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NEVADA CONTRACTORS INSURANCE COMPANY, INC.

AND BUILDERS INSURANCE COMPANY, INC. in RECEIVERSHIP 

FREQUENTLY ASKED QUESTIONS AND ANSWERS

Below are frequently asked questions and answers (“FAQs”) for the receivership of Nevada Contractors Insurance Company, Inc. and Builders Insurance Company, Inc. (collectively 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 are 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.

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

Receivership is a protective measure established under Nevada insurance law whereby regulatory officials seize control of the company for the protection of its policyholders and creditors.  The Receiver and Special Deputy Receiver, through the Permanent Order, have been given the authority to run the affairs of the Companies in compliance with applicable Court orders and state of Nevada law.

Question 4: ARE RECEIVERSHIP AND LIQUIDATION THE SAME THING?
Answer:

No.  When a company is placed in liquidation, the Receiver is directed to wind down the company’s affairs and distribute its assets to its policyholders and creditors.  When the decision is made to liquidate an insurer, its policies and contracts are typically canceled or transferred to other insurers, and it eventually ceases doing business.  The Companies are not now in liquidation.

Question 5: ARE THE COMPANIES GOING TO BE PLACED IN LIQUIDATION?
Answer:

No determination or legal filing has been made to place the Companies into liquidation.  The financial condition of the Companies is being evaluated, and this determination will be made in the future.

Question 6: HOW WILL I KNOW IF THE COMPANIES ARE PLACED IN LIQUIDATION?
Answer: In the event that action is taken, notice will be provided to all known policyholders and claimants as required by law and may also be published in one or more newspapers of general circulation.  Updated information about the Companies’ affairs may also be found on the Companies’ web site at www.buildersinsuranceco.com.
Question 7: 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 insured claims when an insurer is placed into receivership and is unable (for a period of at least thirty (30) days) to make payments for policyholder claims.  The Guaranty Association Act applies to insurers that are member insurers, and Builders Insurance Company, Inc. was a member of the Nevada Insurance Guaranty Association.   

The Nevada Insurance Guaranty Association may and should pay claims of Builders Insurance Company, Inc. 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 has been triggered for Builders Insurance Company, Inc.’s claims because the Court has placed a forty-five (45) day moratorium on the payment of secured claims, insurance policy claims, and creditor claims.  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 Builders Insurance Company, Inc. may and should be eligible for payment by the guaranty association.  The Nevada Insurance Guaranty Association will not cover workers’ compensation claims that newly arise (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.

Question 8: ARE THE COMPANIES ISSUING NEW INSURANCE POLICIES?
Answer: No.  The Court’s Permanent Order placing the Companies in receivership permanently enjoins the Companies from writing any new business.
Question 9: WHAT IS THE STATUS OF MY PENDING CLAIM FILED WITH THE COMPANIES?
Answer: Although the Companies continue to accept and process all claims filed with the Companies, the Court has prohibited the Companies from paying any secured claims, insurance policy claims, or creditor claims of the Companies for a time period of forty-five (45) days from the date of the Permanent Order or until further order of the Court.  As mentioned earlier, for Builders Insurance Company, Inc., the Nevada Insurance Guaranty Association may and should be paying the Companies’ workers’ compensation claims subject to eligibility and other exclusions to coverage.
Question 10: HOW DO I PRESENT CLAIMS THAT I HAVE UNDER ONE OF THE COMPANIES’ POLICIES?
Answer:

Claims for coverage may be submitted to the Companies by e-mail, fax, or postal mail using the following:

Builders Insurance Company, Inc.

P.O. Box 400460

Las Vegas Nevada 89113-9998

(702) 678-6780 Telephone

(702) 678-6781 Fax

However, in regard to the payment of continuing medical or indemnity payments, as to which you may be entitled to workers’ compensation benefits (or insurance defense costs related to workers’ compensation claims) provided by Builders Insurance Company, Inc., see the answer to question 13 below for the proper address of where to submit your claim and reimbursement information.

Question 11: 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 and/or canceled, effective May 18, 2013.
Question 12: SHOULD I CONTINUE TO PAY MY PREMIUMS?
Answer: Insurance premiums must be paid to assure that your insurance policy remains in force through May 18, 2013, which is the insurance policy cancellation date ordered by the Court.  Non-payment of premium may cause your policy to be canceled at an earlier date than May 18, 2013, and this may impact your distributions from the Companies’ receivership estate, and it may also impact the Nevada Insurance Guaranty Association’s coverage for any Builders Insurance Company, Inc. claims incurred because of an earlier policy termination date.  You will still be responsible for any additional premiums owed to the Companies for prior insurance coverage, whether that is determined through premium audits or otherwise.
Question 13: CLAIM QUESTIONS:  WHERE SHOULD I SUBMIT WORKERS’ COMPENSATION CLAIMS INCLUDING WORKERS’ COMPENSATION SETTLEMENTS, JUDGMENTS, INDEMNITY PAYMENTS, MEDICAL COSTS, AND DEFENSE COSTS ARISING UNDER WORKERS’ COMPENSATION POLICIES?
Answer:

All claims should be submitted to the third-party administrator (“TPA”) that is handling the workers’ compensation claims for the Nevada Insurance Guaranty Association, and these claims should be submitted to the following address: 

S & C Claims Services, Inc.

9075 W. Diablo Drive, Suite 140

Las Vegas, Nevada  89148

(702) 876-5584 Fax

Question 14: I HAVE AN OLD CLAIM, BUT I NOW REQUIRE ADDITIONAL MEDICAL TREATMENT OR AM EXPERIENCING ADDITIONAL DISABILITY.  HOW DO I GO ABOUT GETTING MEDICAL TREATMENT AND/OR GETTING MY BENEFITS STARTED AGAIN?
   
Answer: If you have a claim that was properly reported to the Companies, you should notify the Companies, at the address as noted in question and answer number ten above, of your desire to reopen the claim and send in any documentation you have.  The claims department will review your claim and determine what can be done to assist you.  In many cases, the claim will be assigned to the Nevada Insurance Guaranty Association for review and payment subject to applicable restrictions and conditions.
Question 15: I AM RECEIVING MY WORKERS’ COMPENSATION BENEFITS NOW, BUT WILL I CONTINUE TO RECEIVE THEM IN THE FUTURE?
Answer: As mentioned in question and answer number seven above, the Nevada Insurance Guaranty Association may and should pay the workers’ compensation claims of Builders Insurance Company, Inc. subject to eligibility and exclusions for certain coverage.
Question 16: HOW MAY I CONTACT THE NEVADA INSURANCE GUARANTY ASSOCIATION ABOUT MY WORKERS’ COMPENSATION CLAIM AND WHETHER IT WILL BE COVERED BY THE ASSOCIATION?
Answer:

You may contact the Nevada Insurance Guaranty Association as follows: 

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:  www.niga-pc.org

Question 17: IF A SETTLEMENT WAS MADE IN A CASE PRIOR TO RECEIPT OF THE INSTRUCTION TO CEASE PAYMENTS BY THE COURT, IS THAT SETTLEMENT TO BE HONORED AND PAYMENT MADE?
Answer: If the Companies agreed to a settlement, they are bound to the payment amount and the insured will have a claim for that amount, but the Court has imposed a forty-five (45) day moratorium on claim payments which may be further extended by the Court.  That said, for workers’ compensation claim payments, the Nevada Insurance Guaranty Association will decide whether such settlement will be honored and paid by the association.
Question 18: IF AN INSURED TOOK OVER THE DEFENSE OF A CLAIM COVERED BY HIS OR HER 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, when legal costs are incurred in defending a claim that is covered by the Companies’ insurance policy, the cost will be considered an insurance policy benefit claim, provided that the insurance policy provides coverage for insurance defense costs.  You should submit a claim for the defense cost to the Companies.  For workers’ compensation defense cost claims, the Companies will forward your defense cost claim to the Nevada Insurance Guaranty Association, and the association will determine whether the defense costs should be reimbursed.  For all other defense cost claims, the Court has imposed a forty-five (45) day moratorium on claim payments which may be further extended by the Court.
Question 19: 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.
THE RECEIVERSHIP APPEAL PROCEDURE FOR THE ADJUDICATION AND APPEAL OF CLAIMS DECISIONS:
Question 20: 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.  It is expected that the Court will approve claim adjudication and appeal procedures in the coming weeks.  This web site will be updated with further information about claim adjudication and appeal procedures before the Court.  For now, claims should be submitted to the Companies as noted in question and answer number ten above, and the Receiver or Special Deputy Receiver will soon advise you of claim adjudication and appeal procedures.

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