Repeals certain provisions which prohibit an insurer from issuing or renewing certain policies of liability insurance. (BDR 57-643)
Summary
AB 206 repeals a specific provision of Nevada insurance law that currently bars insurers from issuing or renewing certain liability insurance policies with “defense within limits” or similar terms. Under existing law, liability policies cannot reduce the stated liability limit by the costs of defense, legal fees, and other claim-related expenses, and cannot otherwise limit coverage for those costs. This bill removes that prohibition by repealing NRS 679A.210.
If enacted, the bill would allow insurers greater flexibility to offer liability policies that include policy language shifting defense costs and related expenses into the coverage limits, or otherwise restricting separate coverage for those expenses. The bill does not create a new regulatory program or mandate; instead, it eliminates an existing consumer protection rule in the Nevada Insurance Code.
Impact
AB 206 would amend Nevada insurance law by deleting NRS 679A.210 from the Nevada Revised Statutes. The practical effect is to permit liability insurance policies that reduce available policy limits by defense costs and related legal expenses, or that otherwise limit coverage for those expenses, where such provisions are currently prohibited. This change would primarily affect insurers, policyholders, and insured entities purchasing liability coverage, especially in commercial and professional liability markets.
Sentiment
There is no recorded committee transcript or vote history provided for AB 206, so the available context does not show formal support or opposition. Based on the bill text alone, the measure appears to favor insurers and policy flexibility rather than maintaining the current consumer protection standard. Because no discussion or votes are included, the overall sentiment cannot be assessed beyond the bill’s straightforward deregulatory purpose.
Contention
The central point of contention is likely whether Nevada should continue prohibiting liability policies that erode limits with defense costs, or instead allow insurers to sell such coverage structures. Supporters would likely argue the bill expands market options and aligns policy terms with insurer and purchaser preferences, while opponents would likely view it as weakening protections for insureds by allowing policy limits to be consumed by defense expenses. No specific legislators, stakeholders, or committee concerns are identified in the provided materials.