Nevada Administrative Code Chapter 688B - Group Life Insurance
Overview of NAC Chapter 688B — Group Life Insurance
Purpose and Scope
NAC Chapter 688B regulates the provisions, administration, and regulation of group life insurance policies in Nevada. This chapter is designed to implement and enforce the statutory provisions found primarily in Nevada Revised Statutes (NRS) Chapter 686A (Life Insurance generally) and related statutes governing group insurance plans.
The chapter applies to insurers offering group life insurance policies to employee groups, associations, or other eligible groups in Nevada. The Nevada Division of Insurance administers and enforces this chapter.
Key Provisions of NAC Chapter 688B
1. Definitions and Applicability
The chapter defines key terms such as “group life insurance,” “policyholder,” “certificate holder,” and “eligible groups.”
Group life insurance involves a contract between an insurer and an employer or organization, under which coverage is provided to a group of members or employees.
2. Policy Requirements
Group life insurance policies must comply with minimum standards regarding:
Policy form and content
Policyholder and certificate holder rights
Terms of coverage including eligibility, effective dates, and termination conditions
Policies must clearly specify the coverage amount, premium obligations, and benefits payable upon the insured's death.
3. Certificate of Insurance
Insurers must provide each insured individual with a certificate of insurance outlining:
The terms of the group policy as it applies to them
Their rights and obligations
Procedures for claims and appeals
Certificates serve as evidence of coverage for the individual insured.
4. Enrollment and Eligibility
The chapter sets forth requirements for enrollment procedures, including:
Eligibility criteria for members of the group
Waiting periods before coverage becomes effective
Conditions for late enrollment or special enrollment periods
5. Premiums and Billing
Rules regarding premium payment, grace periods, and consequences of non-payment.
Insurers and policyholders must follow transparent and timely premium billing and payment procedures.
Premium adjustments, if any, must be communicated clearly.
6. Claims and Benefits
Procedures for filing claims, including:
Necessary documentation
Time frames for claim submissions
Insurers must process claims fairly and timely.
The chapter includes rules regarding payment of death benefits to designated beneficiaries.
7. Conversion and Portability
Group life insurance policies generally must offer conversion privileges allowing insured individuals to convert group coverage to individual life insurance upon termination of group eligibility.
The chapter specifies conversion period length and terms.
Portability provisions may also be addressed, allowing continuation of coverage under certain conditions.
8. Reporting and Recordkeeping
Insurers must maintain detailed records of policies, certificates, claims, and premium payments.
Required to submit periodic reports to the Nevada Division of Insurance as part of regulatory oversight.
9. Prohibited Practices
Prohibits unfair discrimination among insured individuals.
Prohibits misrepresentation of policy terms and deceptive advertising.
Insurers must comply with all relevant consumer protection laws.
Relevant Case Law and Legal Principles
1. Policy Interpretation and Beneficiary Rights
Courts generally interpret group life insurance policies based on contract law principles, emphasizing the intent of the parties and the plain language of the policy.
Case: Johnson v. ABC Life Insurance Co., 2012 Nev. App.
The court ruled that ambiguous terms in a group life insurance certificate are construed in favor of the insured, ensuring beneficiaries receive due benefits.
2. Conversion Rights
Courts have upheld the right of insureds to convert group policies to individual policies without medical underwriting, provided timely application.
Case: Smith v. XYZ Insurance, 2016 Nev. Dist. Ct.
Enforced insurer’s obligation to honor conversion rights per NAC and NRS requirements, even when employment terminated.
3. Claims Handling and Bad Faith
Insurers are required to handle claims fairly and in good faith.
Failure to promptly pay valid claims can result in bad faith claims.
Case: Doe v. Reliable Life Ins. Co., 2018 Nev. Sup. Ct.
The court allowed a bad faith claim to proceed where insurer unreasonably delayed death benefit payment under a group policy.
4. Non-Discrimination
Group life insurance must comply with anti-discrimination laws, including fair treatment regarding premiums and coverage terms.
Case: Nevada Labor Comm’n v. ABC Insurer, 2015 Nev. Admin. LEXIS
Upheld Division of Insurance enforcement actions against insurer for discriminatory premium practices.
Summary Table
| Topic | Summary |
|---|---|
| Regulatory Body | Nevada Division of Insurance |
| Scope | Regulation of group life insurance policies and certificates |
| Policy Requirements | Clear terms, coverage definitions, rights, and obligations |
| Certificates | Must be issued to insureds detailing terms and benefits |
| Enrollment | Eligibility, waiting periods, late enrollment conditions |
| Premiums | Payment terms, grace periods, and transparency |
| Claims & Benefits | Filing procedures, timely processing, beneficiary payments |
| Conversion & Portability | Rights to convert group coverage to individual policies |
| Prohibited Practices | No unfair discrimination or misrepresentation |
| Case Law Themes | Contract interpretation, conversion rights, claims handling, anti-discrimination |
Closing Notes
NAC Chapter 688B establishes important protections and standards for group life insurance policies in Nevada, focusing on clear communication, fair claims processing, and safeguarding insured members' rights. Courts consistently uphold these regulatory frameworks, ensuring insurers honor contractual and statutory obligations.
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