Opinion ID: 2625620
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Heading: Plain meaning of insurer under NRS 687A.033(2)(a)

Text: Despite the fact that NRS 687A.033(2)(a) of the NIGA Act excludes coverage for claims that are due an ... insurer, the Legislature did not define insurer in the NIGA Act. Rather, the NIGA Act defines [i]nsolvent insurer, which includes the circumstances in which an insurer is to be considered insolvent so that its obligations will be met by the association, and member insurer, which describes the type of insurer that is required to be a member of NIGA. NRS 687A.035; NRS 687A.037. We are not persuaded that either of these definitions are instructive in this case because NRS 687A.033(a)(2) specifically uses the term insurer rather than insolvent insurer or member insurer. Nevertheless, we determine that the term insurer has a plain meaning and that MGM and SEI do not fall within a reasonable connotation of the term. We determine that various statutory definitions of insurer throughout other chapters of the insurance title are instructive. [3] For example, the general provisions governing the insurance title defines insurer as every person engaged as principal and as indemnitor, surety or contractor in the business of entering into contracts of insurance. NRS 679A.100. Because this definition is included in the general provisions governing Title 57, which includes the NIGA Act, we conclude that NRS 679A.100's definition of insurer applies to the NIGA Act. In response to this general statutory definition of insurer, NIGA argues that it is not authoritative because the Legislature used the word includes before ascribing NRS 679A.100 its definition  i.e., `Insurer' includes every person engaged as principal and as indemnitor, surety or contractor in the business of entering into contracts of insurance. NRS 679A.100 (emphasis added). Based on this, NIGA claims that NRS 679A.100 does not define insurer, but that it is a list of insurers that is not all-inclusive. While NIGA is correct in its assertion that the term includes generally indicates something that is a part of the whole, Merriam-Webster's Collegiate Dictionary, 629-30 (11th ed.2007) (defining include as to take in or comprise as a part of a whole or group and that it suggests the containment of something as a constituent, component, or subordinate part of a larger whole), and that NRS 679A.100's definition may not be all inclusive, we determine that several other statutes falling within Title 57 further demonstrate that insurer has the commonplace meaning that the Legislature prescribed in NRS 679A.100. Other statutes in the insurance title define insurer as one that engages in the business of insurance, like NRS 679A.100. For example, NRS 692C.070 and NRS 696B.120 define insurer the same as NRS 679A.100, which includes every person engaged as principal and as indemnitor, surety or contractor in the business of entering into contracts of insurance. [4] Additionally, NRS 679B.540 and NRS 695H.040 provide that an insurer is any insurer ... authorized pursuant to this title to conduct business in this state. Moreover, NRS 686B.1759 and NRS 695A.014 also define insurer as any person or entity that is engaged in the insurance business. [5] Although NRS 679A.100 employs the term includes when prefacing its definition of insurer, which indicates that the definition is not all-inclusive, we find it indicative of the meaning of insurer under the NIGA Act, which we conclude excludes self-insured employers since they do not engage in the business of insurance. Further, we note that self-insured employers are not defined as insurers anywhere in Nevada's insurance title. The only definition of insurer that includes self-insured employers is found in Nevada's Workers' Compensation Act under NRS 616A.270. Nevada's workers' compensation laws are located in a separate title, not the insurance title. Compare NRS Title 57 (which includes the NIGA Act (NRS Chapters 679A through 697)), with NRS Title 53 (which includes the Workers' Compensation Act, which, under NRS 616A.005, is technically referred to as the Nevada Industrial Insurance Act (NRS Chapters 616A through 616D)). Thus, we conclude that the Legislature's substantial use of insurer to describe persons or entities in the business of insurance militates in favor of concluding that the NIGA Act's reference to insurer plainly addresses an insurance company. [6] Nevertheless, NIGA suggests that MGM and SEI are insurers even under the plain meaning of the term, arguing that, although they do not underwrite insurance policies as insurance companies do, as self-insured employers, they still insure the risk of their employees like insurance companies. We disagree. Traditionally, the party who is the insurer obligates itself to become responsible for loss or damage for consideration in the form of premium payments from the insured. See, e.g., Black's Law Dictionary 814 (8th ed.2004) (defining insurance as [a] contract by which one party (the insurer ) undertakes to indemnify another party (the insured ) against risk of loss, damage, or liability arising from the occurrence of some specified contingency and that [a]n insured party usu[ally] pays a premium to the insurer in exchange for the insurer's assumption of the insured's risk). Here, although MGM and SEI are obligated to their employees to the extent that they must pay their employees' workers' compensation claims, the claims at issue in this case fall within MGM's and SEI's excess insurance policy with Reliance. MGM and SEI had insurance policies with Reliance where, in consideration for premiums paid, Reliance agreed to assume the risk of MGM's and SEI's employees' workers' compensation claims that reached an excess beyond the limits that they contractually agreed to. It was Reliance who paid into the NIGA Act fund as a member-insurer. Therefore, we conclude that Reliance, not MGM or SEI, was insuring the employees' risk of loss for those excess insurance claims. Consequently, the plain meaning of insurer, as applied to the NIGA Act, must exclude MGM and SEI because they are not in the business of insurance. This conclusion is consistent with other jurisdictions' interpretations of statutes similar to NRS 687A.033(2)(a). Although every state has statutorily created insurance guaranty acts and associations, only a few states have considered the precise issue of whether self-insured employers are insurers under their Insurance Guaranty Association Acts. Notably, however, the majority of those states that have considered the issue hold that self-insurers are not insurers for Insurance Guaranty Association Act purposes. See, e.g., Doucette v. Pomes, 247 Conn. 442, 724 A.2d 481, 489-91 (1999) (holding that in light of the plain meaning of insurance and insurer, and the insurance title's definition of insurance, a self-insured employer under the workers' compensation laws was not an insurer for purposes of the guaranty act); Stamp v. Dept. of Labor and Industries, 122 Wash.2d 536, 859 P.2d 597, 599-601 (1993) (deciding to follow other jurisdictions' interpretations of insurer in concluding that self-insured employers are not reinsurers, insurers, insurance pools or underwriting associations); In re Mission Ins. Co., 112 N.M. 433, 816 P.2d 502, 505 (1991) (holding that self-insured employers' claims are covered claims under the guaranty act because the excess insurance policies at issue were direct insurance and not reinsurance); Iowa Cont. Wkrs' Comp. v. Iowa Ins. Guar., 437 N.W.2d 909, 913-16 (1989) (concluding that the self-insurer's excess workers' compensation insurance was direct insurance, rather than reinsurance, because the only insurance contract at issue was between the insolvent insurer and the group, as the insurer's relationship is with the employer or the group of employers, and not with the individual employees); Zinke-Smith, Inc. v. Florida Insurance Guar. Ass'n, Inc., 304 So.2d 507, 509 (Fla.Dist.Ct.App.1974) (holding that, under the insurance title's definition of insurer, self-insured employers are not insurers for guaranty act purposes as such insurance policies are not reinsurance, but rather, excess insurance). Moreover, our conclusion that self-insured employers are not insurers under the NIGA Act is in harmony with Nevada's workers' compensation laws. As the term insurer is used in the NIGA Act, it is addressing an insurance company, which is evidenced by the purpose of the NIGA Actto cover claims of insolvent insurance companies. NRS 687A.060 limits NIGA's obligation to pay certain covered claims; however, NIGA's obligation with respect to workers' compensation claims is not limited, as the statute requires NIGA to pay [t]he entire amount of the claim. NRS 687A.060(1)(a)(1). Applying the Workers' Compensation Act's definition of insurer to the NIGA Act would run counter to NRS 687A.060(1)(a)(1), as the NIGA Act obligates NIGA to pay workers' compensation claims in full and NIGA's obligation would be excused if the claimant was a self-insured employer. Such a reading is contrary to the purpose of the NIGA Act. Therefore, we join the majority of jurisdictions and hold that self-insured employers under Nevada's workers' compensation laws are not insurers for purposes of the NIGA Act. Consequently, we conclude that MGM's and SEI's claims that are [c]overed claim[s], as defined in NRS 687A.033(1), are recoverable.