The uncertainty surrounding the law led to an emergency order on July 20, 2023 to clarify the applicability of the law. The Nevada Division of Insurance ultimately responded to feedback and concerns from the insurance industry. Executive Order R029-23 specified the types of liability insurance policies to which the law applies. These are:

1. Insurance cover against legal liability arising from the ownership or operation of a motor vehicle;
2. Insurance cover against legal liability arising from the possession of owner-occupied residential property;
3. for public liability insurance;
4. for commercial motor vehicle insurance; or
5. Insurance cover for the professional liability of certain healthcare providers.

The regulation also clarifies that the law does not apply to:

1. "Risk retention groups" ("risk collectives");
2. Captive insurance policies that do not cover third-party liability; or
3. insurers that are not authorized to transact insurance business in Nevada but are authorized under applicable law to provide certain insurance coverage in Nevada that cannot be procured from authorized insurers.

Executive Order R029-23 went into effect on October 1, 2023 to mirror the effective date of Act No. 398. As can be seen from the points above, D&O insurers in Nevada can now breathe a sigh of relief as they are not (or no longer) affected by the law. We also no longer expect any impact on the US D&O insurance market as a result of the law in Nevada and therefore also not on the UK/European market for US-listed companies. The traditional understanding of the sum insured/SIR therefore remains unchanged.