has not filed its contract of association prior to August 25, 1989. All changes of or any additions to such information shall first be filed with and approved by the department before such changes or additions are used or become effective.

No such association now existing shall continue to operate after June 30, 1964, unless it shall have met the requirements of section 44-386.01.

Every such association shall hold annual meetings of its members at regular intervals which shall not be, in any case, more than fourteen nor less than ten months apart. At such annual meeting there shall be transacted such business of the association as may come before it, which business shall include but not be limited to the election of officers or directors from among the members. All of said officers or directors shall be elected annually and shall not be less than five in number; Provided, that the Director of Insurance may approve a different number of directors and officers, or a different method of choosing the directors or officers, or both, or both a different number and a different method of choosing such directors and officers, if, in the opinion of the director, the interests of the members of the association are adequately protected thereby. Passage of all matters and business of such association shall require at least a majority vote of the members present in person or by proxy at any annual meeting or at any special meeting called. Notice of such annual meeting or special meeting shall be mailed to each member at his last-known address or otherwise distributed to him not less than ten nor more than thirty days prior to such meeting; Provided, that all references to members in this section shall be construed to mean a parent or the legal guardian of every member who is under twenty years of age. The minutes of every annual and special meeting must be taken and made available to any member upon request.

The books and records of every such association and every officer, director, or employee thereof shall be subject to the inspection and examination of the Department of Insurance. Upon at least ten days' written notice to the president or secretary of the association, the Director of Insurance may require that the books and records be brought to the Department of Insurance for inspection and examination.

Whenever, from an inspection of the books and records or a review of the annual report, the Director of Insurance deems it prudent for the protection of the members of any association, he or she may conduct a hearing on the business affairs of the association. Notice shall be given as provided in the Administrative Procedure Act. Actual expenses of the Department of Insurance shall be paid by the association.

If, after the hearing provided for in section 44-386.05, the Director of Insurance finds that any rule or regulation adopted and promulgated pursuant to section 44-386.08 or any statute is being violated, he or she may issue an order to cease and desist all business of the association or any activity connected therewith until such time as corrective measures have been taken. If the director determines that any officer or member has misappropriated any funds or wrongfully converted any funds to his or her own use, he or she shall refer the matter to the county attorney of the county in which the books of the association are kept for prosecution by the county attorney under the applicable criminal statutes.

If the Director of Insurance orders any person to cease and desist all business of the association or any activity connected therewith, such order may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

The Director of Insurance may adopt and promulgate rules and regulations for the administration and enforcement of the provisions of sections 44-386.01 to 44-386.07, for the procedures for examination of books and records, for the requirements of reports, and for procedures for approval of changes or additions of evidence of insurance coverage to be used by the associations.

Any bank, trust company, investment company, bank affiliate, corporation, partnership, limited liability company, or association, owned or controlled by any bank located in this state, may sell or solicit any kind or form of insurance, either directly or indirectly, through any officer, agent, employee, or representative thereof. The sale and solicitation of insurance pursuant to this section shall be subject to compliance with the insurance laws of this state and rules and regulations adopted and promulgated thereunder.

Every insurance company, agent, solicitor, or broker, and every person or party having knowledge of violation of any of the provisions of this chapter, is required to promptly report the facts and circumstances pertaining thereto to the Department of Insurance, which report and the name of the informant may be held confidential by the department, its officers, assistants and employees, and not be made public.

Any company or person who knowingly violates any provision of this chapter for which no penalty is provided, shall be guilty of a Class III misdemeanor.

In all proceedings instituted in any court, or otherwise, under the provisions of this chapter, it shall be and hereby is made the duty of the Attorney General, and of the several county attorneys throughout the state, to prosecute or defend all such proceedings, when requested by the Department of Insurance.

No person shall be excused from testifying, or from producing any books, papers, contracts, agreements or documents at the trial or hearing of any person or company charged with violating any provisions of this chapter, on the ground that such testimony or evidence may tend to incriminate himself, but no person shall be prosecuted for any act concerning which he shall be compelled so as to testify or produce evidence, documentary or otherwise, except for perjury committed in so testifying.

Every domestic stock insurer shall file with the Director of Insurance, on such forms as the director may require, a separate statement for each person who is directly or indirectly the beneficial owner of more than ten percent of any class of any equity security of such insurer, and for each person who is a director or an officer of such insurer. The statement of the amount of all equity securities of such insurer, directly or indirectly owned by the individuals enumerated above, shall be filed with the director on or before January 1, 1970; within ten days after a person becomes an officer, director, or such beneficial owner; and within ten days after the close of each calendar month thereafter, if there has been a change in such ownership.

As used in sections 44-3,107 to 44-3,114, unless the context otherwise requires:

(1) Person shall mean any individual, corporation, partnership, limited liability company, association, joint-stock company, business trust, unincorporated organization, or holding company whose primary purpose is owning or controlling insurance companies. A holding company shall be presumed to have as its primary purpose the owning or controlling of insurance companies if fifty-one percent or more of the assets of the holding company consist of the equity securities of one or more stock insurers, one of which is a domestic stock insurer; and

(2) Officer shall mean president, vice president, treasurer, actuary, secretary, controller, or any other person who performs the company functions corresponding to those performed by any of the foregoing officers.

Any person who is the beneficial owner of more than ten percent of the equity securities of any class of a domestic stock insurer and any officer or director of a domestic stock insurer who shall purchase or hold the stock of such insurer shall report such purchase or holding to such domestic stock insurer. Such report shall be filed with such insurer within five days after a person becomes an officer, director or such beneficial owner and not later than the close of the calendar month in which there has been a change in such ownership. Failure of any individual to report such ownership or purchase shall relieve the insurer of the duties prescribed in section 44-3,107 unless the insurer knows or should have known that the purchase was made by an officer, director, or beneficial owner of more than ten percent of the equity securities of the insurer.

A person, instead of the insurer, shall file the reports required by section 44-3,107 if:

(1) He fails to make the reports required by section 44-3,107.02; or

(2) His indirect beneficial ownership in the equity securities of a domestic stock insurer through a holding company, together with the amount of such equity securities of which he is otherwise directly or indirectly the beneficial owner, aggregate more than ten percent of the outstanding equity securities of a domestic stock insurer.

Any domestic insurer which fails to comply with section 44-3,107 and any person who fails to comply with section 44-3,107.03 shall forfeit to the State of Nebraska the sum of one hundred dollars for each and every day such failure to comply shall continue. Such forfeiture, which shall be in lieu of any criminal penalty for such failure to comply which might be deemed to arise under sections 44-3,107 to 44-3,107.04 and 44-3,111 to 44-3,114, shall be payable into the treasury of the State of Nebraska and shall be recoverable in a civil suit in the name of the State of Nebraska.

For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his relationship to such company, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. This section shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Director of Insurance by rules and regulations may exempt as not comprehended within the purpose of this section.

It shall be unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such company if the person selling the security or his principal (1) does not own the security sold, or (2) if owning the security, does not deliver it against such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if he proves that notwithstanding the exercise of good faith he was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.

The provisions of section 44-3,108 shall not apply to any purchase and sale, or sale and purchase, and the provisions of section 44-3,109 shall not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held by him in an investment account, by a dealer in the ordinary course of his business and incident to the establishment or maintenance by him of a primary or secondary market, otherwise than on an exchange as defined in the Securities Exchange Act of 1934, for such security. The Director of Insurance may, by such rules and regulations as he deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.

The provisions of sections 44-3,107 to 44-3,109 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the Director of Insurance may adopt and promulgate in order to carry out the purposes of sections 44-3,107 to 44-3,114.

Equity security when used in sections 44-3,107 to 44-3,114 shall mean (1) any stock or similar security, (2) any security convertible, with or without consideration, into such a security or carrying any warrant or right to subscribe to or purchase such a security, (3) any such warrant or right, or (4) any other security which the Director of Insurance deems to be of similar nature and considers necessary or appropriate, by such rules and regulations as he or she may adopt and promulgate in the public interest or for the protection of investors, to treat as an equity security.

The provisions of sections 44-3,107 to 44-3,109 shall not apply to equity securities of a domestic stock insurance company if such securities shall be registered, or shall be required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended, and a copy of such registration has been filed with the director, if so requested.

The Director of Insurance shall have the power to adopt and promulgate such rules and regulations as may be necessary for the execution of the functions vested in him or her by the provisions of sections 44-3,107 to 44-3,113 and may for such purpose classify domestic stock insurance companies, securities, and other persons or matters within his or her jurisdiction. No provision of sections 44-3,107 to 44-3,109 imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Director of Insurance, notwithstanding that such rule or regulation may, after such act or omission, be amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

Sections 44-3,115 to 44-3,118 shall apply to all domestic stock insurers having one hundred or more shareholders, except that such sections shall not apply to any insurer if ninety-five percent or more of its stock is owned or controlled by a parent or an affiliated insurer and the remaining shares are held by less than five hundred shareholders. A domestic stock insurer which files with the Securities and Exchange Commission forms of proxies, consents, and authorizations complying with the requirements of the Securities Exchange Act of 1934, the Securities Exchange Act amendments of 1964, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder shall file copies of all such documents with the Director of Insurance on the same date such documents are filed with the Securities and Exchange Commission.

To insure that shareholders are provided with adequate information and to prevent fraud, deception, or dissemination of misleading information, a copy of every form of proxy, consent, or authorization for use at any meeting of shareholders and a copy of every solicitation, announcement, or other communication to shareholders under circumstances reasonably calculated to result in the procurement, withholding, or revocation of a proxy, consent, or authorization shall be filed with the director by the person intending to use, issue, publish, or circulate such document.

The documents required to be filed with the Director of Insurance by sections 44-3,116 and 44-3,117 shall not be used, issued, published or circulated before a period of ten days following the date of such filing, or any such shorter period as may be authorized by the director, has elapsed. Within such ten-day or shorter period, the director may disapprove of any document filed with him, stating his reasons therefor in writing, in which case such documents shall not be used, issued, published, or circulated.

Any domestic stock insurer or any person who uses any proxy, consent or authorization obtained in violation of sections 44-3,115 to 44-3,118, or who fails to make the filing required by sections 44-3,115 to 44-3,118 and who thereafter uses any document required to be filed, or who uses any document before it has been filed with the director for the required period of time, or who uses any such document after receiving written notice that the document has been disapproved by the Director of Insurance, or who uses any document which is false or misleading with respect to any material fact or omits to state any material fact shall forfeit to the State of Nebraska the sum of one thousand dollars. Such forfeiture, which shall be in lieu of any criminal penalties for such act or failure to act which might be deemed to arise under the provisions of sections 44-3,115 to 44-3,118, shall be payable to the State Treasurer and shall be recoverable in a civil suit in the name of the State of Nebraska.

Unless proxies, consents, or authorizations in respect of a stock of a domestic insurer subject to the provisions of section 44-3,115 are solicited by or on behalf of the management of such insurer from the holders of record of stock of such insurer in accordance with the rules and regulations adopted and promulgated by the Director of Insurance pursuant to sections 44-3,115 to 44-3,118 prior to any annual or other meeting, such insurer shall, in accordance with such rules and regulations, file with the director and transmit to all shareholders of record information substantially equivalent to the information which would be required to be transmitted if such a solicitation were made.

In accordance with the provisions of sections 44-3,115 to 44-3,118, the Director of Insurance shall adopt and promulgate such rules and regulations as are reasonable, necessary, or appropriate in the public interest or for the protection of investors (1) to define the provisions and applicability of sections 44-3,115 to 44-3,118, (2) to require that information including proxy statements be transmitted to shareholders and to prescribe the kind, content, and form of such information and the circumstances, time, and manner in which such information shall be transmitted, (3) to prescribe the content, form, and requirements of proxies, consents, and authorizations and the circumstances, time, and manner in which such proxies, consents, and authorizations may be solicited, and (4) to require that information, including forms of proxy statements, proxies, consents, and authorizations, be filed with the director and to prescribe the kind, content, and form of such information and the circumstances, time, and manner in which such information shall be filed.

Any member, officer, director, or attorney in fact of any company or association licensed to do an insurance business in this state, who on behalf of such company or association borrows, rents, hires, leases, or otherwise engages the use of stocks, bonds, debentures, notes, investment certificates, securities, or other obligations or evidences of indebtedness owned or issued by any other corporation, company, association, or individual, or of any government political subdivision or agency thereof, with intent to injure or defraud any other company, body politic or corporation, or person, or to deceive the Director of Insurance or any other person legally authorized to examine the affairs of any such company or association shall be guilty of a felony.

Any corporation organized under any laws of this state, or the laws of any other state, or which has an office or is transacting business in this state, which is engaged in, organizing or receiving subscriptions for or disposing of stocks of, or in any manner aiding or taking part in the formation or in the business of an insurance company or association, either as agent or otherwise, or which is holding capital stock of one or more insurance companies for the purpose of controlling the management thereof as voting trustees or otherwise, or any employee, agent, or attorney thereof, who aids and abets such insurance company or association in borrowing, renting, hiring, leasing, or engaging the use of such stocks, bonds, debentures, notes, investment certificates, securities, or other obligations or evidences of indebtedness, shall be guilty of a felony.

Any person convicted for violation of section 44-3,119 or 44-3,120 shall be guilty of a Class IV felony.

Any corporation convicted for violation of section 44-3,120 shall be punished by a fine of not more than ten thousand dollars.

If any insurance company or association is found in possession of stocks, bonds, debentures, notes, investment certificates, securities, or other obligations or evidences of indebtedness acquired in violation of section 44-3,119 or if any of its officers, directors, members, or attorneys in fact have been convicted under section 44-3,119, such company or association may be subject to suspension of its certificate of authority by the Director of Insurance. Nothing in this section shall be construed to prevent the Director of Insurance from proceeding against such insurance company or association in the manner authorized and directed by the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act.

The Department of Insurance shall remit all money collected as a fine or penalty to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

When any person insured under an automobile liability policy is involved in an accident in which the license of the operator of another motor vehicle is suspended pursuant to section 60-507 because the operator failed to provide proof of financial responsibility and there is a reasonable possibility of judgment being rendered against such operator, the insurance carrier covering the insured person shall not surcharge any of the automobile coverages in the insured party's current policy or any subsequent renewal policy for any loss which was sustained in such accident by the insured person and covered under such person's automobile liability policy.

A provision in an automobile liability policy or endorsement which is effective in this state and which grants the insurer the right of subrogation for payment of benefits under the medical payments coverage portion of the policy shall be valid and enforceable, except that if the claimant receives less than actual economic loss from all parties liable for the bodily injuries, subrogation of medical payments shall be allowed in the same proportion that the medical expenses bear to the total economic loss. For purposes of this section, it shall be conclusively presumed that any settlement or judgment which is less than the policy limits of any applicable liability insurance coverage constitutes complete recovery of actual economic loss.

The Legislature recognizes the increasing number of proposals to mandate or require the offering of health care coverages or services by insurance or otherwise, health care service contractors, and health maintenance organizations as a component of insurance policies or employee welfare benefit plans. Improved access to health care services by segments of the population which desire such services can provide beneficial social and health consequences which may be in the public interest.

The cost ramifications of expanding health care coverages and services are a growing concern. The structures of such coverages or services and the steps taken to create incentives to provide cost-effective services or to take advantage of cost-offsetting features of services can significantly influence the cost impact of mandating particular coverages and services.

For purposes of sections 44-3,129 to 44-3,131, health care coverages or services shall mean any services rendered for a fee which are included in the furnishing to any individual of medical care, or other services incident to the furnishing of such care, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing, or healing human illness or injury.

No legislative proposal to mandate or require the offering of health care coverages or services shall apply to any insurer unless the proposal applies equally to employee welfare benefit plans described in 29 U.S.C. 1001 et seq.

(1) Any person acting without malice, fraudulent intent, or bad faith shall be immune from any civil liability by virtue of filing reports or furnishing other information required by Chapter 44 or required by the Director of Insurance under the authority granted in Chapter 44.

(2) The Director of Insurance or any employee of the Department of Insurance acting without malice, fraudulent intent, or bad faith shall be immune from any civil liability by virtue of the publication of any report or bulletin related to the official activities of the Department of Insurance.

(3) This section shall not abrogate or modify in any way any common-law or statutory privilege or immunity.

As used in sections 44-3,134 to 44-3,142, unless the context otherwise requires:

(1) Authorized agency shall mean the Nebraska State Patrol, a local governmental police department, a county sheriff's office, a county attorney, a municipal attorney, a United States district attorney, a duly constituted criminal investigative agency of the United States Government, and the office of the Nebraska Attorney General;

(2) Insurer shall mean any insurance company, adjustor, or agent; and

(3) Relevant shall mean having a tendency to make the existence of any information that is of consequence to an investigation of motor vehicle theft or motor vehicle insurance fraud or a determination of such issue more probable or less probable than it would be without such information.

Upon written request to an insurer by an authorized agency, an insurer or person acting on behalf of the insurer shall release to a requesting authorized agency any or all relevant information relating to any specific motor vehicle theft or motor vehicle insurance fraud which the insurer may possess. Relevant information may include, but shall not be limited to:

(1) Insurance policy information relevant to the motor vehicle theft or motor vehicle insurance fraud under investigation, including any application for such a policy;

(2) Policy premium records;

(3) History of previous claims made by the insured;

(4) Information relating to the investigation of the motor vehicle theft or motor vehicle insurance fraud, including statements of any person, proof of loss, and notice of loss; and

(5) Any other relevant evidence or information which the authorized agency reasonably believes is important.

When an insurer knows the identity of a person whom the insurer has probable cause to believe committed a criminal or fraudulent act relating to a motor vehicle theft or a motor vehicle insurance claim or has knowledge of such a criminal or fraudulent act which the insurer reasonably believes has not been reported to an authorized agency and the suspected person is insured by the insurer, then for the purpose of notification and investigation the insurer or person acting on behalf of the insurer may notify, in writing, an authorized agency of such knowledge or reasonable belief and provide any additional relevant information in accordance with section 44-3,135.

For purposes of sections 44-3,134 to 44-3,142, when an insurer provides any authorized agency with notice pursuant to section 44-3,136, such notice shall be deemed sufficient for all authorized agencies.

The authorized agency which receives information pursuant to sections 44-3,134 to 44-3,142 may release or provide such information to any other authorized agency.

Any insurer which provides information to an authorized agency pursuant to sections 44-3,134 to 44-3,142 shall have the right to request and receive relevant information from such authorized agency. The authorized agency shall provide the requested relevant information to the insurer or agent authorized by the insurer not more than thirty days after the completion of the agency's investigation.

It shall be unlawful for any insurer, any person acting on behalf of the insurer, or an authorized agency to make any relevant information received or released under sections 44-3,134 to 44-3,142 a public record except in a criminal or civil proceeding.

Any insurer, any person acting on behalf of the insurer, an authorized agency, or any of their respective employees, who releases relevant information under sections 44-3,134 to 44-3,142 with reasonable cause to believe the truth of such information, shall be immune from any civil or criminal liability for releasing such information.

Any person violating any provision of sections 44-3,134 to 44-3,142 shall be guilty of a Class IV misdemeanor.

(1) Any insurance company authorized to do business in this state shall pay interest on any proceeds due on a life insurance policy if:

(a) The insured was a resident of this state on the date of death;

(b) The date of death was on or after June 6, 1991;

(c) The beneficiary elects in writing to receive the proceeds in a lump-sum payment; and

(d) The proceeds are not paid to the beneficiary within thirty days of receipt of proof of death of the insured by the insurance company.

(2) Interest shall accrue from the date of receipt of proof of death to the date of payment at the rate calculated pursuant to section 45-103 in effect on January 1 of the calendar year in which occurs the date of receipt of proof of death. For purposes of this section, date of payment shall include the date of the postmark stamped on an envelope, properly addressed and postage prepaid, containing the payment.

(3) If an action is commenced to recover the proceeds, this section shall not require the payment of interest for any period of time for which interest is awarded pursuant to sections 45-103 to 45-103.04.

(4) A violation of this section shall be an unfair claims settlement practice subject to the Unfair Insurance Claims Settlement Practices Act.

For purposes of sections 44-3,144 to 44-3,150:

(1) Authorized attorney has the same meaning as in section 43-512;

(2) Child means an individual to whom or on whose behalf a legal duty of support is owed by an obligor;

(3) Department means the Department of Health and Human Services;

(4) Employer means an individual, a firm, a partnership, a corporation, an association, a union, a political subdivision, a state agency, or any agent thereof who pays income to an obligor on a periodic basis and has or provides health care coverage to the obligor-employee;

(5) Health care coverage means a health benefit plan or combination of plans, including fee for service, health maintenance organization, preferred provider organization, and other types of coverage available to either party, under which medical services could be provided to dependent children, that provide medical care or benefits;

(6) Insurer means an insurer as defined in section 44-103 offering a group health plan as defined in 29 U.S.C. 1167, as such section existed on January 1, 2002;

(7) Medical support means the provision of health care coverage, contribution to the cost of health care coverage, contribution to expenses associated with the birth of a child, other uninsured medical expenses of a child, or any combination thereof;

(8) Medical assistance program means the program established pursuant to the Medical Assistance Act;

(9) National medical support notice means a uniform administrative notice issued by the county attorney, authorized attorney, or department to enforce the medical support provisions of a support order;

(10) Obligee has the same meaning as in section 43-3341;

(11) Obligor has the same meaning as in section 43-3341;

(12) Plan administrator means the person or entity that administers health care coverage for an employer;

(13) Qualified medical child support order means an order that meets the requirements of 29 U.S.C. 1169, as such section existed on January 1, 2002; and

(14) Uninsured medical expenses means the reasonable and necessary health-related expenses that are not paid by health care coverage.

An insurer shall not deny enrollment of a child under the health care coverage of the obligor on the ground that:

(1) The child was born out of wedlock;

(2) The child is not claimed as a dependent on the obligor's federal income tax return; or

(3) The child does not reside with the obligor or in the insurer's service area.

(1) An insurer shall, in any case in which an obligor is required by a court or administrative order to provide health care coverage for a child and the obligor is eligible for family health care coverage through the insurer:

(a) Permit an obligor to enroll under such health care coverage any such child who is otherwise eligible for such coverage without regard to any enrollment season restriction;

(b) If an obligor is covered but fails to make application to obtain coverage for such child, enroll such child under such health care coverage upon application by (i) the obligee without regard to any enrollment season restriction, (ii) in any case in which services are provided under Title IV-D of the federal Social Security Act, as such act existed on January 1, 2002, the county attorney or authorized attorney without regard to any enrollment season restriction, or (iii) in any case in which services are not provided under Title IV-D of the federal Social Security Act, as such act existed on January 1, 2002, the department without regard to any enrollment season restriction; and

(c) Not cancel or eliminate health care coverage for any such child unless the insurer is provided satisfactory written evidence that (i) such court or administrative order is no longer in effect or (ii) the child is or will be enrolled in comparable health care coverage through another insurer which will take effect not later than the effective date of such cancellation or elimination.

(2) An employer doing business in this state shall, in any case in which an obligor is required by a court or administrative order to provide health care coverage for a child and the obligor is eligible for family health care coverage through the employer:

(a) Permit an obligor to enroll under such health care coverage any such child who is otherwise eligible for such coverage without regard to any enrollment season restriction;

(b) If an obligor is covered but fails to make application to obtain coverage for such child, enroll such child under such health care coverage upon application by (i) the obligee without regard to any enrollment season restriction, (ii) in any case in which services are provided under Title IV-D of the federal Social Security Act, as such act existed on January 1, 2002, the county attorney or authorized attorney without regard to any enrollment season restriction, or (iii) in any case in which services are not provided under Title IV-D of the federal Social Security Act, as such act existed on January 1, 2002, the department without regard to any enrollment season restriction; and

(c) Not cancel or eliminate health care coverage for any such child unless (i) the employer is provided satisfactory written evidence that (A) such court or administrative order is no longer in effect or (B) the child is or will be enrolled in comparable health care coverage which will take effect not later than the effective date of such cancellation or elimination or (ii) the employer has eliminated family health care coverage for all of its employees.

Upon enrollment pursuant to this subsection, premiums shall be deducted from the obligor's compensation and remitted directly to the insurer. The amount withheld shall not exceed the maximum amount permitted to be withheld under section 303(b) of the federal Consumer Credit Protection Act, as such act existed on January 1, 2002. Amounts withheld pursuant to the Income Withholding for Child Support Act shall have priority over amounts withheld pursuant to this subsection. An employer receiving a national medical support notice shall transmit the notice to the plan administrator within twenty business days after receipt of the notice from the county attorney, authorized attorney, or department.

(3) If an obligor is ordered to provide health care coverage for a child in any case in which services are provided under Title IV-D of the federal Social Security Act, as such act existed on January 1, 2002, the county attorney, authorized attorney, or department shall send a national medical support notice to any employer of the obligor within two business days after receipt of information regarding employment under the New Hire Reporting Act. A national medical support notice sent by the county attorney, authorized attorney, or department to an employer pursuant to this section shall have the same effect as an enrollment application signed by the obligor. The county attorney, authorized attorney, or department shall send a copy of the national medical support notice to the obligor by mail at his or her last-known address stating:

(a) The court or administrative order upon which the enforcement action is being taken;

(b) That if the county attorney, authorized attorney, or department sends a national medical support notice to an employer, the county attorney, authorized attorney, or department will also direct the employer to withhold from the employee's compensation the employee's share of the premium for health care coverage; and

(c) That within fifteen days after receiving the notice the obligor may request a hearing to contest the enforcement action based upon evidence that (i) there is an error in the identity of the obligor, (ii) he or she has enrolled the child in an insurance plan providing coverage required by the order, (iii) the parties have stipulated to, and the court or administrative order specifically provides for, an alternative to employer-based health care coverage, or (iv) evidence that the premium cost to the obligor exceeds the amount stated in subsection (2) of this section or is otherwise unreasonable.

If a hearing is requested, the department shall hold the hearing within fifteen days after the request, and the department shall notify the obligor of its decision within fifteen days after the date the hearing is held. A national medical support notice sent by the county attorney, authorized attorney, or department to the obligor's employer shall not be held in abeyance pending the outcome of the hearing.

(4) The remedy provided in this section shall be in addition to and not in substitution for any other remedy and shall apply without regard to when the order was issued.

(5) An insurer or employer shall, upon request by the county attorney, authorized attorney, or department, provide the county attorney, authorized attorney, or department with the following information regarding an obligor required by a court or administrative order to provide health care coverage for a child: (a) The social security number; (b) the address; (c) whether the obligor has health care coverage and, if so, the policy name and number and the names of the persons covered; and (d) the cost to the obligor of enrolling.

(6) Upon receipt of a copy of a court or administrative order requiring an obligor to provide health care coverage for a child, an insurer or employer shall provide the obligee upon written request the information necessary to file an application pursuant to this section.

(7) A completed national medical support notice issued by the county attorney, authorized attorney, or department that complies with this section is a qualified medical child support order for the purposes of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. 1169(a), as such section existed on January 1, 2002.

(8) Upon the termination of employment of an obligor subject to this section, the employer shall promptly notify the county attorney, authorized attorney, or department of the termination of employment in the same manner as required for income withholding cases in accordance with subdivision (6) of section 43-1723.

(9) When there is no longer a current child support order in effect for an obligor subject to this section, the county attorney, authorized attorney, or department shall promptly notify the employer that the order is no longer in effect.

The department shall adopt and promulgate rules and regulations to carry out section 44-3,146.

An insurer may not impose requirements on the department when the department has been assigned the rights of an individual who is eligible for medical assistance pursuant to the medical assistance program and who is covered for health benefits from the insurer that are different from requirements applicable to an agent or assignee of any other individual so covered.

An insurer shall, in any case in which a child has health care coverage through the insurer of the obligor:

(1) Provide such information to the obligor as may be necessary for the child to obtain benefits through such coverage;

(2) Permit the obligor or the provider, with the obligor's approval, to submit claims for covered services without the approval of the obligor; and

(3) Make payment on claims submitted in accordance with subdivision (2) of this section directly to such obligor, the provider, or the department pursuant to section 68-916.

When enrolling an individual or making any payment for benefits to an individual or on an individual's behalf, an insurer shall not take into account that the individual is eligible for or is provided medical assistance pursuant to the medical assistance program or a medical assistance plan of another state.

An association which has a constitution and bylaws and has been organized in this state for not less than two years and is maintained in good faith for purposes other than that of obtaining insurance may obtain individual workers' compensation insurance policies through an insurance producer licensed under the Insurance Producers Licensing Act for any or all of the voting members of the association covering the liability to which each individual employer may be subject under the Nebraska Workers' Compensation Act from an insurer authorized to transact the business of workers' compensation insurance in this state.

An association which obtains insurance policies in compliance with sections 44-3,151 to 44-3,155 is not an insurer and is not transacting the business of insurance under the laws of this state.

Under insurance policies obtained pursuant to section 44-3,151, an association is entitled to negotiate with the insurer regarding policy terms, including premiums, discounts, dividends, commissions, fees, and costs. If any policy provides for any deductible for any benefits payable under the Nebraska Workers' Compensation Act, it shall be in conformance with section 48-146.03. The insurer shall only enter into arrangements which allow it to report data compatible with the uniform classification system and with experience rating as required by subsections (1) and (2) of section 44-7524.

An association may apportion any discount or dividend received on insurance policies obtained pursuant to section 44-3,151 among the covered members according to a formula adopted in the plan of operation of the association.

An association shall adopt and maintain a plan of operation that includes the methods for administering insurance policies obtained pursuant to section 44-3,151, including the payment of premiums, the distribution of discounts, and the methods for providing risk management.

Any person who violates sections 44-3,151 to 44-3,155 is guilty of a Class II misdemeanor.

If the laws of any other state specify that a policy issued for delivery in that state need not provide the coverages or services mandated by that state to certificate holders who are not residents or not employed in that state, and if such a policy issued for delivery in that state does not provide the coverages or services mandated by that state to certificate holders who are not residents or not employed in that state, then the coverages or services mandated by sections 44-769 to 44-7,101 shall apply to a certificate issued to certificate holders who are residents of or employed in this state.

(1) For purposes of this section:

(a) Assigned risk employer means a Nebraska employer that is in good faith entitled to, but is unable to obtain, workers' compensation insurance through ordinary methods; and

(b) Director means the Director of Insurance.

(2)(a) The director shall enter into an agreement with one or more workers' compensation insurers to provide workers' compensation insurance to assigned risk employers. In selecting an insurer to become an assigned risk insurer, the director shall consider the cost of coverage to assigned risk employers, the loss control and claims handling services available from the workers' compensation insurer, the financial condition of the workers' compensation insurer, and any other relevant factors. An agreement entered into under this subsection may not exceed five years.

(b) If the director determines that the cost of workers' compensation insurance premiums for an insurer to provide assigned risk coverage pursuant to such an agreement would be unreasonably high, the director may enter into an agreement in which the assigned risk insurer covers a portion of the losses incurred by the assigned risk employer. Any agreement that involves an average rate level of less than two and one-half times the prospective loss costs approved for an advisory organization pursuant to section 44-7511 shall not be considered unreasonably high for the purposes of this section. Pursuant to any such agreement, remaining losses shall be assessed against all workers' compensation insurers writing workers' compensation insurance in this state and risk management pools created under the Intergovernmental Risk Management Act based on their workers' compensation premiums written in this state or contributions made to risk management pools. Assigned risk premiums shall be excluded from the basis for such assessments.

(c) If the assigned risk system described in subdivisions (2)(a) and (b) of this section ceases to be viable because no qualified insurer is willing to provide workers' compensation coverage at an average rate level of two and one-half times the prospective loss costs approved for an advisory organization pursuant to section 44-7511 without also requiring substantial sharing of losses with all other workers' compensation insurers writing workers' compensation insurance in this state and risk management pools created under the Intergovernmental Risk Management Act, then the director may, after consultation with insurers authorized to issue workers' compensation insurance policies in this state, create a reasonable alternative assigned risk system involving the sharing of premiums and losses for assigned risk employers among all such workers' compensation insurers writing workers' compensation insurance in this state and such risk management pools. If established, such alternative assigned risk system shall not utilize an average rate level of less than two and one-half times the prospective loss costs approved for an advisory organization pursuant to section 44-7511.

(3) The director may adopt and promulgate rules and regulations to carry out this section.

(4) An employer shall not be considered to be in good faith entitled to be covered by workers' compensation insurance under this section if:

(a) The employer is required to establish a safety committee pursuant to sections 48-443 to 48-445 and is not in compliance with such sections;

(b) The employer is in default on workers' compensation premiums;

(c) The employer has failed to reimburse an insurer for amounts to be repaid pursuant to workers' compensation insurance written on a policy with a deductible;

(d) The employer has failed to provide an insurer reasonable access to books and records necessary for a premium audit;

(e) The employer has defrauded or attempted to defraud an insurer; or

(f) The employer is found to have been owned or controlled by persons who owned or controlled a prior employer that is or would be ineligible for coverage pursuant to subdivisions (4)(b) through (e) of this section.

(1) No health plan and no self-funded employee benefit plan to the extent not preempted by federal law shall assert any contractual rights to the proceeds of any resources purchased by or on behalf of the policyholder, subscriber, certificate holder, or enrollee, including medical payments coverage under a motor vehicle insurance policy, uninsured or underinsured motorist coverage, accident or disability income coverage, specific disease or illness coverage, or hospital indemnity or other fixed indemnity coverage.

(2) This section shall not (a) affect the coordination of benefits between health plans or self-funded employee benefit plans, (b) prevent the coordination of benefits between a health plan or self-funded employee benefit plan and medical payments coverage under a motor vehicle insurance policy if such coordination of benefits applies medical payments coverage to deductible, copayment, and coinsurance amounts after discounts provided through the health plan or self-funded employee benefit plan, or (c) prevent the application of the medical payments coverage under a motor vehicle insurance policy to items not covered by a health plan or self-funded employee benefit plan.

(3) For purposes of this section, health plan means an individual or group sickness and accident insurance policy or subscriber contract delivered, issued for delivery, or renewed in this state except for (a) policies that provide coverage for specified disease or other limited-benefit coverage or hospital indemnity or other fixed indemnity coverage or (b) self-funded employee benefit plans to the extent preempted by federal law.

In ascertaining the condition of a domestic stock property or casualty insurance company, there shall be allowed as assets only such investments, cash, and accounts as are authorized by the laws of this state at the date of the examination. In ascertaining its liabilities, there shall be charged in addition to the capital stock, all outstanding claims, and a sum equal to one hundred percent of the unearned premiums on the policies in force, after deducting credit for reinsurance authorized by sections 44-416.05 to 44-416.10, calculated on the gross sum without any deductions on any account, charged to the policyholder on each respective risk from the date of the issuance of the policy. In ascertaining the condition of a domestic mutual property or casualty insurance company, other than a company licensed solely to write the line of insurance specified in subdivision (4) of section 44-201, there shall be allowed as assets only such investments, cash, and accounts as are authorized by the laws of this state at the date of examination. In ascertaining its liabilities, there shall be charged all outstanding claims and a reserve in an amount equal to one hundred percent of the total unearned premium on all their policies in force. If the department finds this section to be impractical in ascertaining the condition of certain kinds of insurance companies, the department shall adopt and promulgate such rules and regulations as it deems proper, efficient, and consistent with law. Such rules and regulations shall give due regard to the statutes, rules, regulations, and established industry practices which may be used in other states or which are approved by the National Association of Insurance Commissioners.

Loss reserves for domestic property and casualty insurance companies shall be set at the present value of estimated future payments if (1) a complete settlement between the claimant and the insured or insurer has been agreed upon, (2) all payments due the claimant have not yet been made, and (3) the payments are structured as an annuity.

Any domestic life insurance company, including, for the purposes of sections 44-402.01 to 44-402.05, all domestic fraternal benefit societies which operate on a legal reserve basis, may, after adoption of a resolution by its board of directors and upon approval of the Director of Insurance, establish one or more separate accounts and may allocate thereto amounts, including without limitation proceeds applied under optional modes of settlement or under dividend options, to provide for life insurance and benefits incidental thereto, payable in fixed or variable amounts or both, and may, upon approval of the director, guarantee the value of the assets allocated to a separate account.

The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against such account, without regard to other income, gains or losses of such company.

(1) Except as may be provided with respect to reserves for guaranteed benefits, amounts allocated to any separate account and accumulations thereon may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies and the investments in such separate account or accounts shall not be taken into account in applying investment limitations otherwise applicable to investments of such company.

(2) No investment in such separate accounts or in the domestic life insurance company's general investment account shall be transferred by sale, exchange, substitution, or otherwise from one account to another unless the director approves such transfer or unless the director has not disapproved the application for transfer within thirty days from filing. The application to transfer investments shall be on a form provided by the director.

Amounts allocated to a separate account in the exercise of the power granted by sections 44-402.01 to 44-402.05 shall be owned by the company, and the company shall not be, nor hold itself out to be, a trustee with respect to such amounts. If and to the extent so provided under the applicable contracts, that portion of the assets of any such separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the company may conduct.

Notwithstanding any other provision of law, the Director of Insurance shall have the authority to adopt such reasonable rules and regulations as are appropriate and necessary to regulate the issuance and sale of variable life contracts. Such rules and regulations may relate to, but shall not be limited to, qualifications of foreign and domestic insurance companies and agents, required and prohibited policy provisions, the inapplicability of certain sections of Chapter 44, to variable life contracts, establishment and maintenance of separate accounts, filing of contracts and required reports, and examination of records. Any provision in a variable life contract relating to grace period, loans, reinstatement, and nonforfeiture shall be appropriate to such contract, and reserve liability for variable life contracts shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.

This section shall apply to only those policies and contracts issued prior to the operative date defined in section 44-407.07 (the Standard Nonforfeiture Law for Life Insurance). All such valuations made by the Department of Insurance, or by its authority, shall be according to the standard of valuation adopted by the company, which standard shall be stated in its annual report to the department. Such standard of valuation, whether on the net level premium, preliminary term, any modified preliminary term, or select and ultimate reserve basis, for all such policies issued after July 17, 1913, shall be according to the American Experience or Actuaries' Table of Mortality, with not less than three and not more than four percent compound interest. When the preliminary term basis is used it shall not exceed one year. Insurance against total and permanent mental or physical disability resulting from accident or disease, or against accidental death, combined with a policy of life insurance, shall be valued on the basis of the mean reserve, being one-half of the additional annual premium charged therefor. Except as otherwise provided in subsection (3) of section 44-8907 for all annuities and pure endowments purchased on or after the operative date of such subsection under group annuity and pure endowment contracts, the legal minimum standard for the valuation of annuities shall be McClintock's Table of Mortality Among Annuitants, or the American Experience Table of Mortality, with compound interest at three and one-half percent per annum for individual annuities and five percent per annum for group annuities, but annuities deferred ten or more years, and written in connection with life or term insurance, shall be valued on the same mortality table from which the consideration or premiums were computed, with compound interest not higher than three and one-half percent per annum. The legal standard for the valuation of industrial policies shall be the American Experience Table of Mortality, with compound interest at not less than three nor more than three and one-half percent per annum, except that any life insurance company may voluntarily value its industrial policies written on the weekly payment plan according to the Standard Industrial Mortality Table or the Substandard Industrial Mortality Table. Reserves for all such policies and contracts may be calculated, at the option of the company, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by this section.

(1) In the case of those policies issued prior to the operative date defined in section 44-407.07 (the Standard Nonforfeiture Law), the loan value referred to in provision (8) of section 44-502 shall be the reserve at the end of the current policy year on the policy and on any dividend additions thereto, less a sum not more than two and one-half percent of the amount insured by the policy and of any undivided additions thereto. The policy shall specify the mortality table and the rate of interest adopted for computing such reserve and may provide that such loan may be deferred for not exceeding six months after the application therefor is made.

(2) In the case of policies issued on or after the operative date defined in section 44-407.07 (the Standard Nonforfeiture Law), the loan value referred to in provision (8) of section 44-502 shall be the cash surrender value at the end of the current policy year as required by sections 44-407 to 44-407.09. The company shall reserve the right to defer such loan, except when made to pay premiums, for six months after application therefor is made.

(3) This section shall not apply to term insurances.

This section shall apply only to policies of life insurance issued prior to the operative date defined in section 44-407.07 (the Standard Nonforfeiture Law). The nonforfeiture benefit referred to in provision (9) of section 44-502 shall be available to the owner of the policy, in event of default in premium payments after premiums shall have been paid for three years, and shall be a stipulated form of insurance, the net value of which shall be at least equal to the reserve, at the date of default on the policy, and on any dividend additions thereto, less a sum not more than two and one-half percent of the amount insured by the policy, and of any existing dividend additions thereto, and less any existing indebtedness to the company on the policy. The policy shall specify the mortality table and rate of interest adopted for computing such reserves and shall stipulate that it may be surrendered to the company at its home office within one month from date of default, for a specified cash value at least equal to the sum which would otherwise be available for the purchase of insurance as aforesaid, and may provide that the company may defer payment for not more than six months after the application therefor is made.

Sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26 shall be known as the Standard Nonforfeiture Law for Life Insurance.

In the case of policies issued on or after the operative date of this section, as defined in section 44-407.07, no policy of life insurance, except as stated in section 44-407.06, shall be delivered or issued for delivery in this state unless it shall contain in substance the following provisions, or corresponding provisions which in the opinion of the Department of Insurance are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this section and are essentially in compliance with section 44-407.26: (a) That, in the event of default in any premium payment, the company will grant, upon proper request not later than sixty days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than sixty days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. (b) That, upon surrender of the policy within sixty days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the company will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified. (c) That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than sixty days after the due date of the premium in default. (d) That, if the policy shall have become paid up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance, or the fifth policy anniversary in the case of industrial insurance, the company will pay, upon surrender of the policy within thirty days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified. (e) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first twenty policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy. (f) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The company shall reserve the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.

Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by section 44-407.01, shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of (a) the then present value of the adjusted premiums as defined in sections 44-407.04, 44-407.08, 44-407.09, and 44-407.24, corresponding to premiums which would have fallen due on and after such anniversary, and (b) the amount of any indebtedness to the company on the policy. For any policy issued on or after the operative date of section 44-407.24 as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision.

For any family policy issued on or after the operative date of section 44-407.24 as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one, the cash surrender value referred to in the first paragraph of this section shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.

Any cash surrender value available within thirty days after any policy anniversary under any policy paid up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by section 44-407.01, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the company on the policy.

Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26 in the absence of the condition that premiums shall have been paid for at least a specified period.

(a) Except as provided in subsection (c) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of the policy, of all such adjusted premiums shall be equal to the sum of (i) the then present value of the future guaranteed benefits provided for by the policy, (ii) two percent of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy, (iii) forty percent of the adjusted premium for the first policy year, and (iv) twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less; Provided, that in applying the percentages specified in (iii) and (iv) above, no adjusted premium shall be deemed to exceed four percent of the amount of insurance or uniform amount equivalent thereto. The date of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined.

(b) In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this section shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy; Provided, that in the case of a policy providing a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten were the amount provided by such policy at age ten.

(c) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to (1) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (2) the adjusted premiums for such term insurance, the foregoing items (1) and (2) being calculated separately and as specified in subsections (a) and (b) of this section except that, for the purposes of (ii), (iii), and (iv) of subsection (a), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (2) shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in subdivision (1) of this subsection.

(d) Except as provided in sections 44-407.08 and 44-407.09, all adjusted premiums and present values referred to in sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26, shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table and such calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table; Provided, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than three years younger than the actual age of the insured. All calculations shall be made on the basis of the rate of interest, not exceeding three and one-half percent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; Provided, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred and thirty percent of the rates of mortality according to such applicable table; and provided further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the Department of Insurance.

This section shall not apply to policies issued on or after the operative date of section 44-407.24 as defined therein.

Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in sections 44-407.02 to 44-407.04, 44-407.08, 44-407.09, and 44-407.24, may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide such additions. Notwithstanding the provisions of section 44-407.02, additional benefits payable (a) in the event of death or dismemberment by accident or accidental means, (b) in the event of total and permanent disability, (c) as reversionary annuity or deferred reversionary annuity benefits, (d) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26 would not apply, (e) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child's age is twenty-six, is uniform in amount after the child's age is one, and has not become paid up by reason of the death of a parent of the child, and (f) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by said sections, and no such additional benefits shall be included in any paid-up nonforfeiture benefits unless specifically included by the terms of the policy.

Sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26 shall not apply to any (1) reinsurance, (2) group insurance, (3) pure endowment, (4) annuity or reversionary annuity contract, (5) term policy of uniform amount which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy, (6) term policy of decreasing amount which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in sections 44-407.04, 44-407.08, 44-407.09, and 44-407.24, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance, and for a term of twenty years or less expiring before age seventy-one, for which uniform premiums are payable during the entire term of the policy, (7) policy which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in sections 44-407.02 to 44-407.04, 44-407.08, 44-407.09, and 44-407.24, exceeds two and one-half percent of the amount of insurance at the beginning of the same policy year, or (8) policy which shall be delivered outside this state through an agent or other representative of the company issuing the policy.

For purposes of determining the applicability of sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26, the age of expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.

After August 27, 1943, any company may file with the Department of Insurance a written notice of its election to comply with the provisions of sections 44-407 to 44-407.07 after a specified date before January 1, 1950. After the filing of such notice, then upon such specified date (which shall be the operative date for such company) said sections shall become operative with respect to the policies thereafter issued by such company. If a company makes no such election, the operative date of said sections for such company shall be January 1, 1950.

This section shall not apply to ordinary policies issued on or after the operative date of section 44-407.24 as defined therein.

In the case of ordinary policies issued on or after the operative date of this section as defined herein, all adjusted premiums and present values referred to in sections 44-407 to 44-407.09, shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; such rate of interest shall not exceed three and one-half percent per annum except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after September 2, 1973, and prior to August 24, 1979, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after August 24, 1979; Provided, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six years younger than the actual age of the insured; provided further, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table; and provided further, that for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the Department of Insurance.

After September 28, 1959, any company may file with the Department of Insurance a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1966. After the filing of such notice, then upon such specified date, which shall be the operative date of this section for such company, this section shall become operative with respect to the ordinary policies thereafter issued by such company. If a company makes no such election, the operative date of this section for such company shall be January 1, 1966.

This section shall not apply to industrial policies issued on or after the operative date of section 44-407.24 as defined therein.

In the case of industrial policies issued on or after the operative date of this section, all adjusted premiums and present values referred to in sections 44-407 to 44-407.09 and 44-407.24 to 44-407.26, shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the rate of interest, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; such rate of interest shall not exceed three and one-half percent per annum except that a rate of interest not exceeding four percent per annum may be used for policies issued on or after September 2, 1973, and prior to August 24, 1979, and a rate of interest not exceeding five and one-half percent per annum may be used for policies issued on or after August 24, 1979; Provided, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table; and provided further, that for insurance issued on a substandard basis, the calculations of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the Department of Insurance. After September 18, 1965, any company may file with the Department of Insurance a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1968. After the filing of such notice, then upon such specified date, which shall be the operative date of this section for such company, this section shall become operative with respect to the industrial policies thereafter issued by such company. If a company makes no such election, the operative date of this section for such company shall be January 1, 1968.

(1) Sections 44-407.10 to 44-407.23 shall be known as the Standard Nonforfeiture Law for Individual Deferred Annuities.

(2) Such sections shall not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership, limited liability company, or sole proprietorship, by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code, premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced, or reversionary annuity, nor to any contract which shall be delivered outside this state through an agent or other representative of the company issuing the contract.

In the case of contracts issued on or after the operative date of this act, no contract of annuity, except as stated in subsection (2) of section 44-407.10, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions which in the opinion of the Department of Insurance are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:

(1) That, upon cessation of payment of considerations under a contract or upon the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of such value as is specified in sections 44-407.16 to 44-407.19 and 44-407.21;

(2) If a contract provides for a lump-sum settlement at maturity, or at any other time, that, upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of such amount as is specified in sections 44-407.16, 44-407.17, 44-407.19, and 44-407.21. The company shall reserve the right to defer the payment of such cash surrender benefit for a period not to exceed six months after demand therefor with surrender of the contract after making written request and receiving written approval of the director. The request shall address the necessity and equitability to all policyholders of the deferral;

(3) A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender, or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of such benefits; and

(4) A statement that any paid-up annuity, cash surrender, or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which such benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract, or any prior withdrawals from or partial surrenders of the contract.

Notwithstanding the requirements of section 44-407.11, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to such period would be less than twenty dollars monthly, the company may at its option terminate such contract by payment in cash of the then present value of such portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by such payment shall be relieved of any further obligation under such contract.

The minimum values as specified in sections 44-407.16 to 44-407.19 and 44-407.21 of any paid-up annuity, cash surrender, or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in section 44-407.14.

(1)(a) The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at rates of interest as set forth in subsection (2) of this section of the net considerations paid prior to such time, decreased by the sum of subdivisions (1)(a)(i) through (iv) of this section:

(i) Any prior withdrawals from or partial surrenders of the contract, accumulated at rates of interest as set forth in subsection (2) of this section;

(ii) An annual contract charge of fifty dollars, accumulated at rates of interest as set forth in subsection (2) of this section;

(iii) Any premium tax paid by the company for the contract, accumulated at rates of interest as set forth in subsection (2) of this section; and

(iv) The amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract.

(b) The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one-half percent of the gross consideration credited to the contract during that contract year.

(2) The interest rate used in determining the minimum nonforfeiture amount shall be an annual rate of interest determined as the lesser of three percent per annum and the following, which shall be specified in the contract if the interest rate will be reset:

(a) The five-year Constant Maturity Treasury Rate reported by the Federal Reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent, specified in the contract no longer than fifteen months prior to the contract issue date or redetermination date under subdivision (2)(d) of this section;

(b) Reduced by one hundred twenty-five basis points;

(c) The resulting interest rate shall not be less than fifteen basis points; and

(d) The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis, and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five-year Constant Maturity Treasury Rate to be used at each redetermination date.

(3) During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in subdivision (2)(b) of this section by up to an additional one hundred basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The director may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the director, the director may disallow or limit the additional reduction.

(4) The director may adopt rules to implement the provisions of subsection (3) of this section and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the director determines adjustments are justified.

Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. Such present value shall be computed using the mortality table, if any, and the interest rates specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.

For contracts which provide cash surrender benefits, such cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit which would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, such present value being calculated on the basis of an interest rate not more than one percent higher than the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under such contracts shall be at least equal to the cash surrender benefit.

For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, such present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine such maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts which do not provide any death benefits prior to the commencement of any annuity payments, such present values shall be calculated on the basis of such interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. In no event shall the present value of paid-up annuity benefit be less than the minimum nonforfeiture amount at that time.

For the purpose of determining the benefits calculated under sections 44-407.17 and 44-407.18, in the case of annuity contracts under which an election may be made to have annuity payments commence at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.

Any contract which does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that such benefits are not provided.

Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.

For any contract which provides, within the same contract by rider or supplemental contract provision, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding the provisions of sections 44-407.16 to 44-407.19 and 44-407.21, additional benefits payable (1) in the event of total and permanent disability, (2) as reversionary annuity or deferred reversionary annuity benefits, or (3) as other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for all such additional benefits, shall be disregarded in ascertaining the minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits that may be required by sections 44-407.10 to 44-407.22. The inclusion of such additional benefits shall not be required in any paid-up benefits, unless such additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity, cash surrender and death benefits.

(1) After August 24, 1979, any company may file with the Department of Insurance a written notice of its election to comply with the provisions of sections 44-403, 44-407.08 to 44-407.23, and 44-8907 after a specified date before the second anniversary of August 24, 1979. After the filing of such notice, such specified date shall be the operative date of this act for such company. Annuity contracts thereafter issued by such company shall comply with such sections. If a company makes no such election, the operative date of this act for such company shall be the second anniversary of August 24, 1979.

(2) After July 16, 2004, a company may elect to apply sections 44-407.08 to 44-407.23 to annuity contracts on a contract-form-by-contract-form basis before the second anniversary of July 16, 2004. In all other instances, sections 44-407.08 to 44-407.23 shall become operative with respect to annuity contracts issued by the company after the second anniversary of July 16, 2004.

(3) The director may adopt and promulgate rules and regulations to carry out sections 44-407.10 to 44-407.23.

(1) This section shall apply to all policies issued on or after the operative date of this section as defined herein. Except as provided in subsection (7) of this section, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of (a) the then present value of the future guaranteed benefits provided for by the policy; (b) one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and (c) one hundred twenty-five percent of the nonforfeiture net level premium as defined in this section. In applying the percentage specified in (c) above no nonforfeiture net level premium shall be deemed to exceed four percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years. The date of issue of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined.

(2) The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one percent per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.

(3) In the case of policies which cause on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums the future adjusted premium, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

(4) Except as otherwise provided in subsection (7) of this section, the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of (a) the sum of (i) the then present value of the then future guaranteed benefits provided for by the policy and (ii) the additional expense allowance, if any, over (b) the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

(5) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of (a) one percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (b) one hundred twenty-five percent of the increase, if positive, in the nonforfeiture net level premium.

(6) The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing (a) by (b), where (a) equals the sum of (i) the nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and (ii) the present value of the increase in future guaranteed benefits provided for by the policy; and (b) equals the present value of an annuity of one per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.

(7) Notwithstanding any other provisions of this section to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.

(8) All adjusted premiums and present values referred to in sections 44-407 to 44-409 shall for all policies of ordinary insurance be calculated on the basis of (a) the Commissioners 1980 Standard Ordinary Mortality Table or (b) at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section for policies issued in that calendar year.

At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year. Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available whether or not required by section 44-407.01, shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any. A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance. For insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on appropriate modifications of such tables. For policies issued prior to the operative date of the valuation manual designated in subsection (2) of section 44-8908, any Commissioners Standard ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the Department of Insurance for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual designated in subsection (2) of section 44-8908, the valuation manual shall provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the Department of Insurance approves by rule and regulation any commissioners standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual designated in subsection (2) of section 44-8908, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. For policies issued prior to the operative date of the valuation manual designated in subsection (2) of section 44-8908, any commissioners standard industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the Department of Insurance for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual designated in subsection (2) of section 44-8908, the valuation manual shall provide the commissioners standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the Department of Insurance approves by rule and regulation any commissioners standard industrial mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual designated in subsection (2) of section 44-8908, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.

(9) For policies issued before the operative date of the valuation manual designated in subsection (2) of section 44-8908, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred and twenty-five percent of the calendar year statutory valuation interest rate for such policy as defined in section 44-8907, rounded to the nearer one-quarter of one percent, except that the nonforfeiture interest rate shall not be less than four percent. For policies issued on and after the operative date of the valuation manual designated in subsection (2) of section 44-8908, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.

(10) Notwithstanding any other provision in sections 44-407 to 44-407.06, 44-407.08, 44-407.09, 44-407.24 to 44-407.26, and 44-8907 to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

(11) After the effective date of this section any company may file with the Department of Insurance a written notice of its election to comply with the provisions of this section after a specified date before January 1, 1989, which shall be the operative date of this section for such company. If a company makes no such election, the operative date of this section for such company shall be January 1, 1989, except that the Director of Insurance may advance the operative date of this section for such a company after investigating and finding that (a) it is in the best interests of the policyholders of such company to do so, and (b) a majority of states in which such company is doing business have adopted legislation similar to sections 44-407 to 44-407.06, 44-407.08, 44-407.09, 44-407.24 to 44-407.26, and 44-8907.

In the case of any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in sections 44-407.01 to 44-407.04, 44-407.08, 44-407.09, and 44-407.24, then:

(a) The Department of Insurance must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by sections 44-407.01 to 44-407.04, 44-407.08, 44-407.09, and 44-407.24;

(b) The Department of Insurance must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds;

(c) The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of the Standard Nonforfeiture Law for Life Insurance, as determined by regulations promulgated by the Department of Insurance;

(d) Notwithstanding any other provision in the laws of this state, any policy, contract, or certificate providing life insurance under any such plan must be affirmatively approved by the Department of Insurance before it can be marketed, issued, delivered, or used in this state.

This section, in addition to all other applicable provisions of sections 44-407 to 44-407.06, 44-407.08, 44-407.09, 44-407.24 to 44-407.26, and 44-8907, shall apply to all policies issued on or after January 1, 1985. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount which does not differ by more than two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, from the sum of (a) the greater of zero and the basic cash value specified in this section and (b) the present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy.

The basic cash value shall be equal to the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, as hereinafter defined, corresponding to premiums which would have fallen due on and after such anniversary; Provided, however, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in section 44-407.02 or 44-407.04, whichever is applicable, shall be the same as are the effects specified in section 44-407.02 or 44-407.04, whichever is applicable, on the cash surrender values defined in that section.

The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in section 44-407.04 or 44-407.24, whichever is applicable. Except as is required by the next succeeding sentence of this paragraph, such percentage (a) must be the same percentage for each policy year between the second policy anniversary and the later of (i) the fifth policy anniversary and (ii) the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years, and (b) must be such that no percentage after the later of the two policy anniversaries specified in the preceding item (a) may apply to fewer than five consecutive policy years. No basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in section 44-407.04 or 44-407.24, whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.

All adjusted premiums and present values referred to in this section shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other sections of this Standard Nonforfeiture Law for Life Insurance. The cash surrender values referred to in this section shall include any endowment benefits provided for by the policy.

Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in sections 44-407.01 to 44-407.03, 44-407.05, and 44-407.24. The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits such as those listed in section 44-407.05 shall conform with the principles of this section.

In ascertaining the condition of any life insurance company, it shall be allowed as assets only such investments, cash, and accounts as are authorized by the laws of this state or of the state or country in which it is organized at the date of examination. There shall be charged against it as liabilities in addition to the capital stock, all outstanding indebtedness of the company, and the premium reserve on policies and additions thereto in force, computed according to the tables of mortality and rate of interest prescribed in sections 44-402.01 to 44-407.09.

In ascertaining the condition of a domestic sickness and accident insurance company, it shall be allowed as assets only such investments, cash, and accounts as are authorized by the laws of this state at the date of the examination. In ascertaining its liabilities, there shall be charged, in addition to the capital stock and all outstanding claims, a sum equal to the total unearned premium on the policies in force, after deducting credit for reinsurance authorized by sections 44-416.05 to 44-416.10, calculated on the gross sum without any deductions on any account, charged to the policyholder on each respective risk from the date of the issuance of the policy.

In ascertaining the assets, liabilities and financial condition of all other insurance companies, not otherwise provided for in sections 44-401 to 44-415, the Department of Insurance shall allow as assets only such investments, cash and accounts, as are authorized by the existing laws of this state, or under the existing laws of the state or country under which such company is organized, and which investments it may approve or reject at the date of the investigation. In estimating the liabilities there shall be added, in addition to the capital stock, all outstanding claims, and a sum equal to the unearned premiums on the policies in force, calculated on the gross sum without any deductions on any account, charged to the policyholder on each respective risk from the date of the issuance of the policy. If the department finds this rule to be impracticable in ascertaining the condition of the certain kinds of insurance companies, it shall formulate such rules as it shall deem proper and efficient and consistent with law, having due regard to such rules as may be used in other states or approved by the National Association of Insurance Commissioners; Provided, in relation to the affairs of any foreign company, it may, in lieu of such examination and investigation, accept a certificate of the insurance commissioner or superintendent of such state or district as to its condition.

When the actual premium hereafter charged for an insurance by any life insurance company doing business in this state is less than the net premium for such insurance, computed according to the table of mortality and rate of interest prescribed in section 44-403, such company shall be charged as a separate liability with the value of an annuity, the amount of which shall equal the difference between such premium and the term of which, in years, shall equal the number of future annual payments due on such insurance at the date of the valuation. This section shall apply to policies and contracts issued prior to the operative date defined in section 44-407.07.

The purpose of sections 44-416.05 to 44-416.10 is to protect the interest of insureds, claimants, ceding insurers, assuming insurers, and the public generally. The Legislature hereby declares its intent is to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom they owe obligations. In furtherance of that state interest, the Legislature hereby provides a mandate that upon the insolvency of a non-United-States insurer or reinsurer that provides security to fund its United States obligations in accordance with such sections, the assets representing the security shall be maintained in the United States and claims shall be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies. The Legislature declares that the matters contained in such sections are fundamental to the business of insurance in accordance with 15 U.S.C. 1011 and 1012.

(1) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subsection (2), (3), (4), (5), (6), (7), or (8) of this section and any additional requirements contained in rules and regulations adopted and promulgated by the Director of Insurance pursuant to subsection (2) of section 44-416.09 relating to or setting forth (a) the valuation of assets or reserve credits, (b) the amount and form of security supporting reinsurance arrangements, or (c) the circumstances pursuant to which credit will be reduced or eliminated. Except as otherwise provided in section 44-224.11, credit shall be allowed under subsection (2), (3), or (4) of this section only for cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under subsection (4) or (5) of this section only if the applicable requirements of subsection (9) of this section have been satisfied.

(2) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance in this state.

(3) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the Director of Insurance as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must:

(a) File with the director evidence of its submission to this state's jurisdiction;

(b) Submit to this state's authority to examine its books and records;

(c) Be licensed to transact insurance or reinsurance in at least one state, or in the case of a United States branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one state;

(d) File annually with the director a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and

(e) Demonstrate to the satisfaction of the director that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than twenty million dollars and its accreditation has not been denied by the director within ninety days after submission of its application.

(4)(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or in the case of a United States branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this section and the assuming insurer or United States branch of an alien assuming insurer:

(i) Maintains a surplus as regards policyholders in an amount not less than twenty million dollars; and

(ii) Submits to the authority of this state to examine its books and records.

(b) The requirement of subdivision (4)(a)(i) of this section does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system.

(5)(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution for the payment of the valid claims of its United States ceding insurers and their assigns and successors in interest. To enable the director to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the director information substantially the same as that required to be reported on the National Association of Insurance Commissioners Annual Statement form by licensed insurers. The assuming insurer shall submit to examination of its books and records by the director and bear the expense of examination.

(b)(i) Credit for reinsurance shall not be granted under this subsection unless the form of the trust and any amendments to the trust have been approved by:

(A) The commissioner of the state where the trust is domiciled; or

(B) The commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.

(ii) The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurer's United States ceding insurers, their assigns, and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the director.

(iii) The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year the trustee of the trust shall report to the director in writing the balance of the trust and listing the trust's investments at the preceding year end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.

(c) The following requirements apply to the following categories of assuming insurer:

(i) The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars except as provided in subdivision (5)(c)(ii) of this section;

(ii) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates, and the effect of the surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers covered by the trust; and

(iii)(A) In the case of a group including incorporated and individual unincorporated underwriters:

(I) For reinsurance ceded under reinsurance agreements with an inception, amendment, or renewal date on or after January 1, 1993, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter of the group;

(II) For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of sections 44-416.05 to 44-416.10, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States; and

(III) In addition to these trusts, the group shall maintain in trust a trusteed surplus of which one hundred million dollars shall be held jointly for the benefit of the United States domiciled ceding insurers of any member of the group for all years of account;

(B) The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members; and

(C) Within ninety days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the director an annual certification by the group's domiciliary regulator of the solvency of each underwriter member, or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the group.

(6)(a) Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the director as a reinsurer in this state and secures its obligations in accordance with the requirements of this subsection.

(b) In order to be eligible for certification, the assuming insurer shall meet the following requirements:

(i) The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the director pursuant to subdivision (6)(d) of this section;

(ii) The assuming insurer must maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the director pursuant to rules and regulations;

(iii) The assuming insurer must maintain financial strength ratings from two or more rating agencies deemed acceptable by the director pursuant to rules and regulations;

(iv) The assuming insurer must agree to submit to the jurisdiction of this state, appoint the director as its agent for service of process in this state, and agree to provide security for one hundred percent of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment;

(v) The assuming insurer must agree to meet applicable information filing requirements as determined by the director, both with respect to an initial application for certification and on an ongoing basis; and

(vi) The assuming insurer must satisfy any other requirements for certification deemed relevant by the director.

(c) An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of subdivision (6)(b) of this section:

(i) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents, net of liabilities, of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the director to provide adequate protection;

(ii) The incorporated members of the association shall not be engaged in any business other than underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members; and

(iii) Within ninety days after its financial statements are due to be filed with the association's domiciliary regulator, the association shall provide to the director an annual certification by the association's domiciliary regulator of the solvency of each underwriter member or, if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.

(d)(i) The director shall create and publish a list of qualified jurisdictions under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the director as a certified reinsurer.

(ii) In order to determine whether the domiciliary jurisdiction of a non-United-States assuming insurer is eligible to be recognized as a qualified jurisdiction, the director shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits, and the extent of reciprocal recognition afforded by the non-United-States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction must agree to share information and cooperate with the director with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the director has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered in the discretion of the director.

(iii) A list of qualified jurisdictions shall be published through the National Association of Insurance Commissioners committee process. The director shall consider this list in determining qualified jurisdictions. If the director approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the director shall provide thoroughly documented justification in accordance with criteria to be developed under rules and regulations.

(iv) United States jurisdictions that meet the requirement for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program shall be recognized as qualified jurisdictions.

(v) If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the director has the discretion to suspend the reinsurer's certification indefinitely, in lieu of revocation.

(e) The director shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the director pursuant to rules and regulations. The director shall publish a list of all certified reinsurers and their ratings.

(f)(i) A certified reinsurer shall secure obligations assumed from United States ceding insurers under this subsection at a level consistent with its rating, as specified in rules and regulations adopted and promulgated by the director.

(ii) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the director and consistent with the provisions of section 44-416.07 or in a multibeneficiary trust in accordance with subsection (5) of this section, except as otherwise provided in this subsection.

(iii) If a certified reinsurer maintains a trust to fully secure its obligations subject to subsection (5) of this section and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection or comparable laws of other United States jurisdictions and for its obligations subject to subsection (5) of this section. It shall be a condition to the grant of certification under this subsection that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.

(iv) The minimum trusteed surplus requirements provided in subsection (5) of this section are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection, except that such trust shall maintain a minimum trusteed surplus of ten million dollars.

(v) With respect to obligations incurred by a certified reinsurer under this subsection, if the security is insufficient, the director shall reduce the allowable credit by an amount proportionate to the deficiency and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer's obligations will not be paid in full when due.

(vi)(A) For purposes of this subsection, a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure one hundred percent of its obligations.

(B) As used in subdivision (6)(f)(vi)(A) of this section, the term "terminated" refers to revocation, suspension, voluntary surrender, and inactive status.

(C) If the director continues to assign a higher rating as permitted by other provisions of this section, the requirement in subdivision (6)(f)(vi)(A) of this section does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended.

(g) If an applicant for certification has been certified as a reinsurer in a National Association of Insurance Commissioners-accredited jurisdiction, the director has the discretion to defer to that jurisdiction's certification and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state.

(h) A certified reinsurer that ceases to assume new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection, and the director shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.

(7)(a) Credit shall be allowed when reinsurance is ceded to an assuming insurer meeting each of the conditions set forth below:

(i) Such assuming insurer shall have its head office or be domiciled in, as applicable, and be licensed in a reciprocal jurisdiction. A reciprocal jurisdiction is a jurisdiction that meets one of the following:

(A) A jurisdiction, other than a jurisdiction of the United States, that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and European Union, is a member state of the European Union. For purposes of this subsection, a covered agreement is an agreement entered into pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. 313 and 314, as such sections existed on January 1, 2020, that is currently in effect or in a period of provisional application and that addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;

(B) A jurisdiction of the United States that meets the requirements for accreditation under the National Association of Insurance Commissioners financial standards and accreditation program; or

(C) A qualified jurisdiction as determined by the director pursuant to subdivision (6)(d)(i) of this section that is not otherwise described in subdivision (7)(a)(i)(A) or (B) of this section and that meets certain additional requirements, consistent with the terms and conditions of in-force covered agreements, as specified in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09;

(ii) Such assuming insurer shall have and maintain, on an ongoing basis, the minimum capital and surplus or the equivalent, calculated according to the methodology of its domiciliary jurisdiction, as set forth in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09. If such assuming insurer is an association, including an incorporated or individual unincorporated underwriter, such assuming insurer shall have and maintain, on an ongoing basis, minimum capital and surplus equivalents, net of liabilities and calculated according to the methodology of its domiciliary jurisdiction, and a central fund containing a minimum balance as set forth in the rules and regulations adopted and promulgated by the director pursuant to section 44-416.09;

(iii) Such assuming insurer shall have and maintain, on an ongoing basis, the minimum solvency or capital ratio, as applicable, as set forth in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09. If such assuming insurer is an association, including incorporated and individual unincorporated underwriters, such assuming insurer shall have and maintain, on an ongoing basis, a minimum solvency or capital ratio in the reciprocal jurisdiction where such assuming insurer has its head office or is domiciled, as applicable, and is also licensed;

(iv) Such assuming insurer shall agree and provide adequate assurance to the director, in a form specified pursuant to rules and regulations adopted and promulgated by the director pursuant to section 44-416.09, as follows:

(A) Such assuming insurer shall provide prompt written notice and explanation to the director if such assuming insurer falls below the minimum requirements set forth in subdivisions (7)(a)(ii) and (iii) of this section or if any regulatory action is taken against such assuming insurer for serious noncompliance with applicable law;

(B) Such assuming insurer shall consent in writing to the jurisdiction of the courts of this state and to the appointment of the director as the agent for service of process. The director may require that consent for service of process be provided to the director and included in each reinsurance agreement. Nothing in this subdivision shall limit, or in any way alter, the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws;

(C) Such assuming insurer shall consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer or its legal successor, that have been declared enforceable in the jurisdiction where the judgment was obtained;

(D) Each reinsurance agreement shall include a provision requiring such assuming insurer to provide security in an amount equal to one hundred percent of such assuming insurer's liabilities attributable to reinsurance ceded pursuant to such agreement if such assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which such judgment was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its resolution estate; and

(E) Such assuming insurer shall confirm that such assuming insurer is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers and agree to notify the ceding insurer and the director and to provide security in an amount equal to one hundred percent of such assuming insurer's liabilities to the ceding insurer if such assuming insurer enters into such a solvent scheme of arrangement. Such security shall be in a form consistent with the provisions of subsection (6) of this section and section 44-416.07 and as specified in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09;

(v) Such assuming insurer or its legal successor shall provide, if requested by the director, on behalf of itself and any legal predecessors, certain documentation to the director as specified in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09;

(vi) Such assuming insurer shall maintain a practice of prompt payment of claims under reinsurance agreements pursuant to criteria set forth in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09; and

(vii) Such assuming insurer's supervisory authority shall confirm to the director on an annual basis, as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, that such assuming insurer complies with the requirements set forth in subdivisions (7)(a)(ii) and (iii) of this section.

(b) Nothing in this subsection precludes an assuming insurer from providing the director with information on a voluntary basis.

(c)(i) The director shall timely create and publish a list of reciprocal jurisdictions.

(ii) The director's list shall include any reciprocal jurisdiction as defined under subdivisions (7)(a)(i)(A) and (B) of this section, and the director shall consider including any other reciprocal jurisdiction included on the most current list published through the National Association of Insurance Commissioners' committee process. The director may approve a jurisdiction that does not appear on the National Association of Insurance Commissioners' list of reciprocal jurisdictions in accordance with criteria developed under rules and regulations adopted and promulgated by the director pursuant to section 44-416.09.

(iii) The director may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets the requirements of a reciprocal jurisdiction in accordance with the process set forth in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09, except that the director shall not remove a reciprocal jurisdiction as defined under subdivision (7)(a)(i)(A) or (B) of this section from such list. Upon removal of a reciprocal jurisdiction from the list, credit for reinsurance ceded to an assuming insurer that has its home office or is domiciled in such jurisdiction shall be allowed if otherwise allowed pursuant to sections 44-416.05 to 44-416.10.

(d) The director shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this subsection and to which cessions shall be granted credit in accordance with this subsection. The director may add an assuming insurer to such list if a jurisdiction accredited by the National Association of Insurance Commissioners pursuant to accreditation standards has added such assuming insurer to such jurisdiction's list of assuming insurers or if, upon initial eligibility, such assuming insurer submits the information to the director as required under subdivision (7)(a)(iv) of this section and complies with any additional requirements that the director may impose by rules and regulations adopted and promulgated by the director pursuant to section 44-416.09 except to the extent that any such rules and regulations conflict with an applicable covered agreement.

(e)(i) If the director determines that an assuming insurer no longer meets one or more of the requirements under this subsection, the director may revoke or suspend the eligibility of such assuming insurer for recognition as an assuming insurer under this subsection in accordance with procedures set forth in rules and regulations adopted and promulgated by the director pursuant to section 44-416.09.

(ii) While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended, or renewed after the effective date of the suspension qualifies for credit except to the extent that such assuming insurer's obligations under the contract are secured in accordance with section 44-416.07.

(iii) If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by such assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that such assuming insurer's obligations under the contract are secured in a form acceptable to the director and consistent with the provisions of section 44-416.07.

(f) If subject to a legal process of rehabilitation, liquidation, or conservation, as applicable, the ceding insurer or its representative may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that such assuming insurer post security for all outstanding ceded liabilities.

(g) Nothing in this subsection shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree on requirements for security or other terms in such reinsurance agreement except as expressly prohibited by sections 44-416.05 to 44-416.10 or other applicable law or rules and regulations.

(h) Credit may be taken under this subsection only for reinsurance agreements entered into, amended, or renewed on or after November 14, 2020, and only with respect to losses incurred and reserves reported on or after the later of the date on which such assuming insurer has met all eligibility requirements pursuant to subdivision (7)(a) of this section or the effective date of such reinsurance agreement, amendment, or renewal.

(i) This subdivision (7)(h) does not alter or impair a ceding insurer's right to take credit for reinsurance to the extent that credit is not available under this subdivision (7)(h) and the reinsurance qualifies for credit under any other applicable provision of sections 44-416.05 to 44-416.10.

(ii) Nothing in this subdivision (7)(h) shall authorize an assuming insurer to withdraw or reduce the security provided under any reinsurance agreement except as permitted by the terms of such agreement.

(iii) Nothing in this subdivision (7)(h) shall limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate such agreement.

(8) Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of subsection (2), (3), (4), (5), (6), or (7) of this section, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.

(9) If the assuming insurer is not licensed, accredited, or certified to transact insurance or reinsurance in this state, the credit permitted by subsections (4) and (5) of this section shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:

(a)(i) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, will comply with all requirements necessary to give the court jurisdiction, and will abide by the final decision of the court or of any appellate court in the event of an appeal; and

(ii) To designate the director or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding insurer.

(b) This subsection is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement.

(10) If the assuming insurer does not meet the requirements of subsection (2), (3), (4), or (7) of this section, the credit permitted by subsection (5) or (6) of this section shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:

(a) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by subdivision (5)(c) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation, or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the state insurance commissioner with regulatory oversight all of the assets of the trust fund;

(b) The assets shall be distributed by and claims shall be filed with and valued by the state insurance commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies;

(c) If the state insurance commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the state insurance commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement; and

(d) The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this provision.

(11)(a) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the director may suspend or revoke the reinsurer's accreditation or certification.

(b) The director must give the reinsurer notice and opportunity for hearing. The suspension or revocation may not take effect until after the director's order on hearing unless:

(i) The reinsurer waives its right to hearing;

(ii) The director's order is based on regulatory action by the reinsurer's domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subdivision (6)(g) of this section; or

(iii) The director finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the director's action.

(c) While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurer's obligations under the contract are secured in accordance with section 44-416.07. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurer's obligations under the contract are secured in accordance with subdivision (6)(f) of this section or section 44-416.07.

(12)(a) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the director within thirty days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds fifty percent of the domestic ceding insurer's last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

(b) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the director within thirty days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than twenty percent of the ceding insurer's gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 44-416.06 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer subject to any additional requirements contained in rules and regulations adopted and promulgated by the Director of Insurance pursuant to subsection (2) of section 44-416.09 relating to or setting forth the valuation of assets or reserve credits, the amount and form of security supporting reinsurance arrangements, or the circumstances pursuant to which credit will be reduced or eliminated. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer, or, in the case of a trust, held in a qualified United States financial institution. This security may be in the form of:

(1) Cash;

(2) Securities approved by the Director of Insurance. The director may use the list of securities furnished by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;

(3)(a) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution effective no later than December 31 of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement; or

(b) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance or confirmation shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification, or amendment, whichever first occurs; or

(4) Any other form of security acceptable to the director.

(1) For purposes of subdivision (3) of section 44-416.07, qualified United States financial institution means an institution that:

(a) Is organized or, in the case of a United States office of a foreign banking organization, licensed under the laws of the United States or any state thereof;

(b) Is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and

(c) Has been determined by either the Director of Insurance or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the director.

(2) For purposes of those provisions of sections 44-416.05 to 44-416.10 specifying those institutions that are eligible to act as a fiduciary of a trust, qualified United States financial institution means an institution that:

(a) Is organized or, in the case of a United States branch or agency office of a foreign banking organization, licensed under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and

(b) Is regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.

(1) The director may adopt and promulgate rules and regulations to carry out sections 44-416.05 to 44-416.10.

(2)(a) The director may also adopt and promulgate rules and regulations applicable only to reinsurance arrangements described in subdivision (b) of this subsection.

(b) Any rule or regulation adopted and promulgated pursuant to this subsection shall only apply to reinsurance relating to:

(i) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;

(ii) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;

(iii) Variable annuities with guaranteed death or living benefits;

(iv) Long-term care insurance policies; or

(v) Such other life and health insurance and annuity products as determined by the director.

(c) Any rule or regulation adopted and promulgated pursuant to subdivision (b)(i) or (b)(ii) of this subsection may apply to any treaty containing (i) policies issued prior to January 1, 2015, if risk pertaining to such policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015, or (ii) policies issued on or after January 1, 2015.

(d) Any rule or regulation adopted and promulgated pursuant to this subsection may require the ceding insurer, in calculating the amounts or forms of security required to be held, to use the valuation manual prescribed by the director pursuant to section 44-8908.

(e) Any rule or regulation adopted and promulgated pursuant to this subsection shall not apply to a cession to an assuming insurer that:

(i) Meets the conditions set forth in subsection (7) of section 44-416.06;

(ii) Is a certified reinsurer in this state pursuant to subdivision (6)(a) of section 44-416.06; or

(iii) Maintains at least two hundred fifty million dollars in capital and surplus when determined in accordance with accounting practices and procedures manuals as prescribed by the director in substantial conformity with the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners and is determined by the director to be:

(A) Licensed to transact insurance or reinsurance in at least twenty-six states; or

(B) Licensed to transact insurance or reinsurance in at least ten states and either licensed to transact insurance or is an accredited reinsurer in a total of at least thirty-five states.

(f) The authority to adopt and promulgate rules and regulations pursuant to this subsection does not limit the director's general authority to adopt rules and regulations pursuant to subsection (1) of this section.

Sections 44-416.05 to 44-416.10 apply to all cessions after September 4, 2005, under reinsurance agreements that have an inception, anniversary, or renewal date not less than six months after September 4, 2005.

No credits specified in sections 44-416.05 to 44-416.10 shall be made or allowed as an admitted asset or deduction from liability to any ceding insurer for reinsurance unless the contract of reinsurance provides in substance that, in the event of the insolvency of the ceding insurer, the portion of any risk or obligation assumed by the reinsurer, when such portion is ascertained, shall be payable by the assuming insurer on the basis of the liability of the ceding insurer under the contract or contracts reinsured without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator except (1) when the contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer or (2) when the assuming insurer, with the consent of the direct insured, has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees. The reinsurance agreement may provide that the domiciliary liquidator, receiver, or legal successor of an insolvent ceding insurer shall give written notice of the pendency of a claim against the insolvent ceding insurer on the policy or bond reinsured, within a reasonable time after such claim is filed in the insolvency proceeding, and that during the pendency of such claim, any assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding in which such claim is to be adjudicated, any defense or defenses which it may deem available to the ceding insurer or its liquidator, receiver, or legal successor. The expense thus incurred by the assuming insurer may be filed as a claim against the insolvent ceding insurer as part of the expense of liquidation, to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer.

When two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose a defense to such claim, the expense shall be apportioned subject to court approval, in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding insurer.

For purposes of sections 44-420 to 44-427:

(1) Director shall mean the Director of Insurance; and

(2) Qualified actuary shall mean an individual who is a member in good standing of the American Academy of Actuaries and who meets all requirements as determined by the director by rule or regulation.

Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the director are computed appropriately, are based on assumptions which satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable laws of this state.

Every life insurance company, except as exempted by the director by rule or regulation, shall also annually include in the opinion required by section 44-421 an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the director, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts.

The director may provide for a transition period for establishing any higher reserves which the qualified actuary may deem necessary in order to render the opinion required by section 44-421.

Every opinion required by section 44-421 shall be governed by the following provisions:

(1) The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1994;

(2) The opinion shall apply to all business in force including individual and group sickness and accident insurance plans, in form and substance acceptable to the director;

(3) The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the director may prescribe;

(4) In the case of an opinion required to be submitted by a foreign or alien company, the director may accept the opinion filed by that company with the insurance supervisory official of another state if the director determines that the opinion reasonably meets the requirements applicable to a domestic company; and

(5) Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the director, for any act, error, omission, decision, or conduct with respect to the actuary's opinion.

Every opinion required by section 44-421 shall be governed by the following provisions in addition to the provisions of section 44-424:

(1) A memorandum, in form and substance acceptable to the director, shall be prepared to support each actuarial opinion and made available to the director upon request;

(2) If the insurance company fails to provide a supporting memorandum at the request of the director within a period specified by rule or regulation or the director determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed or is otherwise unacceptable to the director, the director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare such supporting memorandum as is required by the director;

(3) Except as provided in subdivisions (4) and (5) of this section, any memorandum in support of the opinion, and any other material provided by the company to the director in connection with the opinion, shall be kept confidential by the director and shall not be made public and shall not be subject to subpoena, other than for the purpose of defending an action seeking damages from any person by reason of any action required by this section or by rules and regulations adopted and promulgated hereunder, except that the memorandum or other material may otherwise be released by the director (a) with the written consent of the company or (b) to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the director for preserving the confidentiality of the memorandum or other material. Once any portion of the confidential memorandum is released by the company to the news media or other governmental agency other than a state insurance department or is cited by the company in its marketing, all portions of the memorandum become public information and are no longer confidential;

(4) The director may provide the memorandum in support of the opinion, and any other material provided by the company to the director in connection with the opinion, to other state, federal, foreign, and international regulatory and law enforcement agencies and the National Association of Insurance Commissioners and its affiliates and subsidiaries if the recipient agrees in writing to maintain the confidentiality of the information, documents, and copies; and

(5) The director may receive memorandums in support of an opinion, and any other material provided by the company to the director in connection with an opinion, from other state, federal, foreign, or international regulatory and law enforcement agencies and from the National Association of Insurance Commissioners and its affiliates and subsidiaries. The director shall maintain information received pursuant to this subdivision as confidential or privileged if received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the information. Such information shall not be a public record subject to disclosure by the director pursuant to sections 84-712 to 84-712.09, subject to subpoena, subject to discovery, or admissible in evidence in any private civil action, except that the director may use such information in any regulatory or legal action brought by the director. The director, and any other person while acting under the authority of the director who has received information pursuant to this subdivision, may not, and shall not be required to, testify in any private civil action concerning any information subject to this section. Nothing in this section shall constitute a waiver of any applicable privilege or claim of confidentiality in the information received pursuant to this subdivision as a result of information sharing authorized by this section.

The director may adopt and promulgate rules and regulations containing the minimum standards applicable to the valuation of sickness and accident policies.

The director may adopt and promulgate rules and regulations to carry out the provisions of sections 44-420 to 44-427.

No policy or contract of fire and lightning insurance, including a renewal thereof, shall be made, issued, used, or delivered by any insurer or by any insurance producer or representative of an insurer on property within this state other than such as shall conform as nearly as practicable to blanks, size of type, context, provisions, agreements, and conditions with the 1943 Standard Fire Insurance Policy of the State of New York, a copy of which shall be filed in the office of the Director of Insurance as standard policy for this state, and no other or different provision, agreement, condition, or clause shall in any manner be made a part of such contract or policy or be endorsed thereon or delivered therewith except as provided in subdivisions (1) through (11) of this section.

(1) The name of the company, its location and place of business, the date of its incorporation or organization, the state or country under which such company is organized, the amount of paid-up capital stock, whether it is a stock, mutual, reciprocal, or assessment company, the names of its officers, the number and date of the policy, and appropriate company emblems may be printed on policies issued on property in this state. Any insurer organized under special charter provisions may so indicate upon its policy and may add a statement of the plan under which it operates in this state.

In lieu of the facsimile signatures of the president and secretary of the insurer on such policy, there may appear the signature or signatures of such persons as are duly authorized by the insurer to execute the contract. No such policy shall be void if the facsimile signature or signatures of any officer of the company shall not correspond with the actual persons who are such officers at the inception of the contract if such policy is countersigned by a duly authorized agent of the insurer.

(2) Printed or written forms of description and specifications or schedules of the property covered by any particular policy and any other matter necessary to express clearly all the facts and conditions of insurance on any particular risk, which facts or conditions shall in no case be inconsistent with or a waiver of any of the provisions or conditions of the standard policy herein provided for, may be written upon or attached or appended to any policy issued on property in this state. Appropriate forms of supplemental contracts, contracts, or endorsements, whereby the interest in the property described in such policy shall be insured against one or more of the perils which insurer is empowered to assume, may be used in connection with the standard policy. Such forms of contracts, supplemental contracts, or endorsements attached or printed thereon may contain provisions and stipulations inconsistent with the standard policy if applicable only to such other perils. The pages of the standard policy may be renumbered and rearranged for convenience in the preparation of individual contracts and to provide space for the listing of rates and premiums for coverages insured thereunder or under endorsements attached or printed thereon and such other data as may be included for duplication on daily reports for office records.

(3) A company, corporation, or association organized or incorporated under and in pursuance of the laws of this state or elsewhere, if entitled to do business in this state, may with the approval of the Director of Insurance, if the same is not already included in the standard form as filed in the office of the Department of Insurance, print on its policies any provision which it is required by law to insert therein if the provision is not in conflict with the laws of this state or the United States or with the provisions of the standard form provided for in this section, but such provision shall be printed apart from the other provisions, agreements, or conditions of the policy and in type not smaller than the body of the policy and a separate title, as follows: Provisions required by law to be stated in this policy, and be a part of the policy.

(4) There may be endorsed on the outside of any policy provided for in this section for the name, with the words insurance producer and place of business, of any insurance producer, either by writing, printing, stamping, or otherwise. There may also be added, with the approval of the Director of Insurance, a statement of the group of companies with which the company is financially affiliated and the usual company medallion.

(5) When two or more companies, each having previously complied with the laws of this state, unite to issue a joint policy, there may be expressed in the headline of each policy the fact of the severalty of the contract and also the proportion of premiums to be paid to each company and the proportion of liability which each company agrees to assume. In the printed conditions of such policy, the necessary change may be made from the singular to plural number when reference is made to the companies issuing such policy.

(6) This section shall not apply to motor vehicle, inland marine, or ocean marine insurance, reinsurance contracts between insurance companies, or insurance that does not cover risks of a personal nature. An insurer may file with the director, pursuant to the Property and Casualty Insurance Rate and Form Act, any form of policy which includes coverage against the peril of fire and substantial coverage against other perils without complying with the provisions of this section if such policy with respect to the peril of fire includes provisions which are the substantial equivalent of the minimum provisions of the standard policy provided for in this section and if the policy is complete as to all its terms without reference to any other document.

(7) If the policy is made by a mutual assessment or other company having special regulations lawfully applicable to its organization, membership, policies, or contracts of insurance, such regulations shall apply to and form a part of the policy as the same may be written or printed upon or attached or appended thereto.

(8) Assessment associations may issue policies with such modifications as shall be filed with the director pursuant to the Property and Casualty Insurance Rate and Form Act.

(9) Any other coverage which a company is authorized to write under the laws of this state may be written in combination with a fire insurance policy.

(10) The policy shall provide that claims involving total loss situations shall be paid in accordance with section 44-501.02.

(11) Notwithstanding any other provision of this section, an insurer may file, pursuant to the Property and Casualty Insurance Rate and Form Act, any form of policy with variations in terms and conditions from the standard policy provided for in this section.

Insurers issuing the standard policy pursuant to section 44-501 are hereby authorized to affix thereto or include therein, subject to the approval of the Director of Insurance, a written statement that the policy does not cover loss or damage caused by nuclear reaction, nuclear radiation or radioactive contamination, all whether directly or indirectly resulting from an insured peril under said policy; Provided, that nothing herein contained shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming coverage for loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination.

Whenever any policy of insurance is written to insure any real property in this state against loss by fire, tornado, windstorm, lightning, or explosion and the property insured is wholly destroyed without criminal fault on the part of the insured or his or her assignee, the amount of the insurance written in such policy shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages.

No policy of life or endowment insurance, except policies of industrial insurance, shall be issued or delivered in this state unless it contains in substance the following provisions:

(1) A provision that all premiums shall be payable in advance either at the home office of the company or to any agent of the company upon delivery of a receipt signed by one or more of the officers who shall be named in the policy.

(2) A provision that the insured is entitled to a grace of one month within which the payment of any premium, after the first year, may be made, subject, at the option of the company, to an interest charge not in excess of six percent per annum for the number of days of grace elapsing before the payment of the premium, during which period of grace the policy shall continue in force; but in case the policy becomes a claim during the said period of grace before the overdue premium or the deferred premiums of the current policy year, if any, are paid, the amount of such premiums, with interest on any overdue premium, may be deducted from any amount payable under the policy in settlement.

(3) A provision that the policy shall constitute the entire contract between the parties; but if the company desires to make the application a part of the contract, it may do so; Provided, a copy of such application shall be endorsed upon or attached to the policy when issued, and in such case, the policy shall contain a provision that the policy and the application therefor shall constitute the entire contract between the parties.

(4) A provision that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall avoid the policy unless it is contained in a written application, and a copy of such application shall be endorsed upon or attached to the policy when issued.

(5) A provision that the policy shall be incontestable after it shall have been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums and except with respect to limitations of liability which may be contained in the policy relating to (a) death resulting from war or acts of war, declared or undeclared, where such limitations shall have been found by the Director of Insurance to be in keeping with the interests of the policyholders of the company and to be not unfairly discriminatory, and (b) aeronautics other than as a fare-paying passenger of a commercial airline, and flying on a regularly scheduled route between definitely established airports; and in any such cases the liability of the company may be limited by the terms of the policy to a sum not less than the reserve on the face of the policy and the reserve on any paid-up additions thereto and any dividends standing to the credit of the policy, less any indebtedness to the company on the policy; and, at the option of the company, provisions relative to benefits in the event of total and permanent disability, and provisions which grant additional insurance specifically against death by accident may be excepted from the incontestable clause; Provided, limitations with reference to aeronautics shall not be included in any policy where an extra premium is charged to cover the aeronautic risk, nor shall any such limitations extending beyond the contestable period be included in or attached to any policy where the applicant for insurance has not elected in writing to accept a policy with such limitations, and by such election has agreed to a reduced coverage for the aviation risk.

(6) A provision that if the age of the insured has been misstated, the amount payable under the policy shall be such as the premium paid would have purchased at the correct age.

(7) A provision that the policy shall participate in the surplus of the company, and that, beginning not later than the end of the third policy year, the company shall annually ascertain and apportion the amount of divisible surplus to which all such policies, as a separate class, are entitled, which amount shall be carried as a distinct and separate liability in favor of such policies. The insured, under any annual dividend policy, shall have the right each year to have the dividend arising from such participation paid in cash, and if the policy shall provide other dividend options, it shall further provide that, if the insured shall not elect any such other options, one of such dividend options provided shall become effective as provided in the policy; but such participation and its distribution may, by contract, be deferred to a fixed or specified time, not exceeding twenty years. Upon written request of the insured the company shall furnish him or her with a statement of the amount of the surplus provisionally ascertained or set aside on such policy and held awaiting distribution at the expiration of the deferred dividend period.

(8) A provision that after three full years' premiums have been paid, the company at any time, while the policy is in force, will advance, on proper assignment or pledge of the policy, and on the sole security thereof, at a specified rate of interest determined pursuant to section 44-502.03 a sum equal to, or, at the option of the owner of the policy, less than the amount required by section 44-405, under the conditions specified thereby, and that the company will deduct from such loan value any existing indebtedness on the policy, which has not otherwise entered into the computation of such loan value, together with any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year. Interest if payable annually in advance shall not exceed an effective rate equivalent to the specified rate of interest determined pursuant to section 44-502.03. It shall be further stipulated in the policy that failure to repay any such advance, or to pay interest, shall not avoid the policy unless the total indebtedness thereon to the company shall equal or exceed such loan value at the time of such failure, nor until one month after notice shall have been mailed by the company to the last-known address of the insured and of the assignee, if any. No condition other than as provided herein, or in section 44-405, shall be exacted as prerequisite to any such advance.

(9) A provision for nonforfeiture benefits and cash surrender values in accordance with the requirements of sections 44-406 to 44-407.09.

(10) A table showing in figures the loan values, if any, and the options available under the policies each year upon default in premium payments, during at least the first twenty years of the policy.

(11) A provision that if, in the event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance, and if such insurance shall be in force and the original policy shall not have been surrendered to the company and canceled, the policy may be reinstated within three years from such default, upon evidence of insurability satisfactory to the company and payment of arrears of premiums with interest and the payment or reinstatement of any other indebtedness to the company upon such policy.

(12) A provision that when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death, or not later than two months after receipt of such proof.

(13) In case the proceeds of a policy are payable in installments, or as an annuity, a table showing the amounts of the installments or annuity payments.

(14) A title on the face of the policy correctly describing the same. Any of the foregoing provisions or portions of this section not applicable by reason of the plan of insurance may, to the extent of inapplicability, be omitted from the policy. Any such policy may be issued or delivered in this state which in the opinion of the Department of Insurance contains provisions on any one or more of the several foregoing requirements more favorable to the policyholder than hereinbefore required.

The purpose of sections 44-502.01 to 44-502.04 is to permit and set guidelines for life insurers to include in life insurance policies issued after August 30, 1981, a provision for periodic adjustment of policy loan interest rates.

For purposes of sections 44-502.01 to 44-502.04, published monthly average shall mean a monthly bond yield average which is:

(1) Published by a national financial statistical organization;

(2) Recognized by the National Association of Insurance Commissioners;

(3) In current general use in the insurance industry; and

(4) Designated by the Director of Insurance.

(1) Policies issued on or after August 30, 1981, shall provide for policy loan interest rates as follows:

(a) A provision permitting a maximum interest rate of not more than eight percent per annum; or

(b) A provision permitting an adjustable maximum interest rate established from time to time by the life insurers as permitted by law.

(2) The rate of interest charged on a policy loan made under subdivision (1)(b) of this section shall not exceed the higher of the following:

(a) The published monthly average for the calendar month ending two months before the date on which the rate is determined; or

(b) The rate used to compute the cash surrender values under the policy during the applicable period plus one percent per annum.

(3) If the maximum rate of interest is determined pursuant to subdivision (1)(b) of this section, the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.

(4) The maximum rate for each policy must be determined at regular intervals at least once every twelve months, but not more frequently than once in any three-month period. At the intervals specified in the policy, the rate being charged (a) may be increased whenever such increase as determined under subsection (2) of this section would increase that rate by one-half of one percent or more per annum, and (b) must be reduced whenever such reduction as determined under subsection (2) of this section would decrease that rate by one-half of one percent or more per annum.

(5) The life insurer shall:

(a) Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan;

(b) Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in subdivision (5)(c) of this section;

(c) Send to policyholders with loans reasonable advance notice of any increase in the rate; and

(d) Include in the notices required by this subsection the substance of the pertinent provisions of subsections (1) and (3) of this section.

(6) The loan value of the policy shall be determined in accordance with this section, but no policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.

(7) The substance of the pertinent provisions of subsections (1) and (3) of this section shall be set forth in the policies to which they apply.

(8) For purposes of this section:

(a) The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy;

(b) Policy loan includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due;

(c) Policyholder includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; and

(d) Policy includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.

(9) No other provision of law shall apply to policy loan interest rates unless made specifically applicable to such rates.

The provisions of sections 44-502.01 to 44-502.04 shall not apply to any insurance contract issued before August 30, 1981, unless the policyholder agrees in writing to the applicability of such provisions. Any such agreement shall be void unless it is entered into by the policyholder voluntarily and following full disclosure of its effects pursuant to the rules and regulations of the Department of Insurance.

Every individual life insurance or annuity policy, except a credit life policy, shall have printed on its face or attached to the policy a notice stating in substance that the person to whom the policy is issued shall be permitted to return the policy within ten days of its delivery to the purchaser and to have the premium paid refunded if, after examination of the policy, the purchaser is not satisfied with it for any reason. If a policyholder or a purchaser pursuant to such notice returns the policy to the insurer at its home office or branch office or to the agent or agency through which it was purchased, the policy shall be void from the beginning and the parties shall be in the same position as if no policy had been issued.

No policy of life or endowment insurance shall be issued or delivered in this state (1) if it contains in substance a provision by which the policy shall purport to be issued, or to take effect, more than six months before the original application for the insurance was made, (2) if it contains in substance a provision which excludes or restricts liability in the event of death by suicide if such death occurs more than two years after the policy date, (3) if it contains in substance provision, except such provisions as are authorized or required by section 44-502, by which the settlement at the maturity of any policy after the expiration of the contestable period thereof shall be of less value than the amount promised on the face of the policy plus dividend additions, if any, less any indebtedness to the company on or secured by the policy, and less any premium that may, by the terms of the policy, be deducted, or (4) if there are attached thereto or issued as a part thereof or in connection therewith any coupons or other evidence of indebtedness by whatever name called, which coupons or other evidence of indebtedness are to be used in reducing the premiums on the policies or for the purchase of additional insurance or any benefit whatever or which are to be redeemed by the company in cash under any circumstances in the nature of a rebate on the premium.

A policy of life insurance may designate as beneficiary a trustee or trustees named or to be named by will, if the designation is made in accordance with the provisions of the policy and the requirements of the insurance company. Immediately after the proving of the will the proceeds of such insurance shall be paid to the trustee or trustees named therein to be held and disposed of under the terms of the will as they exist at the death of the testator, but if no qualified trustee makes claim to the proceeds from the insurance company within one year after the death of the insured, or if satisfactory evidence is furnished the insurance company within such one-year period showing that no trustee can qualify to receive the proceeds, payment shall be made by the insurance company to those thereafter entitled. Any payment of proceeds in accordance with the provisions of this section by an insurance company shall constitute a full discharge of such insurance company's liability for the amount so paid. The proceeds of the insurance as collected by the trustee or trustees shall not be subject to debts of the insured and inheritance tax. Enactment of this section shall not invalidate previous life insurance policy beneficiary designations naming trustees of trusts established by will.

The policies of any insurance company not organized under the laws of this state may, if filed with the director pursuant to the Property and Casualty Insurance Rate and Form Act, contain any provisions which the law of the state, territory, district, or country under which the company is organized prescribes shall be in such policies when issued in this state, and the policies of any insurance company organized under the laws of this state may, when issued or delivered in any other state, territory, district, or country, contain any provision required by the laws of the state, territory, district, or country in which such policies are issued, the provisions of sections 44-501 to 44-510 to the contrary notwithstanding.

The policies or contracts of insurance covering legal liability for injury to a person or persons caused by the ownership, operation, use, or maintenance of an automobile issued by any domestic or foreign company shall, if filed with the director pursuant to the Property and Casualty Insurance Rate and Form Act, contain a provision that the insolvency or bankruptcy of the assured shall not release the company from the payment of damages for injury sustained or loss occasioned during the life of the policy, and, in case of such insolvency or bankruptcy, an action may be maintained within the terms and limits of the policy by the injured person or his or her heirs against the insurer.

A policy issued in violation of sections 44-501 to 44-508 shall be held valid, but shall be construed as provided herein, and when any provision in such a policy is in conflict with any provision hereof, the rights, duties and obligations of the company, policyholder and the beneficiary shall be governed by the provisions of such sections.

Any company or association, or any officer, agent, or broker thereof, which or who issues or delivers in this state, or to any citizen thereof, any policy in willful violation of the provisions of sections 44-501 to 44-508 shall be punished by a fine not exceeding one hundred dollars for each offense; and the Department of Insurance may revoke the license of any company, association, agent or broker thereof which or who violates any of the provisions of such sections.

Except as otherwise provided by the Director of Insurance, no policy of life insurance or annuity shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application which becomes a part of any such policy be used, until a copy of the form has been filed with the director. No such policy, endorsement, rider, or application shall be so used until the expiration of thirty days after the form has been received unless the director shall sooner give his or her written approval thereto. Such thirty-day period may be extended by the director for an additional period not to exceed thirty days. Notice of such extension shall be mailed to the insurer involved. The director shall notify in writing the insurer which has filed any such form if such form or provision or language thereof is unjust, unfair, inequitable, misleading, or deceptive, encourages misrepresentation of the coverage, or contrary to any provision of the statutes of this state or any rule or regulation adopted and promulgated thereunder, specifying the reasons for his or her opinion, and it shall thereafter be unlawful for such insurer to use such form in this state. In such notice, the director shall state that a hearing will be granted within thirty days upon written request of the insurer. In all other cases the director shall give his or her approval. The disapproval may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

After the expiration of such thirty days from the filing of any such form or at any time after having given written approval thereof, the director may, after a hearing of which at least ten days' written notice has been given to the insurer issuing such form, withdraw approval on any of the grounds stated in section 44-511. Such disapproval shall be effected by written order of the director which shall state the grounds for disapproval and the date, not less than thirty days after such hearing, when the withdrawal of approval shall become effective. The disapproval may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

Whenever any insurer provides by contract, policy, certificate, or any other means whatsoever for a service, or for the partial or total reimbursement, payment, or cost of a service, to or on behalf of any of its policyholders, group policyholders, subscribers, or group subscribers or any person or group of persons, which service may be legally performed by a person licensed in this state for the practice of osteopathic medicine and surgery, chiropractic, optometry, psychology, dentistry, podiatry, or mental health practice or by a person who holds a privilege to practice in Nebraska as a professional counselor under the Licensed Professional Counselors Interstate Compact, the person rendering such service or such policyholder, subscriber, or other person shall be entitled to such partial or total reimbursement, payment, or cost of such service, whether the service is performed by a duly licensed medical doctor or by a duly licensed osteopathic physician, chiropractor, optometrist, psychologist, dentist, podiatrist, or mental health practitioner or duly privileged professional counselor. This section shall not limit the negotiation of preferred provider policies and contracts under sections 44-4101 to 44-4113.

(1) A medical benefit contract which provides reimbursement for prescription drugs, including contracts by health maintenance organizations and preferred provider organizations, shall not require a person to obtain prescription drugs from a mail-order pharmacy as a condition to obtaining reimbursement for such drugs. This subsection shall apply to contracts delivered, issued for delivery, or renewed in this state on or after July 10, 1990.

(2)(a) A medical benefit contract, including any contract by a preferred provider organization but excluding any contract by a health maintenance organization, which provides reimbursement for prescription drugs and other pharmacy services shall not impose upon any person who is a party to or beneficiary of the contract a fee or copayment not equally imposed upon any party or beneficiary utilizing a mail-order pharmacy, and no such contract shall provide differences in coverage or impose any different conditions upon any person who is a party to or beneficiary of the contract not equally imposed upon any party or beneficiary utilizing a mail-order pharmacy. This subsection shall apply to contracts delivered, issued for delivery, or renewed in this state on or after July 16, 1994.

(b) This subsection shall not apply to reimbursement for long-term maintenance drugs. Long-term maintenance drugs means medications which are dispensed pursuant to a single prescription for a period of no less than one hundred eighty days, exclusive of authorized refills, for the ongoing treatment of a chronic medical condition or disease or congenital condition or disorder.

For purposes of sections 44-514 to 44-521, unless the context otherwise requires:

(1) Policy shall mean an automobile liability policy providing all or part of the coverage defined in subdivision (2) of this section, delivered or issued for delivery in this state, insuring a natural person as named insured or one or more related individuals resident of the same household, and under which the insured vehicles designated in the policy are of the following types only: (a) A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers nor rented to others; or (b) any other four-wheel motor vehicle of the pickup, panel, or delivery type which is not used in the occupation, profession, or business of the insured, except that sections 44-514 to 44-521 shall not apply (i) to any policy issued under an automobile assigned risk plan; (ii) to any policy subject to section 44-523; (iii) to any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards; or (iv) to any policy of insurance issued principally to cover personal or premises liability of an insured even though such insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance, or use of a motor vehicle on the premises of such insured or on the way immediately adjoining such premises;

(2) Automobile liability coverage shall include only coverage of bodily injury and property damage liability, medical payments, uninsured motorist coverage, and underinsured motorist coverage;

(3) Renewal or to renew shall mean the issuance and delivery by an insurer of a policy replacing at the end of the policy period a policy previously issued and delivered by the same insurer or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term, except that (a) any policy with a policy period or term of less than six months shall be considered as if written for a policy period or term of six months and (b) any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year, and such policy may be terminated at the expiration of any annual period upon giving twenty days' notice of cancellation prior to such anniversary date, and such cancellation shall not be subject to any other provisions of sections 44-514 to 44-521; and

(4) Nonpayment of premium shall mean failure of the named insured to discharge when due any of his or her obligations in connection with the payment of any premium on a policy or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit.

(1) A notice of cancellation of a policy shall be effective only if it is based on one or more of the following reasons:

(a) Nonpayment of premium;

(b) Fraud or material misrepresentation affecting the policy or in the presentation of a claim thereunder, or violation of any of the terms or conditions of the policy; or

(c) The named insured or any operator, either resident in the same household or who customarily operates an automobile insured under the policy, (i) has had his or her driver's license suspended or revoked pursuant to law, (ii) has been convicted of larceny of an automobile, or theft of an automobile in violation of section 28-516, (iii) has been convicted of an offense for which such suspension or revocation is mandatory, or (iv) whose driver's license is subject to revocation or suspension pursuant to the provisions of sections 60-4,182 to 60-4,186, by reason of his or her driving record as disclosed by the files of the Director of Motor Vehicles during the policy period or, if the policy is a renewal, during its policy period or the one hundred eighty days immediately preceding its effective date.

(2) This section shall not apply to any policy or coverage which has been in effect less than sixty days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy.

(3) This section shall not apply to nonrenewal.

(1) No notice of cancellation of a policy to which section 44-515 applies shall be effective unless mailed by registered mail, certified mail, or first-class mail using intelligent mail barcode or another similar tracking method used or approved by the United States Postal Service to the named insured at least thirty days prior to the effective date of cancellation, except that if cancellation is for nonpayment of premium, at least ten days' notice of cancellation accompanied by the reason therefor shall be given. The requirements of this subsection shall apply to a cancellation initiated by a premium finance company for nonpayment of premium.

(2) Unless the reason accompanies or is included in the notice of cancellation, the notice of cancellation shall state or be accompanied by a statement that upon written request of the named insured, mailed or delivered to the insurer not less than twenty-five days prior to the effective date of cancellation, the insurer will specify the reason for such cancellation. The insurer shall, upon such written request of the named insured, mailed or delivered to the insurer not less than twenty-five days prior to the effective date of cancellation, specify in writing the reason for such cancellation. Such reason shall be mailed or delivered to the named insured within five days after receipt of such request.

(3) For purposes of sections 44-514 to 44-521:

(a) An insurer's substitution of insurance upon renewal which results in substantially equivalent coverage shall not be considered a cancellation of a policy; and

(b) The transfer of a policyholder between insurers within the same insurance group shall be considered a cancellation only if the transfer results in policy coverage or rates substantially less favorable to the insured.

(4) Subsections (1) and (2) of this section shall not apply to nonrenewal.

(1) No insurer shall refuse to renew a policy unless such insurer or its agent shall mail or deliver to the named insured, at the address shown in the policy, at least twenty days' advance notice of its intention not to renew. This section shall not apply: (a) If the insurer has manifested its willingness to renew; nor (b) in case of nonpayment of premium, except that notwithstanding the failure of an insurer to comply with this section, the policy shall terminate on the effective date of any other insurance policy with respect to any automobile designated in both policies.

(2) For purposes of sections 44-514 to 44-521:

(a) An insurer's substitution of insurance upon renewal which results in substantially equivalent coverage shall not be considered a refusal to renew a policy; and

(b) The transfer of a policyholder between insurers within the same insurance group shall be considered a refusal to renew a policy only if the transfer results in policy coverage or rates substantially less favorable to the insured.

(3) Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds for cancellation that existed before the effective date of such renewal.

If an insurer shall refuse to renew a policy, as provided for in section 44-517, the insurer shall, upon written request of the named insured, mailed or delivered not less than fifteen days prior to the effective date of such notice of intention not to renew, specify in writing the reason for such refusal to renew. Such reason shall be mailed or delivered to the named insured within five days after receipt of such request.

Evidence of mailing notice of cancellation, of intention not to renew, or of reasons for cancellation to the named insured's last mailing address known to the insurer shall be sufficient proof of receipt of notice.

When automobile bodily injury and property damage liability coverage is canceled, other than for nonpayment of premium, or in the event of failure to renew automobile bodily injury and property damage liability coverage to which section 44-517 applies, the insurer shall notify the named insured of the insured's possible eligibility for automobile liability insurance through an affiliated insurer or the automobile liability assigned risk plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew.

There shall be no liability on the part of, and no cause of action of any nature shall arise against, the Director of Insurance or against any insurer, its authorized representative, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or intention not to renew, for any statement made by any of them in any written notice of cancellation or intention not to renew, or in any other communication, oral or written, specifying the reasons for cancellation or intention not to renew, or the providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith.

(1) No insurer may file an insurance policy with the department, as required by the Property and Casualty Insurance Rate and Form Act, which insures against loss or damage to property or against legal liability from any cause unless such policy contains appropriate provisions for cancellation thereof by either the insurer or the insured and for nonrenewal thereof by the insurer.

(2) On any policy or binder of property, marine, or liability insurance, as specified in section 44-201, the insurer shall give the insured sixty days' written notice prior to cancellation or nonrenewal of such policy or binder, except that the insurer may cancel upon ten days' written notice to the insured in the event of nonpayment of premium or if such policy or binder has a specified term of sixty days or less unless the policy or binder has previously been renewed. The requirements of this subsection shall apply to a cancellation initiated by a premium finance company for nonpayment of premium. The provisions of this subsection and subsection (4) of this section shall not apply to nonrenewal of a policy or binder which has a specified term of sixty days or less unless the policy or binder has previously been renewed. Such notice shall state the reason for cancellation or nonrenewal.

(3) Notwithstanding subsection (2) of this section, no policy of property, marine, or liability insurance, as specified in section 44-201, which has been in effect for more than sixty days shall be canceled by the insurer except for one of the following reasons:

(a) Nonpayment of premium;

(b) The policy was obtained through a material misrepresentation;

(c) Any insured has submitted a fraudulent claim;

(d) Any insured has violated any of the terms and conditions of the policy;

(e) The risk originally accepted has substantially increased;

(f) Certification to the Director of Insurance of loss of reinsurance by the insurer which provided coverage to the insurer for all or a substantial part of the underlying risk insured; or

(g) The determination by the director that the continuation of the policy could place the insurer in violation of the insurance laws of this state.

(4) Notice of cancellation or nonrenewal shall be sent by registered mail, certified mail, first-class mail, or first-class mail using intelligent mail barcode or another similar tracking method used or approved by the United States Postal Service to the insured's last mailing address known to the insurer. If sent by first-class mail, a United States Postal Service certificate of mailing shall be sufficient proof of receipt of notice on the third calendar day after the date of the certificate.

(5) For purposes of this section:

(a) An insurer's substitution of insurance upon renewal which results in substantially equivalent coverage shall not be considered a cancellation of or a refusal to renew a policy; and

(b) The transfer of a policyholder between insurers within the same insurance group shall be considered a cancellation or a refusal to renew a policy only if the transfer results in policy coverage or rates substantially less favorable to the insured.

(6) The requirements of subsections (2), (3), and (4) of this section shall not apply to automobile insurance coverage, insurance coverage issued under the Nebraska Workers' Compensation Act, insurance coverage on growing crops, or insurance coverage which is for a specified season or event and which is not subject to renewal or replacement.

(7) All policy forms issued for delivery in Nebraska shall conform to this section.

(1)(a) Except as provided in subdivision (1)(b) of this section, a notice of cancellation, given for reasons other than for nonpayment of premium, of a policy of automobile liability insurance issued or delivered in this state shall only be effective if mailed by registered mail, certified mail, or first-class mail using intelligent mail barcode or another similar tracking method used or approved by the United States Postal Service to the named insured at the address shown in the policy at least thirty days prior to the effective date of such cancellation.

(b) A notice of cancellation, initiated by a premium finance company, of a policy of automobile liability insurance issued or delivered in this state shall only be effective if mailed by registered mail, certified mail, or first-class mail using intelligent mail barcode or another similar tracking method used or approved by the United States Postal Service to the named insured at the address shown in the policy at least ten days prior to the effective date of such cancellation.

(2) For purposes of this section:

(a) An insurer's substitution of insurance upon renewal which results in substantially equivalent coverage shall not be considered a cancellation of a policy; and

(b) The transfer of a policyholder between insurers within the same insurance group shall be considered a cancellation of a policy only if the transfer results in policy coverage or rates substantially less favorable to the insured.

(3) This section shall not apply (a) to any policy subject to sections 44-514 to 44-521, (b) to any policy issued under an automobile assigned risk plan or to any policy of insurance issued principally to cover personal or premises liability of an insured even though such insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance, or use of a motor vehicle on the premises of the insured or on the ways adjoining such premises, and (c) to any policy or coverage which has been in effect less than sixty days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy.

(4) Any attempted cancellation in violation of the provisions of this section shall be void.

Sections 44-524 to 44-530 shall be known and may be cited as the Standardized Health Claim Form Act.

The purposes of the Standardized Health Claim Form Act are to standardize the forms used in the billing and reimbursement of health care, reduce the number of forms utilized and increase efficiency in the reimbursement of health care through standardization, and encourage the use of electronic data interchange of health care expenses and reimbursement.

For purposes of the Standardized Health Claim Form Act:

(1) Ambulatory surgical facility shall mean a facility, not a part of a hospital, which provides surgical treatment to patients not requiring hospitalization and which is licensed as a health clinic as defined by section 71-416 but shall not include the offices of private physicians or dentists whether for individual or group practice;

(2) Health care shall mean any treatment, procedure, or intervention to diagnose, cure, care for, or treat the effects of disease or injury or congenital or degenerative condition;

(3) Health care practitioner shall mean an individual or group of individuals in the form of a partnership, limited liability company, or corporation licensed, certified, or otherwise authorized or permitted by law to administer health care in the course of professional practice and shall include the health care professions and occupations which are regulated in the Uniform Credentialing Act;

(4) Hospital shall mean a hospital as defined by section 71-419 except state hospitals administered by the Department of Health and Human Services;

(5) Institutional care providers shall mean all facilities licensed or otherwise authorized or permitted by law to administer health care in the ordinary course of business and shall include all health care facilities defined in the Health Care Facility Licensure Act;

(6) Issuer shall mean an insurance company, fraternal benefit society, health maintenance organization, third-party administrator, or other entity reimbursing the costs of health care expenses;

(7) Medicaid shall mean the medical assistance program pursuant to the Medical Assistance Act;

(8) Medicare shall mean Title XVIII of the federal Social Security Act, 42 U.S.C. 1395 et seq., as amended; and

(9) Uniform claim form shall mean the claim forms and electronic transfer procedures developed pursuant to section 44-527.

The Director of Insurance shall develop uniform claim forms and uniform electronic transfer procedures for issuers, institutional care providers, and health care practitioners. The director shall consult with interested individuals and associations who have expertise in the development and maintenance of uniform claim forms and procedures. The director shall utilize forms available from state and federal sources and may modify such forms to meet the specific needs for health care in this state.

No issuer, institutional care provider, or health care practitioner shall contract with any person or employer, union, or other organization under which health care services or benefits are provided unless such person or organization accepts and utilizes or agrees to accept and utilize the uniform claim form for claims for health care services and benefits provided to employees or members.

Each hospital and ambulatory surgical facility shall issue and complete a billing invoice on the uniform claim form for outpatient and inpatient services provided by the hospital or ambulatory surgical facility as a condition of reimbursement by medicaid, medicare, and issuers.

Any person who knowingly violates or knowingly aids or abets in the violation of the Standardized Health Claim Form Act or who fails to perform any duty under such act shall be guilty of a Class III misdemeanor. Any issuer who violates the act shall be subject to license revocation by the Department of Insurance.

(1) If an insurer reduces or eliminates any coverage in or introduces a more restrictive condition as part of a policy in force delivered or issued for delivery in this state and subject to sections 44-514 to 44-521 or section 44-522 or 44-523 prior to renewal of the policy and other than at the request of the named insured or as required by law, the insurer shall send to the named insured a notice explaining clearly what coverage has been reduced or eliminated or what condition has been restricted. The notice may be in a printed or electronic form if the named insured requested the electronic form and there was an agreement to that effect with the insurer prior to such request. If the named insured does not receive the notice, the reduction or elimination of coverage or restrictive condition shall not become part of the policy. It shall be a rebuttable presumption that all insureds received the notice if it was sent by email or first-class mail to the named insured's last-known email address or mailing address contained in the policy.

(2) Notice of any reduction or elimination of coverage or restrictive condition as part of a policy in force delivered or issued for delivery in this state and subject to sections 44-514 to 44-521 or section 44-522 or 44-523 and other than at the request of the named insured or as required by law shall be sent to each agency that holds an agency contract with the insurer prior to the introduction into the marketplace of a policy containing the reduction or elimination of coverage or restrictive condition.

(3) Nothing in this section shall restrict the right of the parties to an insurance contract to amend the contract, during the policy term but not during the renewal process, pursuant to an endorsement attached to the policy if requested by a named insured under the policy. An endorsement attached to a policy pursuant to this subsection requires no further notice beyond such endorsement.

It shall be unlawful for any insurance company or any agent to knowingly issue any fire insurance policy upon property within this state for an amount which, with any existing insurance, exceeds the fair value of the property or of the interest of the insured therein, or for a longer time than for five years, except as provided in section 44-812.

It shall be unlawful for any party having an insurable interest in property located in this state to knowingly procure any fire insurance policy upon his interest in such property, for an amount in excess of the fair value of his interest in the property, or for an amount which, with any existing insurance thereon, exceeds the fair value of his interest in the property.

Every insurer who makes insurance upon any building or property or interest therein against loss or damage by fire, and every agent who issues a fire insurance policy covering any building or property or interest therein, and every insured who procures a policy of fire insurance upon any building or property or interest therein owned by him, is presumed to know the insurable value of such building or property or interest therein at the time such insurance is effected. Any insurer who knowingly makes insurance on any building or property or interest therein against loss or damage by fire in excess of the insurable value thereof, shall be fined in a sum not less than fifty dollars nor more than one hundred dollars. Any agent who knowingly effects insurance on a building or property or interest therein in excess of the insurable value thereof shall be fined in a sum not less than fifteen nor more than twenty-five dollars.

Every fire insurance policy must state on its face the amount of the premium.

All life insurance policies except industrial policies delivered in this state shall be signed by the secretary or assistant secretary; in their absence, by a secretary pro tempore and by the president or vice president, or, in their absence, by two directors, of the company issuing the same.

In any claim arising under a policy which has been issued in this state by any life insurance company without previous medical examination, or without the knowledge and consent of the insured, or if said insured is under ten years of age, without the consent of the parent, guardian or other person having legal custody of said minor, the statements made in the application as to age, physical condition and family history of the insured, shall be valid and binding upon the company, but the company shall not be debarred from proving as a defense to such claim that said statements were willfully false, fraudulent or misleading.

(1) Except as provided in subsection (2) of this section, no policy of insurance shall be issued upon the person of any individual except upon the application of the individual insured or with the written consent of the individual insured. Nothing in this section shall be deemed to prohibit the immediate transfer or assignment of a life insurance policy or annuity contract so issued.

(2) Notwithstanding the provisions of subsection (1) of this section, (a) a husband or wife may effectuate a policy of insurance upon the person of the other and (b) any person may effectuate a policy of insurance upon the person of a child.

(3) The term policy of insurance as used in this section shall include any life insurance policy, annuity contract, and contract of sickness and accident insurance but shall not include a contract of group life insurance or a contract of blanket or group sickness and accident insurance.

(4) Nothing in Chapter 44 shall prohibit an organization or entity described in section 501(c)(3) of the Internal Revenue Code or to whom a charitable contribution could be made under section 170(c) of the code or a trust all of whose beneficiaries are organizations or entities described in section 501(c)(3) of the code or to whom a charitable contribution could be made under section 170(c) of the code from procuring, effectuating, or causing to be procured or effectuated the ownership of any life insurance policy or annuity contract upon the life of an individual if such individual gives written consent to the issuance of such policy or contract when such organization, entity, or trust is the owner of such policy or contract. Nothing in Chapter 44 shall require such organization, entity, or trust to have an insurable interest as defined in section 44-103 in the life of such individual in order for a policy or contract to be procured or effectuated pursuant to this subsection. This subsection shall apply to all policies and contracts in force on or after April 16, 1992. The changes made to this subsection by Laws 2004, LB 980, shall apply to all policies and contracts in force on or after July 16, 2004.

(5) Except as provided in subsection (4) of this section, nothing in this section shall be construed to permit a person to procure, effectuate, or cause to be procured or effectuated, directly or by assignment or otherwise, any policy of insurance upon the person of a child or other individual unless the benefits under such policy are payable to the child or other individual insured, to his or her personal representative, or to a person having, at the time such policy is issued, an insurable interest in the child or other individual insured.

A minor not less than ten years of age, as determined by nearest birthday, shall not be deemed incompetent by reason of such minority to contract for or with respect to insurance or annuities upon his life or against bodily injury or death by accident or disability from sickness, for the benefit of himself or his estate, or for the benefit of the father, mother, husband, wife, brother or sister of such minor; nor shall such minor be deemed incompetent by reason of such minority to surrender such insurance or give a valid discharge on account of any benefit accruing or for money payable under the contract; Provided, such surrender or discharge shall be approved in writing by the parent of such minor or person liable for his support.

Subject to the rights of any person other than the minor whose life is insured, the applicant for a policy upon the life of a minor may during the lifetime of said minor and prior to the time such minor shall be ten years of age at nearest birthday, exercise any option contained in said policy in all respects the same as though such applicant were the person insured by or the owner of said policy, and, under like circumstances, shall be entitled to collect and receive all sums payable upon or on account of such policy.

Any minor domiciled in this state, who shall have attained the age of eighteen years, shall be deemed competent to receive, and to give full acquittance and discharge for a single sum or for periodical payments, not exceeding three thousand dollars in any one year, payable by a life insurance company under the maturity, death or settlement agreement provisions in effect or elected by such minor under a life insurance policy or annuity contract, if such policy, contract or agreement shall provide for the payment or payments to such minor and if prior to such payment the company had not received written notice of the appointment of a duly qualified guardian of the estate of such minor; but no such minor shall be deemed competent to alienate the right to such payment or payments or to anticipate the same.

The provisions of this section shall not be construed as requiring any insurance company making such payment to determine whether any other insurance company may be effecting a similar payment to the same minor.

Any domestic life insurance company may accumulate and maintain, in addition to the net value of its policies and all accumulations held on account of existing or future dividends, policies, or groups of such policies, a contingency reserve of not more than twenty percent of said net value, or the sum of one hundred thousand dollars, whichever is the greater. For cause shown, the Department of Insurance may, at any time, and from time to time, permit any company to accumulate and maintain a larger contingency reserve, not exceeding one year under any one permission, by filing in the office of the department a written request stating the reasons therefor.

(1) Insurers authorized to deliver or issue for delivery life insurance policies in this state may deliver or issue for delivery one or more funding agreements, but the delivery or issuance for delivery of funding agreements shall not be deemed the business of insurance, life insurance or an annuity or other line of business as set forth in section 44-201, a security as defined in subdivision (15) of section 8-1101, or receipt of gross premiums as set forth in section 77-908. The delivery or issuance for delivery of a funding agreement by an admitted life insurer in this state shall constitute a lawful activity of that insurer that is reasonably related to and incidental to its insurance activities as provided in this section. However, this section shall not authorize any insurer to transact, under the guise of funding agreements, any line of insurance not authorized by its certificate of authority.

(2) No amounts shall be guaranteed or credited under any funding agreement except upon reasonable assumptions as to investment income and expenses and on a basis equitable to all holders of funding agreements of a given class.

(3) Amounts paid to the insurer, and proceeds applied under optional modes of settlement, under funding agreements may be allocated by the insurer to one or more separate accounts.

(4) The Director of Insurance may adopt and promulgate rules and regulations to implement this section, including rules and regulations setting forth the terms and conditions under which an insurer may issue funding agreements.

(5) Notwithstanding any other provision of law, the director shall have sole authority to regulate the issuance and sale of funding agreements, including the persons selling funding agreements on behalf of insurers.

(6) Nothing in this section is intended to affect the order in which allowed claims shall be given preference under section 44-4842. Holders of funding agreements shall retain the priority in allowance of claims described in subdivision (2) of section 44-4842.

(7) For purposes of this section, funding agreement means an agreement that authorizes an admitted life insurer to accept funds and that provides for an accumulation of those funds for the purpose of making one or more payments at future dates in amounts that are not based on mortality or morbidity contingencies. Funding agreement does not include any agreement in connection with the funding of one or more payments that are excludable from the gross income of the recipient under section 104(a)(2) of the Internal Revenue Code.

(1) Insurers authorized to deliver or issue for delivery life insurance policies in this state may deliver or issue for delivery synthetic guaranteed investment contracts if the following requirements are met:

(a) The insurer is authorized to deliver, or issue for delivery, life insurance policies in this state; and

(b) The insurer has at least one billion dollars in admitted assets or one hundred million dollars in capital and surplus, as reflected by the most recent financial statements on file with the Director of Insurance.

(2) Synthetic guaranteed investment contracts, that are not otherwise subject to filing under applicable law and regulation, shall be filed, before being marketed or issued in this state, by the insurer with the director. If the director finds that the synthetic guaranteed investment contracts contemplate practices that are unfair or unreasonable or otherwise inconsistent with the provisions of Chapter 44, the director may disapprove of the forms of synthetic guaranteed investment contracts specifying in what regard the synthetic guaranteed investment contracts are unfair or unreasonable or otherwise inconsistent with the provisions of Chapter 44.

(3) The director may adopt and promulgate rules and regulations to implement this section, including rules and regulations setting forth the terms and conditions under which an insurer may issue synthetic guaranteed investment contracts.

(4) For purposes of this section, synthetic guaranteed investment contract means a policy, contract, or agreement that establishes the insurer's obligations under the policy, contract, or agreement by reference to a portfolio of assets that is not owned or possessed by the insurer.

The term sickness and accident insurance as used in sections 44-710 to 44-767 shall mean insurance against loss or expense resulting from the sickness of the insured, from the bodily injury or death of the insured by accident, or both.

(1) Except as otherwise provided by the Director of Insurance and subsection (2) of this section, no policy of sickness and accident insurance shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application which becomes a part of any such policy be used, until a copy of the form and of the premium rates and of the classification of risks pertaining thereto has been filed with the Director of Insurance. No policy, endorsement, rider, or application shall be used until the expiration of thirty days after the form has been received by the director unless the director gives his or her written approval thereto prior to the expiration of the thirty-day period. The thirty-day period may be extended by the director for an additional period not to exceed thirty days. Notice of such extension shall be sent to the insurer involved. The director shall notify in writing the insurer which has filed any such form if it contains benefits that are unreasonable in relation to the premium charged or any provision which is unjust, unfair, inequitable, misleading, or contrary to the law of this state, specifying the reasons for his or her opinion, and it shall thereafter be unlawful for such insurer to use such form in this state. In such notice, the director shall state that a hearing will be granted within thirty days upon written request of the insurer. In all other cases the director shall give his or her approval. The decision of the director may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

(2) No sickness and accident insurance policy subject to the federal Patient Protection and Affordable Care Act, Public Law 111-148, shall be delivered or issued for delivery in this state, including any policy or certificate of sickness and accident insurance issued to or for associations not domiciled in this state other than a certificate issued to an employee under an employee benefit plan of an employer headquartered in another state where the policy is lawfully issued in that state, nor shall any endorsement, rider, certificate, or application which becomes a part of any such policy be used until a copy of the form and of the premium rates and of the classification of risks pertaining thereto has been filed with and approved by the Director of Insurance. No policy, endorsement, rider, or application shall be used until the expiration of thirty days after the form has been received by the director unless the director gives his or her written approval thereto prior to the expiration of the thirty-day period. The thirty-day period may be extended by the director for an additional period not to exceed thirty days. Notice of such extension shall be sent to the insurer involved. The director shall notify in writing the insurer which has filed any such form if it contains benefits that are unreasonable in relation to the premium charged or any provision which is unjust, unfair, inequitable, misleading, or contrary to the law of this state, specifying the reasons for his or her opinion, and it shall thereafter be unlawful for such insurer to use such form in this state. In such notice, the director shall state that a hearing will be granted within thirty days upon written request of the insurer. In all other cases the director shall give his or her approval. The decision of the director may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

No policy of sickness and accident insurance shall be delivered or issued for delivery to any person in this state unless (1) the entire money and other considerations therefor are expressed therein, (2) the time at which the insurance takes effect and terminates is expressed therein, (3) it purports to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, any two or more eligible members of that family, including husband, wife, dependent children, any children enrolled on a full-time basis in any college, university, or trade school, or any children under a specified age which shall not exceed thirty years and any other person dependent upon the policyholder; any individual policy hereinafter delivered or issued for delivery in this state which provides that coverage of a dependent child shall terminate upon the attainment of the limiting age for dependent children specified in the policy shall also provide in substance that attainment of such limiting age shall not operate to terminate the coverage of such child during the continuance of such policy and while the child is and continues to be both (a) incapable of self-sustaining employment by reason of an intellectual disability or a physical disability and (b) chiefly dependent upon the policyholder for support and maintenance, if proof of such incapacity and dependency is furnished to the insurer by the policyholder within thirty-one days of the child's attainment of the limiting age and subsequently as may be required by the insurer but not more frequently than annually after the two-year period following the child's attainment of the limiting age; such insurer may charge an additional premium for and with respect to any such continuation of coverage beyond the limiting age of the policy with respect to such child, which premium shall be determined by the insurer on the basis of the class of risks applicable to such child, (4) it contains a title on the face of the policy correctly describing the policy, (5) the exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in sections 44-710.03 and 44-710.04, are printed, at the insurer's option, either included with the benefit provision to which they apply or under an appropriate caption such as EXCEPTIONS, or EXCEPTIONS AND REDUCTIONS; if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies, (6) each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof, (7) it contains no provision purporting to make any portion of the charter, rules, constitution, or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the Director of Insurance, and (8) on or after January 1, 1999, any restrictive rider contains a notice of the existence of the Comprehensive Health Insurance Pool if the policy provides health insurance as defined in section 44-4209.

If any policy of sickness and accident insurance is issued by an insurer domiciled in this state for delivery to a person residing in another state and if the official having responsibility for the administration of the insurance laws of such other state has advised the Director of Insurance that any such policy is not subject to approval or disapproval by such official, the Director of Insurance may by ruling require that such policy meet the standards set forth in sections 44-710.01 and 44-710.03 to 44-710.09.

Except as provided in section 44-710.05, each policy of sickness and accident insurance delivered or issued for delivery to any person in this state shall contain the provisions specified in this section in the words in which the provisions appear in this section, except that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the Director of Insurance which are in each instance not less favorable in any respect to the insured or the beneficiary. Such provisions shall be preceded individually by the caption appearing in this section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Director of Insurance may approve.

(1) A provision as follows: ENTIRE CONTRACT: CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.

(2) A provision as follows: TIME LIMIT ON CERTAIN DEFENSES: (a) After two years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of such two-year period. The foregoing policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial two-year period nor to limit the application of subdivisions (1) through (5) of section 44-710.04 in the event of misstatement with respect to age or occupation or other insurance. A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium until at least age fifty or, in the case of a policy issued after age forty-four, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision, from which the clause "as defined in the policy" may be omitted at the insurer's option, under the caption INCONTESTABLE: After this policy has been in force for a period of two years during the lifetime of the insured, excluding any period during which the insured is disabled, it shall become incontestable as to the statements contained in the application. (b) No claim for loss incurred or disability, as defined in the policy, commencing after two years from the date of issue of this policy shall be reduced or denied on the ground that disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy.

(3) A provision as follows: GRACE PERIOD: A grace period of ......... (insert a number not less than 7 for weekly premium policies, 10 for monthly premium policies, and 31 for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. A policy which contains a cancellation provision may add, at the end of the above provision: Subject to the right of the insurer to cancel in accordance with the cancellation provision hereof. A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the above provision: Unless not less than thirty days prior to the premium due date the insurer has delivered to the insured or has mailed to his or her last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted.

(4) A provision as follows: REINSTATEMENT: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy, except that if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid but not to any period more than sixty days prior to the date of reinstatement. (The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue.)

(5) A provision as follows: NOTICE OF CLAIM: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ........... (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the above provision: Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he or she shall, at least once in every six months after having given notice of claim, give to the insurer notice of continuance of such disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given.

(6) A provision as follows: CLAIM FORMS: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within fifteen days after the giving of such notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character, and the extent of the loss for which claim is made.

(7) A provision as follows: PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at its office in case of claim for loss for which the policy provides any periodic payment contingent upon continuing loss within ninety days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time and if such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.

(8) A provision as follows: TIME OF PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid ................ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof.

(9) A provision as follows: PAYMENT OF CLAIMS: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured. The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer: (a) If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $.......... (insert an amount which shall not exceed five thousand dollars), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment. (b) Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person.

(10) A provision as follows: PHYSICAL EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.

(11) A provision as follows: LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.

(12) A provision as follows: CHANGE OF BENEFICIARY: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy, to any change of beneficiary or beneficiaries, or to any other changes in this policy. The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.

(13) A provision as follows: CONFORMITY WITH STATE AND FEDERAL LAW: Any provision of this policy which, on its effective date, is in conflict with the law of the federal government or the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such law.

Except as provided in sections 44-710.05 and 44-787, no policy of sickness and accident insurance delivered or issued for delivery to any person in this state shall contain provisions respecting the matters set forth below unless such provisions are in the words in which the provisions appear in this section, except that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the Director of Insurance which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption appearing in this section or, at the option of the insurer, by such appropriate individual or group captions or subcaptions as the Director of Insurance may approve.

(1) A provision as follows: CHANGE OF OCCUPATION: If the insured be injured or contract sickness after having changed his or her occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his or her occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change of occupation.

(2) A provision as follows: MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.

(3) Except as provided in subdivision (6) of this section, a provision as follows: OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for ................ (insert type of coverage or coverages) in excess of $................ (insert maximum limit of indemnity or indemnities), the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his or her estate; or in lieu thereof: Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his or her beneficiary, or his or her estate, as the case may be, and the insurer will return all premiums paid for all other such policies.

(4) Except as provided in subdivision (6) of this section, a provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision-of-service basis or on an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense-incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision-of-service basis, the like amount of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage. If the foregoing policy provision is included in a policy which also contains the next following policy provision there shall be added to the caption of the foregoing provision the phrase .... EXPENSE-INCURRED BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the Director of Insurance, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada and by hospital or medical service organizations and to any other coverage the inclusion of which may be approved by the Director of Insurance. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employers liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as other valid coverage.

(5) Except as provided in subdivision (6) of this section, a provision as follows: INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense-incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined. If the foregoing policy provision is included in a policy which also contains the next preceding policy provision, there shall be added to the caption of the foregoing provision the phrase .... OTHER BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the Director of Insurance, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada and to any other coverage the inclusion of which may be approved by the Director of Insurance. In the absence of such definition such term shall not include group insurance or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employers liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third-party liability coverage shall be included as other valid coverage.

(6) In lieu of the provisions set forth in subdivisions (3) through (5) of this section but subject to section 44-3,159, the insurer may at its option include a provision entitled COORDINATION OF BENEFITS which provides for nonduplication and coordination between two or more coverages based on rules and regulations adopted and promulgated by the director.

(7) A provision as follows: RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss-of-time benefits promised for the same loss under all valid loss-of-time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his or her average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time. The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (a) until at least age fifty or (b) in the case of a policy issued after age forty-four for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of valid loss-of-time coverage, approved as to form by the Director of Insurance, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada or to any other coverage the inclusion of which may be approved by the Director of Insurance or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute, including any workers' compensation or employers liability statute, or benefits provided by union welfare plans or by employer or employee benefit organizations.

(8) A provision as follows: UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.

(9) A provision as follows: CANCELLATION: The insurer may cancel this policy at any time by written notice delivered to the insured which shall be effective only if mailed by certified or registered mail to the named insured at his or her last-known address, as shown by the records of the insurer, at least thirty days prior to the effective date of cancellation, except that cancellation due to failure to pay the premium or in cases of fraud or misrepresentation shall not require that such notice be given at least thirty days prior to cancellation. Subject to any provisions in the policy or a grace period, cancellation for failure to pay a premium shall be effective as of midnight of the last day for which the premium has been paid. In cases of fraud or misrepresentation, coverage shall be canceled upon the date of the notice or any later date designated by the insurer. After the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.

(10) A provision as follows: ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.

(11) A provision as follows: INTOXICANTS AND NARCOTICS: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.

If any provision of sections 44-710.03 and 44-710.04 is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy of sickness and accident insurance, the insurer, with the approval of the Director of Insurance, shall omit from such policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.

The provisions which are the subject of sections 44-710.03 and 44-710.04 or any corresponding provisions which are used in lieu thereof in accordance with such sections shall be printed in the consecutive order of the provisions in such sections, or at the option of the insurer, any such provision may appear as a unit in any part of the policy of sickness and accident insurance with other provisions to which it may be logically related if the resulting policy is not in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.

The word insured, as used in sections 44-709 to 44-767, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy of sickness and accident insurance covering the insured or from being entitled under such a policy to any indemnities, benefits, and rights provided therein.

(1) Any policy of sickness and accident insurance of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision which is not less favorable to the insured or the beneficiary than the provisions of sections 44-709 to 44-767 and which is prescribed or required by the law of the state under which the insurer is organized.

(2) Any policy of sickness and accident insurance of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of such other state or country.

The Director of Insurance may adopt and promulgate such reasonable rules and regulations concerning the procedure for the filing or submission of policies of sickness and accident insurance subject to sections 44-709 to 44-767 as are necessary, proper, or advisable to the administration of such sections. This provision shall not abridge any other authority granted the Director of Insurance by law.

No policy provision which is not subject to sections 44-710.03 and 44-710.04 shall make a policy of sickness and accident insurance, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to sections 44-709 to 44-767.

A policy of sickness and accident insurance delivered or issued for delivery to any person in this state in violation of sections 44-709 to 44-767 shall be held valid but shall be construed as provided in such sections. When any provision in a policy subject to such sections is in conflict with any provision of such sections, the rights, duties, and obligations of the insurer, the insured, and the beneficiary shall be governed by the provisions of such sections.

The insured shall not be bound by any statement made in an application for a policy of sickness and accident insurance unless a copy of such application is attached to or endorsed on the policy when issued as a part thereof. If any such policy delivered or issued for delivery to any person in this state is reinstated or renewed and the insured or the beneficiary or assignee of such policy makes written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within fifteen days after the receipt of such request at its home office or any branch office of the insurer, deliver or mail to the person making such request a copy of such application. If such copy is not so delivered or mailed, the insurer shall be precluded from introducing such application as evidence in any action or proceeding based upon or involving such policy or its reinstatement or renewal.

No alteration of any written application for any policy of sickness and accident insurance shall be made by any person other than the applicant without his or her written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant.

The falsity of any statement in the application for any policy of sickness and accident insurance covered by sections 44-709 to 44-767 may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer.

The acknowledgment by an insurer of the receipt of notice given under any policy of sickness and accident insurance, the furnishing of forms for filing proofs of loss, the acceptance of such proofs, or the investigation of any claim thereunder shall not operate as a waiver of any of the rights of the insurer in defense of any claim arising under such policy.

If any policy of sickness and accident insurance contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.

No restrictive rider or endorsement which is attached to or is to become a part of any individual or franchise policy of sickness and accident insurance delivered or issued for delivery to any person in this state shall be effective unless each such restrictive rider or endorsement or specific request therefor is signed by the applicant, except that the signature of the applicant shall not be required on any endorsement applied to a policy by means of printing or stamping on the policy at the time of original issuance of the policy if notice of the endorsement is affixed on the face and filing back in contrasting color, in not less than twelve-point type. The term restrictive rider or endorsement as used in this section shall mean any rider or endorsement which reduces, restricts, or eliminates coverage of the policy of which the rider or endorsement is a part.

Except as provided in section 44-3608, every individual policy of sickness and accident insurance, except single-premium nonrenewable policies, shall have printed on its face or attached thereto a notice stating in substance that the person to whom the policy is issued shall be permitted to return the policy within ten days of its delivery to the purchaser and to have the premium paid refunded if, after examination of the policy, the purchaser is not satisfied with it for any reason. If a policyholder or a purchaser pursuant to such notice returns the policy to the insurer at its home office or branch office or to the agent or agency through which it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy had been issued.

(1) All individual and group policies of sickness and accident insurance providing coverage on an expense-incurred basis and health maintenance organization contracts shall provide benefits for newly born children of the insured or subscriber from the moment of birth.

(2) The coverage for newly born children shall consist of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities.

(3) A policy or contract may require that notification of birth of a newly born child and payment of the required premium or fees shall be furnished to the insurer or health maintenance organization within thirty-one days after the date of birth in order to have the coverage continue beyond such thirty-one-day period.

(4) The requirements of this section shall apply to all insurance policies and subscriber contracts delivered or issued for delivery in this state on or after January 1, 1995.

After the expiration of such thirty days from the filing of any such form, as provided in section 44-710, or at any time after having given written approval thereof, the director may, after a hearing of which at least ten days' written notice has been given to the insurer issuing such form, withdraw approval on any of the grounds stated in section 44-710. Such disapproval shall be effected by written order of the director which shall state the grounds for disapproval and the date, not less than thirty days after such hearing, when the withdrawal of approval shall become effective. An appeal from the decision of the Director of Insurance may be taken, and the appeal shall be in accordance with the Administrative Procedure Act.

(1) Any individual or group sickness and accident insurance policy or subscriber contract, any hospital, medical, or surgical expense-incurred policy, and any prepaid dental service plan that is issued for delivery, delivered, or renewed in this state, except policies that provide coverage for a specified disease or other limited-benefit coverage and health maintenance organization contracts, that provides for payment of claims based upon a specific methodology including, but not limited to, usual and customary charges, reasonable and customary charges, maximum benefit allowance, or charges based upon the prevailing rate in the community, shall provide that, upon request, a policyholder, certificate holder, covered dependent, or authorized representative shall be provided a written statement that includes a good faith estimate of the dollar amount of the allowable benefit for a service or procedure if the request includes information regarding any service or procedure to be performed by a nonpreferred provider, including any service or procedure code number or diagnosis related group provided by the health care provider and the health care provider's estimated charge.

(2) A statement requested pursuant to this section shall be sent to the policyholder, certificate holder, covered dependent, or authorized representative within ten business days after receipt of the request from the policyholder, certificate holder, covered dependent, or authorized representative.

(3) The insurer or other entity that provides a statement pursuant to and in compliance with this section shall not be bound by a good faith estimate, except that a pattern of providing estimates that vary significantly from the ultimate payment shall be an unfair claims settlement practice subject to the Unfair Insurance Claims Settlement Practices Act.

(1) For purposes of this section:

(a) Notwithstanding section 44-3,131, health insurance policy means (i) any individual or group sickness and accident insurance policy or subscriber contract delivered, issued for delivery, or renewed in this state and any hospital, medical, or surgical expense-incurred policy, except for a policy that provides coverage for a specified disease or other limited-benefit coverage, and (ii) any self-funded employee benefit plan to the extent not preempted by federal law;

(b) Jail means a city or county correctional or jail facility operated by a political subdivision of the state;

(c) Pending disposition of charges means up until the time of sentencing and shall not include any time after sentencing as may occur due to appeals; and

(d) Temporary custody means in the custody of a jail pending disposition of charges.

(2) Except as provided in subsection (4) of this section, an insurer offering a health insurance policy may not (i) cancel the coverage of an insured while the insured is in temporary custody on the basis of such custody or (ii) deny coverage for any medical services or supplies covered by the policy and received while the insured is in temporary custody if such services or supplies were provided to the insured by an employee or contractor of a jail who meets the credentialing criteria of the health insurance policy.

(3) Except as set forth under section 47-704, an insurer offering a health insurance policy shall pay claims for covered medical services or supplies provided by an out-of-network health care provider to an insured who is in temporary custody in an amount that is not less than one hundred percent of the medicare rate for such services or supplies. The political subdivision acting as an out-of-network provider shall notify the insurer of the cost incurred by the insured while in temporary custody.

(4) An insurer offering a health insurance policy may:

(a) Deny coverage for the treatment of injuries resulting from a violation of law by the insured;

(b) Exclude from any requirements for reporting quality outcomes or performance any covered medical services provided to an insured in temporary custody;

(c) Impose the same contractual provisions, including requirements for billing and medical coding, under the policy for medical services provided to insureds who are in temporary custody as imposed for medical services provided to insureds who are not in such custody;

(d) Deny coverage of diagnostic tests or health evaluations required as a matter of course for all individuals who are in temporary custody;

(e) Limit coverage of hospital and ambulatory surgical center services provided to an insured in temporary custody to medical services provided by in-network hospitals and ambulatory surgical centers;

(f) Deny coverage for costs of medical services made necessary by the negligence, recklessness, or intentional misconduct of the jail or its employees as set forth in section 47-705; and

(g) If an insured is incarcerated after the disposition of charges or is committed to the custody or supervision of the Department of Correctional Services, cancel coverage or deny coverage for any medical services or supplies covered by the plan and provided during such incarceration or while in the custody or supervision of the department.

(5) If an insured is incarcerated after the disposition of charges or is committed to the custody or supervision of the Department of Correctional Services, a jail which has sought reimbursement for medical services under this section shall notify the insurer that the insured has been subsequently incarcerated or placed in such custody.

(6)(a) An insurer may not refuse to credential a health care provider who is an employee or a contractor of a political subdivision on the basis that the employee or contractor provides medical services in a jail.

(b) If an insurer refuses to credential a health care provider who is an employee or a contractor of a political subdivision who provides medical services in a jail, the insurer must give written notice to the provider explaining the reasons for the refusal.

(7) This section shall not:

(a) Apply to coverage for an insured in custody following the disposition of charges;

(b) Impair any right of an employer to remove an employee from coverage under a health insurance plan;

(c) Release an insurer from the requirement to coordinate benefits for persons who are insured by more than one insurer; or

(d) Limit an insurer's right to rescind coverage in accordance with law.

(8) A political subdivision shall not pay health insurance policy premiums on behalf of a person who is in temporary custody.

(9) This section applies to health insurance policies issued or renewed on or after January 1, 2019, and to claims for reimbursement based on such policies for costs incurred on or after January 1, 2019.

(1) For purposes of this section:

(a) Health benefit plan means a policy, a contract, a certificate, or an agreement entered into, offered by, or issued by an insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services, including a vision or dental benefit plan. Health benefit plan shall not include any coverage pursuant to a liability insurance policy, including medical payments insurance issued as a supplement to a liability insurance policy, or a workers' compensation insurance policy; and

(b) Plan sponsor means:

(i) In the case of a health benefit plan established or maintained by a single employer, the employer;

(ii) In the case of a health benefit plan established or maintained by an employee organization, the employee organization; or

(iii) In the case of a health benefit plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the benefit plan.

(2) The plan sponsor of a health benefit plan may, on behalf of covered persons in the plan, provide the consent to the delivery of all communications related to the plan by electronic means and to the electronic delivery of any health insurance identification card if, before consenting on behalf of a covered person, a plan sponsor:

(a) Confirms that the covered person routinely uses electronic communications during the normal course of employment;

(b) Provides the covered person an opportunity to opt out of delivery by electronic means; and

(c) Follows all federal and state laws relating to the electronic delivery of such information or documents.