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NEVADA CONTRACTORS INSURANCE COMPANY, INC.

AND BUILDERS INSURANCE COMPANY, INC. in LIQUIDATION 

FREQUENTLY ASKED QUESTIONS AND ANSWERS

Below are frequently asked questions and answers (“FAQs”) for the liquidation of Nevada Contractors Insurance Company, Inc.("NCIC") and Builders Insurance Company, Inc.(BIC) (collectively NCIC ad BIC referred to as the “Companies”).  The FAQs are meant as a general guide, and you should feel free to contact the Companies, at the address or telephone mentioned in question and answer ten below, if you have further questions.

Question 1:     

 WHAT IS THE STATUS OF THE COMPANIES?
Answer:

On March 15, 2013, in a case styled State of Nevada ex rel. Commissioner of Insurance, in his Official Capacity as Statutory Receiver for Delinquent Domestic Insurer vs. Nevada Contractors Insurance Company Inc. and Builders Insurance Company Inc., Case No. A-13-678046, Dept. No. XI, the Eighth Judicial District Court of Nevada (“Court”) issued its Order Granting Temporary Injunctive Relief Pursuant to NRS 696B.270(1) appointing the Commissioner of Insurance for the state of Nevada (“Commissioner”) as Temporary Receiver for the Companies. 

Further, on April 18, 2013, the Court entered its Order Appointing Commissioner as Permanent Receiver for Nevada Contractors Insurance Company Inc. and Builders Insurance Company Inc. and granting other permanent relief (the “Permanent Order”).  Pursuant to the terms of the Permanent Order, the Commissioner was appointed Permanent Receiver (“Receiver”), and the firm of Cantilo & Bennett, L.L.P. was appointed Special Deputy Receiver, of the Companies.  As provided by the Permanent Order, the Receiver and Special Deputy Receiver (SDR) of the Companies in the Permanent Order. 

On April 30, 2019, the Court entered its order (i.e., the “Court’s April 30, 2019 Order”) declaring the Companies to be insolvent, placing the Companies into liquidation, and establishing a final claims filing deadline. Under the Court’s April 30, 2019 Order, the Receiver and SDR were authorized to conduct the business of the Companies and to administer their affairs for the protection of all secured creditors, insureds, policyholders, and general creditors. Such authorization includes the authority to handle and adjudicate claims asserted against the Companies, except that claims under workers’ compensation insurance policies of BIC are being handled by the Nevada Insurance Guaranty Association. Furthermore, the Permanent Order, and the Court’s April 30, 2019 Order placing the Companies into “Liquidation,” prohibit the Receiver, the SDR, and their representatives from paying any secured claims, insurance policy claims, or creditor claims until further order of the Court. Updates for the Companies’ liquidation are available by visiting the Companies’ web site www.buildersinsurnaceco.com, for more information.

Question 2: WHY WAS IT NECESSARY TO PLACE THE COMPANIES IN RECEIVERSHIP?
Answer:

The Court, through its Permanent Order found and declared, and through its April 30, 2019 Order confirmed, that NCIC and BIC are insolvent based on the grounds the Companies are unable to meet their respective obligations. The Court additionally placed the Companies into liquidation, thereby authorizing the Receiver and SDR to liquidate the business of the Companies and wind up their ceased operations.

Question 3: HAVE THE COMPANIES BEEN PLACED INTO LIQUIDATION, AND WHAT DOES LIQUIDATION MEAN?
Answer:

Yes, the Court has placed the Companies into liquidation. Liquidation is the final phase of a receivership proceeding during which the Receiver winds up the ceased operations of the company. During this phase of the receivership, the Receiver, among other things, continues to handle and adjudicate claims pursuant to the receivership claims and appeal procedure, which culminates in the distribution of the companies’ remaining assets. Not all claims against the companies in liquidation will be paid if there are insufficient assets to satisfy such claims, which in such case would result in only a percentage of each of the claims being paid, if at all.

Question 4: IS THERE A CLAIMS FILING DEADLINE BY WHICH ALL CLAIMS AGAINST BIC AND NCIC MUST BE SUBMITTED TO THE SDR (AND LIQUIDATED)?
Answer:

Yes. The claims filing deadline, by which all claims against BIC and/or NCIC must be submitted to the SDR, is October 28, 2019. However, claims for which proofs of claim have already been submitted to the receivership/SDR for NCIC or BIC should not be resubmitted, unless it is solely to make the claim absolute (i.e., both non-contingent and liquidated in amount). No claim received by the SDR after the claims filing deadline, except those workers’ compensation claims of BIC covered and paid directly by the Nevada Insurance Guaranty Association, will be paid. No claim that is not rendered absolute (i.e., both non-contingent and liquidated in amount), except those claims of the Nevada Insurance Guaranty Association against BIC, may share in the Companies’ assets. Further, prior claim determinations made by the SDR, as to previously submitted proofs of claim, are final claim determinations and will not be reopened during the claims filing deadline. Approved workers’ compensation claims will continue to be paid by the Nevada Insurance Guaranty Association or its successor, subject to eligibility and other exclusions to coverage determined by the guaranty association.

Question 5: DOES ANY PROVISION CONTAINED IN THE COURT’S PERMANENT ORDER TRIGGER THE APPLICABILITY OF THE NEVADA INSURANCE GUARANTY ASSOCIATION?
Answer: First, as background, the Nevada Insurance Guaranty Association provides a safety net for the payment of workers’ compensation insured claims when an insurer is placed into receivership and is unable (for a period of at least thirty days) to make payments for policyholder claims. The state of Nevada’s Guaranty Association Act applies to insurers that are member insurers, and BIC was a member of the Nevada Insurance Guaranty Association.  

In direct response to Question 5 – yes, the Court’s Permanent Order did indeed trigger the applicability of the Nevada Insurance Guaranty Association for workers’ compensation claims against BIC. As a result of this action by the Court, the provisions of the Guaranty Association Act, Title 57 of the Nevada Revised Statutes, were triggered, and consequently, claims under workers’ compensation insurance policies issued by BIC are eligible for payment by the Nevada Insurance Guaranty Association, subject to eligibility of insurance coverage and other exclusions of coverage as provided in the Guaranty Association Act (i.e., as provided by the Guaranty Association Act provisions of Title 57 of the Nevada Revised Statutes)  

The Nevada Insurance Guaranty Association will not, however, cover workers’ compensation claims that newly arose (i.e., new injuries that do not relate to a prior claim) after May 18, 2013, because the Court, through its Permanent Order, further ordered that all of the Companies’ policies and contracts of insurance will be canceled as of that date. NCIC, which is licensed as a captive insurer under Nevada law, is not a member of the Nevada Insurance Guaranty Association; therefore, the Nevada Insurance Guaranty Association will not pay the insurance claims or defense costs for NCIC. . 

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Question 6: WHAT IS THE STATUS OF MY PENDING CLAIM FILED WITH THE COMPANIES??
Answer: The Companies, through the SDR, have continued to evaluate and process all claims filed with the Companies, but the Court has prohibited the Companies from paying any secured claims, insurance policy claims, or creditor claims of the Companies from the date of the Permanent Order until further order of the Court. As mentioned earlier, for BIC, the Nevada Insurance Guaranty Association may and should be paying the Companies’ workers’ compensation claims subject to eligibility and other exclusions to coverage. For guidance regarding the procedure for submitting claims to the SDR, see the Answer to Question 4 and Question 7 of these FAQs. Importantly, claims submitted to the SDR must be absolute (i.e., both non-contingent and liquidated in amount) and submitted to the SDR by the claims filing deadline.
Question 7: HOW DO I PRESENT CLAIMS THAT I HAVE UNDER ONE OF THE COMPANIES’ POLICIES?
Answer: As stated in the Answer to Question 4 of these FAQs, there is a claims filing deadline of October 28, 2019, by which all claims against BIC and/or NCIC must be submitted to the SDR. However, claims for which proofs of claim have already been submitted to the receivership/SDR should not be resubmitted, unless it is solely to make the claim absolute (i.e., both non-contingent and liquidated in amount). No claim received by the SDR after the claims filing deadline, except those claims received directly by the Nevada Insurance Guaranty Association for workers' compensation claims of BIC, may share in a distribution of the Companies' assets. No claim that is not rendered absolute (i.e., both non-contingent and liquidated in amount), except those claims covered by the Nevada Insurance Guaranty Association, will produce estate liabilities and share in the Companies' assets. Further, claim determinations made by the SDR, as to previously submitted proofs of claim, are final claim determinations, and these prior claim determinations will not be reopened by the SDR. Approved workers' compensation claims will continue to be paid directly by the Nevada Insurance Guaranty Association or its successor, subject to eligibility and other exclusions to coverage. All workers' compensation claims against BIC should be submitted directly to the Nevada Insurance Guaranty Association (and not to the SDR of BIC) at the following address:

Nevada Insurance Guaranty Association

3821 W. Charleston Boulevard, Suite 100

Las Vegas, Nevada  89102

(702) 368-0607 Telephone

(800) 964-7882 Toll Free

(702) 368-2455 Fax

E-mail:      service@niga-pc.org

Web Site:  http://www.niga-pc.org


All claims against NCIC and non-workers' compensation claims against BIC must be submitted to the Companies by fax or postal mail using the following:

Builders Insurance Company, Inc.

.P.O. Box 400460

Las Vegas Nevada 89113-9998

(512) 478-6000 Telephone

(512) 404-6550 Fax


All claims must be submitted to the SDR by using the approved proof of claim form (i.e., as approved by the SDR) for claims against the Companies. You can obtain this proof of claim form through the Companies' web site www.buildersinsurnaceco.com (under the tab "Important Receivership Claim Documents"), or by contacting the SDR using the above-referenced contact information.
Question 8: DID THE PERMANENT ORDER OF RECEIVERSHIP CANCEL THE COMPANIES’ INSURANCE POLICIES?
Answer: Yes. The Court, through its Permanent Order, ordered that all of the Companies’ insurance policies and contracts of insurance are terminated effective May 18, 2013
Question 9: I AM RECEIVING MY WORKERS’ COMPENSATION BENEFITS NOW, BUT WILL I CONTINUE TO RECEIVE THEM IN THE FUTURE?
Answer:

As mentioned in the Answer to Question 5 above, the Nevada Insurance Guaranty Association may, and should, pay the workers’ compensation claims of BIC, subject to eligibility and exclusions for certain coverage

Question 10: IF AN INSURED TOOK OVER THE DEFENSE OF A CLAIM COVERED BY AN NCIC INSURANCE POLICY AFTER THE COMPANIES WERE PLACED IN RECEIVERSHIP , AND HAS PAID, OR IS PAYING, HIS OR HER OWN LEGAL COSTS, WILL THE INSURED BE REIMBURSED FOR THOSE COSTS FROM THE RECEIVERSHIP ESTATE?
Answer:  Generally, if legal costs are incurred in defending a claim that is covered by an insurance policy issued by NCIC’s insurance policy, the cost will be considered an insurance policy benefit claim, provided that the insurance policy provides coverage for insurance defense costs. In the case of a claim for defense costs covered by an NCIC insurance policy, you should submit the claim to the SDR. The claim will be evaluated and processed by the Receiver so long as the claim is submitted to the SDR on or before the October 28, 2019, claims filing deadline. For guidance regarding the procedure for submitting claims to the SDR, see question and the Answer to Question 4 and Question 7 of these FAQs.
Question 11: IS THERE AN INJUNCTION FROM COMMENCING, BRINGING, MAINTAINING, OR FURTHER PROSECUTING ANY ACTION AT LAW, SUIT IN EQUITY, ARBITRATION, OR SPECIAL OR OTHER PROCEEDING AGAINST THE COMPANIES, RECEIVER, OR SPECIAL DEPUTY RECEIVER?
Answer: Yes, the Permanent Order of receivership provides that all persons are enjoined from commencing, bringing, maintaining, or further prosecuting any action at law, suit in equity, arbitration, or special or other proceeding against the Companies, Receiver, or Special Deputy Receiver; thus, all of this litigation is stayed by court order.
Question 12:   IF I AM DISSATISFIED WITH THE DECISION MADE BY THE RECEIVER OR SPECIAL DEPUTY RECEIVER ON MY CLAIM, DO I HAVE A RIGHT TO APPEAL THAT DECISION?
Answer:

Yes, you have the right to appeal that decision. The Court has approved a Receivership Claims and Appeal Procedure. This web site provides further information about the Receivership Claims and Appeal Procedure. Claimants against the Companies should review and familiarize themselves with the referenced Receivership Claims and Appeal Procedure to better understand their rights regarding any claims they may have against the Companies. You can obtain this through the Companies' web site www.buildersinsurnaceco.com(under the tab "Important Receivership Claim Documents"), or by contacting the SDR using the contact information herein.

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