1.  The Association:

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(a) Except as otherwise provided in paragraph (b), is obligated to the extent of the covered claims existing before the determination of insolvency and arising within 30 days after the determination of insolvency, or before the expiration date of the policy if that date is less than 30 days after the determination, or before the insured replaces the policy or on request cancels the policy if the insured does so within 30 days after the determination. The obligation of the Association to pay a covered claim is limited to the payment of:

(1) The entire amount of the claim, if the claim is for workers’ compensation pursuant to the provisions of chapters 616A to 616D, inclusive, or chapter 617 of NRS;

(2) Not more than $10,000 for each policy if the claim is for the return of unearned premiums; or

(3) The limit specified in a policy or $300,000, whichever is less, for each occurrence for any covered claim other than a covered claim specified in subparagraph (1) or (2).

(b) Is not obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. Any obligation of the Association to defend an insured on a covered claim ceases upon the Association’s:

(1) Payment, by settlement releasing the insured or on a judgment, of an amount equal to the lesser of the Association’s covered claim obligation limit or the applicable policy limit; or

(2) Tender of the amount described in subparagraph (1). If the Association determines that there may be more than one claimant having a covered claim or allowed claim against the Association, or against any associations similar to the Association in other states, under the policy or policies of any one insolvent insurer, the Association may establish a plan to allocate amounts payable by the Association in such a manner as the Association in its discretion deems equitable.

(c) Shall be deemed the insurer to the extent of its obligations on the covered claims and to that extent has any rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent. The rights include, without limitation, the right to seek and obtain any recoverable salvage and to subrogate a covered claim, to the extent that the Association has paid its obligation under the claim. The Association shall not be deemed to be the insolvent insurer for any purpose relating to the issue of whether the Association is amenable to the personal jurisdiction of the courts of any state.

(d) Shall assess member insurers amounts necessary to pay the obligations of the Association pursuant to paragraph (a) after an insolvency, the expenses of handling covered claims subsequent to an insolvency and other expenses authorized by this chapter. The assessment of each member insurer must be in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment bear to the net direct written premiums of all member insurers for the same calendar year. Each member insurer must be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year an amount greater than 2 percent of the net direct written premiums of that member insurer for the calendar year preceding the assessment. If the maximum assessment, together with the other assets of the Association, does not provide in any 1 year an amount sufficient to make all necessary payments, the money available may be prorated and the unpaid portion must be paid as soon as money becomes available. The Association may pay claims in any order, including the order in which the claims are received or in groups or categories. The Association may exempt or defer, in whole or in part, the assessment of any member insurer if the assessment would cause the financial statement of the member insurer to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. During the period of deferment, no dividends may be paid to shareholders or policyholders. Deferred assessments must be paid when payment will not reduce capital or surplus below required minimums. Payments must be refunded to those companies receiving larger assessments because of deferment, or, in the discretion of the company, credited against future assessments. Each member insurer must be allowed a premium tax credit for any amounts paid pursuant to the provisions of this chapter at the rate of 20 percent per year for 5 successive years beginning with the calendar year following the calendar year in which the assessments are paid.

(e) Shall investigate claims brought against the fund and adjust, compromise, settle and pay covered claims to the extent of the obligation of the Association and deny any other claims. The Association has the right to appoint and to direct legal counsel retained under liability insurance policies for the defense of covered claims.

(f) Is not bound by a release, compromise, waiver, unfunded settlement or judgment executed or entered into within 12 months before an order of liquidation and has the right to assert all defenses available to the Association, including, without limitation, defenses applicable to determining and enforcing its statutory rights and obligations to an applicable claim. The Association is bound by a release, compromise, waiver, settlement or judgment executed or entered into more than 1 year before an order of liquidation if an applicable claim is a covered claim and such settlement or judgment was not a result of fraud, collusion, default or failure to defend. With regard to a covered claim arising from a judgment under a decision, verdict or finding based on the default of the insolvent insurer or the insurer’s failure to defend, the Association, either on its own behalf or on behalf of an insured, may apply to have such judgment, order, decision, verdict or finding set aside by the same court or administrator that made such judgment, order, decision, verdict or finding and must be permitted to defend such claim on the merits.

(g) Shall notify such persons as the Commissioner directs pursuant to paragraph (a) of subsection 2 of NRS 687A.080.

(h) Shall act on claims through its employees or through one or more member insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the Commissioner, but the designation may be declined by a member insurer.

(i) Shall reimburse each servicing facility for obligations of the Association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the Association and pay the other expenses of the Association authorized by this chapter.

2.  The Association may:

(a) Appear in, defend and appeal any action on a claim brought against the Association.

(b) Employ or retain persons necessary to handle claims and perform other duties of the Association.

(c) Borrow money necessary to carry out the purposes of this chapter in accordance with the plan of operation.

(d) Sue or be sued. Such power to sue includes, without limitation, the power and right to intervene as a party before any court in this State that has jurisdiction over an insolvent insurer.

(e) Negotiate and become a party to contracts necessary to carry out the purposes of this chapter.

(f) Establish procedures for requesting financial information from insureds and claimants on a confidential basis for the purposes of applying sections concerning the net worth of first-party and third-party claimants, subject to such information being shared with any other association similar to the Association and the liquidator for the insolvent insurer on the same confidential basis. If the insured or claimant refuses to provide the requested financial information and an auditor’s certification of the same where requested and available, the Association may deem the net worth of the insured or claimant to be in excess of $10,000,000 or $25,000,000, as applicable, at the relevant time.

(g) Bring an action against any third-party administrator, agent, attorney or other representative of the insolvent insurer to obtain custody and control of all files, records and electronic data related to an insolvent insurer that are appropriate or necessary for the Association, or a similar association in other states, to carry out its duties under this chapter. In such an action, the Association has the absolute right through emergency equitable relief to obtain custody and control of all such files, records and electronic data in the custody or control of such third-party administrator, agent, attorney or other representative of the insolvent insurer, regardless of where such files, records and electronic data may be physically located. In bringing such an action, the Association is not subject to any defense, possessory lien or other lien or other legal or equitable ground whatsoever for refusal to surrender such files, records and electronic data that might be asserted against the liquidator of the insolvent insurer. To the extent that litigation is required for the Association to obtain custody of the files, records and electronic data requested and such litigation results in the relinquishment of files, records and electronic data to the Association after refusal to provide the same in response to a written demand, the court shall award the Association its costs, expenses and reasonable attorney’s fees incurred in bringing the action. The provisions of this paragraph have no effect on the rights and remedies the custodian of such files, records and electronic data may have against the insolvent insurer, so long as such rights and remedies do not conflict with the rights of the Association to custody and control of the files, records and electronic data.

(h) Perform other acts necessary or proper to effectuate the purposes of this chapter.

(i) Perform any administrative acts requested by the Commissioner in furtherance of the purposes of this title and, if the cost of the action is not paid for by the Association or its member insurers, the Nevada Industrial Insurance Act.

(j) If, at the end of any calendar year, the Board of Directors of the Association finds that the assets of the Association exceed its liabilities as estimated by the Board of Directors for the coming year, refund to the member insurers in proportion to the contribution of each that amount by which the assets of the Association exceed the liabilities.

(k) Subject to approval by the Commissioner, provide claims handling services to any run-off insurer if the Association’s expenses related thereto are fully reimbursed. There is no liability on the part of, and no cause of action of any nature may arise against, any member insurer, the Association or its agents or employees, the Board of Directors of the Association or any person serving as a representative of any director for any action taken or any failure to act by them in the performance of their activities under this paragraph. As used in this paragraph, ‘run-off insurer’ means a property and casualty insurer that has, as determined pursuant to NRS 681B.550 and regulations adopted pursuant thereto:

(1) Total adjusted capital under risk-based capital requirements in an amount less than the authorized control level of risk-based capital as of the end of the preceding year and that has indicated that it will cease writing new insurance policies, either as part of its corrective action plan or pursuant to being placed under regulatory control; or

(2) Total adjusted capital under risk-based capital requirements in an amount less than the mandatory control level of risk-based capital as of the end of the preceding year and that has not been placed into liquidation.

(l) Assess each member insurer equally not more than $1,000 per year for administrative expenses not related to the insolvency of any insurer.

3.  With regard to an action involving the Association:

(a) Except for an action by a member insurer aggrieved by a final action or decision of the Association pursuant to paragraph (d) of subsection 1, an action relating to or arising out of this chapter against the Association must be brought in a district court of the State of Nevada. The courts of the State of Nevada have exclusive jurisdiction over all actions relating to or arising out of this chapter against the Association.

(b) Exclusive venue in an action by or against the Association is in the courts of the State of Nevada. The Association may, at the option of the Association, waive such venue as to a specific action.

(c) In any action contesting the applicability of paragraph (g) or (h) of subsection 2 of NRS 687A.033 in which the insured or claimant has declined to provide financial information under the procedure provided in the plan of operation submitted pursuant to NRS 687A.070, the insured or claimant bears the burden of proof concerning its net worth at the relevant time. If the insured or claimant fails to prove that its net worth at the relevant time was less than the applicable amount, the court shall award the Association its full costs, expenses and reasonable attorney’s fees in contesting the claim.