HSV stands for Highest System Voltage and NSV for Nominal System Voltage. As you can guess, nominal system voltage rating is the expected continuous voltage of system in which the equipment is connected. For example, let us assume that a Circuit Breaker is connected in 400 kV Switchyard, the NSV will be 400 kV.
HSV is the highest continuous system voltage. Considering 400 kV Switchyard, it may happen under light load condition or because of some other reason that system voltage is maintain say 410 kV or 420 kV. Therefore it is expected that the connected equipment like CT, PT, and Breaker etc. should withstand this voltage without any damage. Therefore it is very important to study the system for highest continuous voltage which system / grid can achieve to assign or design HSV of equipment.
Highest continuous voltage of system should not be confused with switching surge or voltage surge due to lightening. HSV is based on highest continuous voltage of system.
Thus HSV rating of equipment is an important factor for designing insulation requirement. Basically insulation requirement of equipment depends on switching voltage surge, lightening over voltage, highest power frequency withstand voltage and HSV. Insulation of equipment is so designed to withstand lightening over voltage for a time of the order of micro second, surge overvoltage for a time of the order of mili second and highest power frequency over voltage for 1 minute. But equipment insulation is designed based on HSV for continuous operation.