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AB 206

Repeals certain provisions which prohibit an insurer from issuing or renewing certain policies of liability insurance. (BDR 57-643)

2025 Regular Session Introduced by Lisa Cole

Repeals NRS 679A.210, allowing liability policies to allocate defense costs or otherwise limit coverage; insurers may erode insureds' limits and shift defense risk to policyholders

(Pursuant to Joint Standing Rule No. 14.3.1, no further action allowed.)
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Bill Summary · AB 206

Summary — AB 206 (BDR 57-643)

Title: Repeals certain provisions which prohibit an insurer from issuing or renewing certain policies of liability insurance.

Note: The submitted packet includes an unrelated floor document for a different "AB 206" (California Budget Act language). This summary addresses the Nevada bill (BDR 57‑643) described in the provided Version Content and bill text.

Main purpose

AB 206 would repeal Nevada Revised Statutes (NRS) 679A.210, a current statutory prohibition that prevents insurers from issuing or renewing liability‑insurance policies that either (a) reduce the stated liability limit by the costs of defense (attorneys’ fees, litigation expenses, etc.), or (b) otherwise limit availability of coverage for defense costs. Repealing NRS 679A.210 would allow insurers to include policy language that allocates defense costs in ways now expressly forbidden.

Key provisions / changes

  • Repeal: Section 1 of the bill is a straightforward repeal of NRS 679A.210 in its entirety.
  • Removed restrictions (previously set out in NRS 679A.210):
    1. A prohibition on policy provisions that reduce the policy’s stated limit of liability by the costs of defense, legal costs and fees and other claim‑related expenses.
    2. A prohibition on provisions that otherwise limit availability of coverage for those defense and claim‑related costs.

No other statutory changes, funding provisions, or implementational details are included.

Who would be affected

  • Insurers: Would be permitted to draft and offer liability policies with defense‑cost allocation or coverage‑limiting provisions that are currently disallowed.
  • Policyholders (individuals, businesses, public entities): Could face policies where defense costs erode the limits available to pay judgments or settlements, or where defense coverage is limited or excluded.
  • Claimants and defense counsel: Potentially affected by different allocation of funds between defense and indemnity.
  • Regulators and brokers: May see market shifts in policy forms and could face increased demand for disclosure, negotiation, or interpretation of new policy language.

Procedural status & timeline

  • Introduced: January 8, 2025 (prefiled Feb 3, 2025 per version content).
  • Assembly action: Read first time Jan 8; passed Assembly (third reading) March 20, 2025 (Ayes 53, Noes 17).
  • Senate: Read first time March 20, 2025; referred to Rules for assignment; subsequently referred to committees (various committee referrals noted).
  • Final noted status: April 12, 2025 — “Pursuant to Joint Standing Rule No. 14.3.1, no further action allowed.” This indicates the bill did not receive further consideration under that procedural rule and is not advancing at this time.
  • Fiscal note: The bill’s fiscal note (as provided) indicates no effect on the State or local government.

Potential impacts and considerations

  • Market: Repeal could enable insurers to offer lower‑premium products that shift defense costs to insureds or reduce insurer exposure, but could also increase uninsured exposure for claimants if defense costs erode indemnity limits.
  • Consumer protection and clarity: Policyholders may need stronger disclosure or bargaining power to avoid unfavorable defense‑cost provisions; potential for litigation over new policy language.
  • No fiscal impact is claimed for government entities in the bill’s documentation.

Text affected

  • NRS 679A.210 (currently titled “Prohibited provisions in policy of liability insurance relating to costs of defense, legal costs and fees and other expenses for claims”) would be repealed in full. The statute currently bars any liability policy provision that reduces stated liability limits by defense costs or otherwise limits coverage for those costs.

Compiled from official sources — confirm details with the bill’s official record.

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