AB332 aims to update industrial insurance rules; sponsors seek repeal of payroll cap and opt‑out from subsequent‑injury fund for groups

The Assembly Committee on Commerce and Labor heard Assembly Bill 332, a broad package of amendments to Nevada’s industrial insurance laws, sponsored by Assemblymember P.K. O’Neil. Supporters described the bill as modernization and "house‑cleaning" for statutes that regulate self‑insured employer groups, bonding and the subsequent‑injury account.

Richard Staub, interim CEO of Pro Group Management (which administers multiple self‑insured employer associations), outlined several requested changes: clarifying the definition and role of an association administrator; ensuring bonding requirements are not duplicated between industrial‑insurance law and the insurance code; allowing association self‑insured groups to opt out of the subsequent‑injury account and run their own internal processes to reimburse claims associated with preexisting conditions; repealing a payroll cap that currently limits premium collection to $36,000 of an employee’s wages; and removing an obsolete audit statute tied to standard industrial classification (SIC) codes.

Staub said duplicative bonding obligations recently forced groups to maintain two identical bonds (one under the insurance code and one under industrial‑insurance statutes), and he asked the committee to restore a long‑standing offset that had been administered by regulation for two decades. He argued that the subsequent‑injury account process has become "a quagmire," that applicants can face long delays and litigation to recover assessments those groups paid into the fund, and that groups would prefer to retain assessments and manage their own loss‑control and return‑to‑work efforts.

Assemblymember O’Neil and witnesses from industry stressed that repeal of the $36,000 payroll cap is aimed at parity with modern pay scales; they said the cap, last amended in 1995, forces employers to assume unpaid statutory exposure for high‑wage workers. Andrew McKay of the Nevada Franchise Auto Dealers Association supported AB332, citing cash‑flow and premium calculation benefits for dealers whose average wages exceed the cap.

The Division of Insurance testified neutral and warned that wholesale repeal of the cap might create short‑term instability in rate multipliers produced by NCCI (the national rating organization). The Division suggested a staggered or delayed effective date to allow actuarial adjustments. The Division of Industrial Relations (DIR) — which administers the subsequent‑injury account — said its current pending caseload for association subsequent‑injury claims is limited (contrasting a sponsor’s reference to 22 pending matters) and requested time to analyze amendments; DIR noted the bill appears to preserve assessments for self‑insured associations and asked for clarity about jurisdiction over claims incurred before a proposed cut‑over date.

Sponsor O’Neil described AB332 as primarily a cleanup bill to reflect modern insurance administration and to give single self‑insured groups parity with private carriers. Committee questions centered on whether the bill would create conflicts if groups self‑administer claims, how existing remedies (including benefit penalties under NRS 616D) would function if groups manage claims internally, and whether repeal of the payroll cap should be recalibrated rather than removed immediately. The hearing record included support testimony from self‑insured groups and neutral technical testimony from regulators; no sustained opposition was presented in the transcript.

The committee closed the hearing and returned the bill to the record for further consideration.