[Rev. 2/11/2015 11:50:31
AM--2014R2]
CHAPTER 685A - NONADMITTED INSURANCE
NRS 685A.010 Short
title.
NRS 685A.020 Exemptions.
NRS 685A.025 Applicability.
NRS 685A.030 Definitions.
NRS 685A.031 “Broker”
defined.
NRS 685A.032 “Exempt
commercial purchaser” defined.
NRS 685A.033 “Export”
defined.
NRS 685A.034 “Home
state” defined.
NRS 685A.035 “Independently
procured insurance” defined.
NRS 685A.036 “Multi-state
risk” defined.
NRS 685A.037 “Nonadmitted
insurance” defined.
NRS 685A.0375 “Nonadmitted
insurer” defined.
NRS 685A.038 “Principal
place of business” defined.
NRS 685A.0385 “Principal
residence” defined.
NRS 685A.039 “Surplus
lines insurance” defined.
NRS 685A.040 Conditions
for export.
NRS 685A.050 Broker’s
report.
NRS 685A.060 Open
lines for export.
NRS 685A.070 Eligible
insurers.
NRS 685A.075 Nonprofit
organization of brokers: Formation; board of directors; records filed with
Commissioner; examination by Commissioner.
NRS 685A.077 Immunity
from civil liability given to Commissioner, Division and nonprofit
organizations for certain acts; Commissioner authorized to classify certain
communications as confidential; limitations.
NRS 685A.080 Evidence
of insurance; changes; penalty.
NRS 685A.090 Contracts
for nonadmitted coverage: Requirements.
NRS 685A.100 Coverage
from unauthorized insurer valid.
NRS 685A.110 Liability
of insurer.
NRS 685A.120 Licensing
of brokers; expiration and renewal of license. [Effective until the date of the
repeal of 42 U.S.C. § 666, the federal law requiring each state to establish
procedures for withholding, suspending and restricting the professional,
occupational and recreational licenses for child support arrearages and for
noncompliance with certain processes relating to paternity or child support
proceedings.]
NRS 685A.120 Licensing
of brokers; expiration and renewal of license. [Effective on the date of the
repeal of 42 U.S.C. § 666, the federal law requiring each state to establish
procedures for withholding, suspending and restricting the professional,
occupational and recreational licenses for child support arrearages and for
noncompliance with certain processes relating to paternity or child support
proceedings.]
NRS 685A.127 Payment
of child support: Statement by applicant for license; grounds for denial of
license; duty of Commissioner. [Effective until the date of the repeal of 42
U.S.C. § 666, the federal law requiring each state to establish procedures for
withholding, suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance with
certain processes relating to paternity or child support proceedings.]
NRS 685A.133 Suspension
of license for failure to pay child support or comply with certain subpoenas or
warrants; reinstatement of license. [Effective until the date of the repeal of
42 U.S.C. § 666, the federal law requiring each state to establish procedures
for withholding, suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance with
certain processes relating to paternity or child support proceedings.]
NRS 685A.140 Suspension
or revocation of broker’s license.
NRS 685A.150 Broker
may accept business from licensed agent or broker; compensation.
NRS 685A.155 Broker
may charge fee for procuring coverage; maximum amount of fee.
NRS 685A.160 Records
of broker.
NRS 685A.175 Quarterly
report and payment of tax by certain brokers.
NRS 685A.180 Tax
on surplus lines.
NRS 685A.185 Multi-state
agreement to collect premium tax on multi-state risks.
NRS 685A.190 Failure
to file statement or pay tax; penalties; statute of limitations.
NRS 685A.200 Suit
against insurers; venue; process.
NRS 685A.205 Regulations:
Compliance with federal law relating to nonadmitted insurance.
NRS 685A.210 Regulations;
penalty.
NRS 685A.220 Other
provisions applicable.
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NRS 685A.010 Short title. This
chapter constitutes and may be cited as the Nonadmitted Insurance Law.
(Added to NRS by 1971, 1673; A 2011, 2012)
NRS 685A.020 Exemptions. The
Nonadmitted Insurance Law shall not apply to reinsurance, or to the following
insurances when placed by general lines agents or general lines brokers or
surplus lines brokers licensed as such by this state or when procured directly
by an insured from a nonadmitted insurer:
1. Wet marine and transportation
insurance;
2. Insurance of subjects located, resident
or to be performed wholly outside of this state, or on vehicles or aircraft
owned and principally garaged outside this state;
3. Insurance of property and operations of
railroads engaged in interstate commerce;
4. Insurance of aircraft of common
carriers, or cargo of such aircraft, or against liability, other than
employer’s liability, arising out of the ownership, maintenance or use of such
aircraft; or
5. Insurance of automobile bodily injury
and property damage liability risks when written in Mexican insurers and
covering in Mexico and not in the United States of America.
(Added to NRS by 1971, 1673; A 2011, 2012)
NRS 685A.025 Applicability. Except
as otherwise provided in NRS 685A.020, this
chapter applies to nonadmitted insurance.
(Added to NRS by 2011, 2011)
NRS 685A.030 Definitions. As
used in this chapter, unless the context otherwise requires, the words and
terms defined in NRS 685A.031 to 685A.039, inclusive, have the meanings ascribed to
them in those sections.
(Added to NRS by 1971, 1673; A 2011, 2012)
NRS 685A.031 “Broker” defined. “Broker”
means a surplus lines broker duly licensed as such under this chapter.
(Added to NRS by 2011, 2010)
NRS 685A.032 “Exempt commercial purchaser” defined.
1. “Exempt commercial purchaser” means any
person or political subdivision of this State purchasing commercial insurance:
(a) Who, at the time of placement, employs or
retains a qualified risk manager to negotiate insurance coverage;
(b) Who, at the time of placement, has paid
aggregate nationwide commercial property and casualty insurance premiums of
more than $100,000 in the immediately preceding 12 months; and
(c) Who, at the time of placement, satisfies one
of the following conditions:
(1) Possesses a net worth of more than
$20,000,000;
(2) Generates annual revenues of more than
$50,000,000;
(3) Employs more than 500 full-time or
full-time equivalent employees or is a member of an affiliated group that
employs more than 1,000 employees in the aggregate;
(4) Is a nonprofit organization or public
entity that generates annual budgeted expenditures of $30,000,000 or more; or
(5) Is a city whose population is 25,000
or more or a county whose population is 20,000 or more.
2. The amounts set forth in subparagraphs
(1), (2) and (4) of paragraph (c) of subsection 1 must be adjusted on or before
January 1, 2015, and every 5 years thereafter to reflect inflation, as measured
by the average percentage of increase or decrease in the Consumer Price Index
for All Urban Consumers of the United States Department of Labor, Bureau of
Labor Statistics for the preceding 5 years. The Commissioner shall determine
the amount of the increase or decrease required by this subsection and
establish the adjusted amounts to take effect on January 1 of that year.
(Added to NRS by 2011, 2010)
NRS 685A.033 “Export” defined. “Export”
means to place insurance in an unauthorized insurer under this chapter.
(Added to NRS by 2011, 2010)
NRS 685A.034 “Home state” defined. “Home
state” means:
1. For an insured:
(a) The state in which the insured maintains its
principal place of business or, in the case of an individual, the individual’s
principal residence; or
(b) If 100 percent of the insured risk is located
outside of the state determined pursuant to paragraph (a), the state to which
the greatest percentage of the insured’s taxable premium for that insurance
contract is allocated.
2. If more than one insured from an
affiliated group is a named insured on a single nonadmitted insurance contract,
the state determined pursuant to paragraph (a) of subsection 1 for the member
of the affiliated group that has the largest percentage of premium attributed
to it under the nonadmitted insurance contract.
3. For a policy of group insurance:
(a) If the group policyholder pays 100 percent of
the premium from its own funds, the state determined pursuant to paragraph (a)
of subsection 1 for the group policyholder.
(b) If the group policyholder does not pay 100
percent of the premium from its own funds, the state determined pursuant to
paragraph (a) of subsection 1 for the group member.
(Added to NRS by 2011, 2010)
NRS 685A.035 “Independently procured insurance” defined. “Independently procured insurance” means
insurance procured directly by an insured from a nonadmitted insurer.
(Added to NRS by 2011, 2011)
NRS 685A.036 “Multi-state risk” defined. “Multi-state
risk” means a risk covered by a nonadmitted insurer to which the insured is
exposed in more than one state.
(Added to NRS by 2011, 2011)
NRS 685A.037 “Nonadmitted insurance” defined. “Nonadmitted
insurance” means any property and casualty insurance permitted to be placed
directly or through a broker with a nonadmitted insurer eligible to accept such
insurance. The term includes both independently procured insurance and surplus
lines insurance.
(Added to NRS by 2011, 2011)
NRS 685A.0375 “Nonadmitted insurer” defined. “Nonadmitted
insurer” means an insurer not authorized to engage in the business of insurance
in this State. The term does not include a risk retention group as that term is
defined in 15 U.S.C. § 3901(a)(4).
(Added to NRS by 2011, 2011)
NRS 685A.038 “Principal place of business” defined. “Principal
place of business” means, for the purpose of determining the home state of the
insured:
1. The state where the insured maintains
its headquarters and where the insured’s high-level officers direct, control
and coordinate its business activities;
2. If the insured’s high-level officers
direct, control and coordinate its business activities in more than one state,
the state in which the greatest percentage of the insured’s taxable premium for
that insurance contract is allocated; or
3. If the insured’s high-level officers
direct, control and coordinate its business activities outside of any state,
the state to which the greatest percentage of the insured’s taxable premium for
that insurance contract is allocated.
(Added to NRS by 2011, 2011)
NRS 685A.0385 “Principal residence” defined. “Principal
residence” means, for the purpose of determining the home state of the insured:
1. The state where the insured resides for
the greatest number of days during a calendar year; or
2. If the insured’s principal residence is
located outside of any state, the state to which the greatest percentage of the
insured’s taxable premium for that insurance contract is allocated.
(Added to NRS by 2011, 2011)
NRS 685A.039 “Surplus lines insurance” defined. “Surplus
lines insurance” means insurance procured by an insured through a broker with a
nonadmitted insurer eligible to accept such insurance.
(Added to NRS by 2011, 2011)
NRS 685A.040 Conditions for export. If
this State is the insured’s home state and certain insurance coverages cannot
be procured from authorized insurers, such coverages, designated in this
chapter as nonadmitted insurance, may be procured from unauthorized insurers,
subject to the following conditions:
1. The insurance must be procured through
a broker licensed as such under this chapter or procured by an insured directly
from a nonadmitted insurer as permitted by law.
2. Except as otherwise provided in
subsection 5, the full amount of insurance required must not be procurable from
an insurer authorized to engage in the business of insurance in this State,
after diligent effort has been made to do so.
3. The insurance must not be so exported
for the purpose of procuring it at a premium rate lower than would be accepted
by any authorized insurer; difference in rates alone will not support the export
of the insurance if any authorized insurer is able and willing to carry the
risk.
4. Differences, bearing directly upon the
cost of insurance, in the terms of policies which otherwise provide
substantially the same coverage will not support the export of the insurance.
5. A broker is not required to make a
diligent effort to determine whether the full amount or type of insurance can
be obtained from admitted insurers when the broker is seeking to procure or
place nonadmitted insurance for an exempt commercial purchaser if:
(a) The broker procuring or placing the
nonadmitted insurance has disclosed to the exempt commercial purchaser that
such insurance may or may not be available from the admitted market that may
provide greater protection with more regulatory oversight; and
(b) The exempt commercial purchaser has
subsequently requested in writing for the broker to procure or place such
insurance from a nonadmitted insurer.
(Added to NRS by 1971, 1673; A 1971, 1939; 2011, 2013)
NRS 685A.050 Broker’s report.
1. At the time of effecting any surplus
lines insurance for which this State is the home state, the broker shall,
within 90 days after such insurance is so effected, submit a report, in the
form prescribed or accepted by the Commissioner, setting forth facts from which
it can be determined whether such insurance is eligible for export under NRS 685A.040.
2. The broker shall keep in his or her
office the report prepared pursuant to subsection 1 along with the report of
coverage and any other information the Commissioner requires.
3. The report prepared pursuant to
subsection 1 must not be removed from the office of the broker and must be open
to examination by the Commissioner or a representative of the Commissioner at
all times within 5 years after issuance of the coverage to which it relates.
(Added to NRS by 1971, 1674; A 1987, 1149; 2011, 2013)
NRS 685A.060 Open lines for export.
1. The Commissioner may by order declare
eligible for export generally and without compliance with subsections 2, 3 and
4 of NRS 685A.040 and NRS
685A.050, any class or classes of insurance coverage or risk for which the
Commissioner finds that there is not a reasonable or adequate market among
authorized insurers either as to acceptance of the risk, contract terms, or
premium or premium rate. Any such order shall continue in effect during the
existence of the conditions upon which predicated, but subject to earlier
termination by the Commissioner.
2. For surplus lines insurance, the broker
shall file with or as directed by the Commissioner a memorandum as to each such
coverage placed by the broker in an unauthorized insurer, in such form and
context as the Commissioner may reasonably require for the identification of
the coverage and determination of the tax payable to the State relative
thereto.
3. The broker, or a licensed Nevada agent
of the authorized insurer or a general lines broker, may also place with
authorized insurers any insurance coverage made eligible for export generally
under subsection 1, and without regard to rate or form filings which may
otherwise be applicable to the authorized insurer. As to coverages so placed in
an authorized insurer the premium tax thereon shall be reported and paid by the
insurer as required generally under chapter
680B of NRS.
(Added to NRS by 1971, 1674; A 2011, 2013)
NRS 685A.070 Eligible insurers.
1. A broker shall not knowingly place
surplus lines insurance with an insurer which is unsound financially or
ineligible pursuant to this section.
2. With respect to nonadmitted insurance
for insureds for which this State is the home state, except as otherwise
provided in this section, an insurer is not eligible to accept surplus lines or
independently procured risks pursuant to this chapter unless it has capital and
surplus or its equivalent in an amount of not less than $15,000,000 or the
minimum capital and surplus requirements pursuant to NRS 680A.120, whichever is greater.
3. The requirements of subsection 2 may be
satisfied by an insurer possessing less than the minimum capital and surplus
upon an affirmative finding of acceptability by the Commissioner. The finding
must be based upon such factors as quality of management, capital and surplus
of any parent company, company underwriting profit and investment income
trends, market availability and company record and reputation within the
industry. The Commissioner shall not make an affirmative finding of
acceptability when the nonadmitted insurer’s capital and surplus is less than
$4,500,000.
4. A broker shall not place surplus lines
insurance with an alien insurer, unless the alien insurer is listed on the
Quarterly Listing of Alien Insurers maintained by the International Insurers
Department of the National Association of Insurance Commissioners or, if the
alien insurer is not listed on the Quarterly Listing of Alien Insurers, it has
and maintains in a bank or trust company which is a member of the United States
Federal Reserve System a trust fund established pursuant to terms that are
reasonably adequate to protect all of its policyholders in the United States.
Such a trust fund must not have an expiration date which is at any time less
than 5 years in the future, on a continuing basis. In the case of:
(a) A single alien insurer, such a trust fund
must not be less than the greater of $5,400,000 or 30 percent of the gross
liabilities of the alien insurer for surplus lines in the United States,
excluding any liabilities for aviation, wet marine and transportation
insurance, not to exceed $60,000,000, to be determined annually on the basis of
accounting practices and procedures that are substantially equivalent to the
accounting practices and procedures applicable in this State as of December 31
of the year immediately preceding the date of the determination where:
(1) The liabilities are maintained in an
irrevocable trust account in a qualified financial institution in the United
States, on behalf of policyholders in the United States, consisting of cash,
securities, letters of credit or any other investments of substantially the
same character and quality as investments that are eligible investments
pursuant to chapter 682A of NRS for the
capital and statutory reserves of admitted insurers to write like kinds of
insurance in this State. The trust fund, which must be included in any
calculation of capital and surplus or its equivalent, must comply with the
requirements set forth in the Standard Trust Agreement required for listing
with the International Insurers Department of the National Association of
Insurance Commissioners;
(2) The alien insurer may request approval
by the Commissioner to use the trust fund to pay any valid claim against a
surplus line if the balance of the trust fund is not, during any period, less
than $5,400,000 or 30 percent of the alien insurer’s current gross liabilities
for surplus lines in the United States, excluding any liabilities for aviation,
wet marine and transportation insurance; and
(3) In calculating the amount of the trust
fund required by this subsection, credit must be given for any deposits for any
surplus lines that are separately required and maintained within a state or
territory of the United States, not to exceed the amount of the alien insurer’s
loss and loss adjustment reserves maintained in that state or territory.
(b) A group of insurers which includes individual
unincorporated insurers, such a trust fund must not be less than $100,000,000.
(c) A group of incorporated insurers under common
administration, such a trust fund must not be less than $100,000,000. Each insurer
within the group must individually maintain capital and surplus of not less
than $25,000,000. The group of incorporated insurers must:
(1) Operate under the supervision of the
Department of Trade and Industry of the United Kingdom;
(2) Possess aggregate policyholders
surplus of $10,000,000,000, which must consist of money in trust in an amount
not less than the assuming insurers’ liabilities attributable to insurance
written in the United States; and
(3) Maintain a joint trusteed surplus of
which $100,000,000 must be held jointly for the benefit of United States ceding
insurers of any member of the group.
5. A foreign insurer must be authorized in
the state of its domicile to write the kinds of insurance which it intends to
write in Nevada and for which this State is the home state of the insured.
(Added to NRS by 1971, 1674; A 1979, 1921; 1981, 1018, 1325; 1985, 610; 1991, 1627, 2031; 1993, 597, 2389; 1997, 3029; 1999, 2797; 2003, 3299; 2009, 1781;
2011, 2014)
NRS 685A.075 Nonprofit organization of brokers: Formation; board of
directors; records filed with Commissioner; examination by Commissioner.
1. A nonprofit organization of surplus
lines brokers may be formed to:
(a) Facilitate and encourage compliance by its
members with the laws of this State and the rules and regulations of the
Commissioner concerning surplus lines insurance;
(b) Provide a means for the review of all surplus
lines coverage written in this State;
(c) Communicate with organizations of admitted
insurers with respect to the proper use of the surplus lines market;
(d) Receive and disseminate to brokers
information relative to surplus lines coverages; and
(e) Charge members a filing fee, approved by the
Commissioner, for the review of surplus lines coverages.
2. Every such organization shall exercise
its powers through a board of directors and shall file with the Commissioner:
(a) A copy of its constitution, articles of
agreement or association or certificate of incorporation;
(b) A copy of its bylaws, rules and regulations
governing its activities;
(c) A copy of its plan of operations established
and approved by the Commissioner;
(d) A current list of its members;
(e) The name and address of a resident of this
State upon whom notices or orders of the Commissioner or processes issued at
the direction of the Commissioner may be served; and
(f) An agreement that the Commissioner may
examine the organization in accordance with the provisions of this section.
3. The Commissioner shall make an
examination of the affairs, transactions, accounts, records and assets of such
an organization and any of its members as often as the Commissioner deems
necessary for the protection of the interests of the people of this State, but
no less frequently than once every 3 years. The officers, managers, agents and
employees of such an organization may be examined at any time, under oath, and
shall provide to the Commissioner all books, records, accounts, documents or
agreements governing its method of operation. The Commissioner shall furnish
two copies of the examination report to the organization examined and shall
notify the organization that it may, within 20 days thereof, request a hearing
on the report or on any facts or recommendations set forth therein. If the
Commissioner finds such an organization or any member thereof to be in
violation of this chapter, the Commissioner may, in addition to any
administrative fine or penalty imposed pursuant to this Code, issue an order
requiring the discontinuance of such violations.
4. The board of directors of such an
organization must consist of not fewer than five persons. The members of the
board must be appointed by the Commissioner and serve at the pleasure of the
Commissioner.
5. A broker must be a member of such an
organization as a condition of continued licensure under this chapter.
(Added to NRS by 1995, 1616)
NRS 685A.077 Immunity from civil liability given to Commissioner, Division
and nonprofit organizations for certain acts; Commissioner authorized to
classify certain communications as confidential; limitations.
1. The Commissioner, the Division and
employees of the Division, and any nonprofit organization of surplus lines
brokers formed pursuant to NRS 685A.075 and its
members, officers, committee members, agents and employees are not liable in a
civil action for any act performed in good faith and within the scope of their
duties or the exercise of their authority pursuant to this chapter.
2. The Commissioner may, pursuant to NRS 679B.190, classify as confidential:
(a) Any investigation conducted by a nonprofit
organization of surplus lines brokers formed pursuant to NRS 685A.075; and
(b) Any communications between such an
organization and the Commissioner and other appropriate authorities pursuant to
this chapter.
3. The immunities and privileges provided
by this section do not affect:
(a) The availability of any other immunities or
privileges otherwise provided by law; or
(b) Any rights of hearing and review otherwise
provided in this chapter.
(Added to NRS by 1997, 3028)
NRS 685A.080 Evidence of insurance; changes; penalty.
1. Upon placing a surplus lines coverage,
the broker shall promptly issue and deliver to the insured evidence of the
insurance consisting either of the policy as issued by the insurer or, if such
a policy is not then available, the surplus lines broker’s certificate executed
by the broker or a cover note. Such a certificate or cover note must show the
description and location of the subject of the insurance, coverage, conditions
and term of the insurance, the premium and rate charged and taxes collected
from the insured, and the name and address of the insured and insurer and must
state that the broker has verified that the insurance described has been
granted or issued. If the direct risk is assumed by more than one insurer, the
certificate must state the name and address and proportion of the entire direct
risk assumed by each such insurer.
2. A broker shall not issue any such
certificate or any cover note, or purport to insure or represent that insurance
will be or has been granted by any unauthorized insurer, unless the broker has
prior written authority from the insurer for the insurance, or has received
information from the insurer in the regular course of business that the
insurance has been granted, or an insurance policy providing the insurance
actually has been issued by the insurer and delivered to the insured.
3. If after the issuance and delivery of
any such certificate there is any change as to the identity of the insurers, or
the proportion of the direct risk assumed by an insurer as stated in the
broker’s original certificate, or in any other material respect as to the
insurance evidenced by the certificate, the broker shall promptly issue and
deliver to the insured a substitute certificate accurately showing the current
status of the coverage and the insurers responsible thereunder.
4. If a policy issued by the insurer is
not available upon placement of the insurance and the broker has issued and
delivered a certificate as provided in this section, upon request therefor by
the insured the broker shall as soon as reasonably possible procure from the
insurer its policy evidencing the insurance and deliver the policy to the
insured in replacement of the broker’s certificate theretofore issued.
5. Any surplus lines broker who knowingly
or negligently issues a false certificate of insurance or who fails promptly to
notify the insured of any material change with respect to the insurance by
delivery to the insured of a substitute certificate as provided in subsection 3
is subject to the penalty provided by NRS
679A.180 or to any greater applicable penalty otherwise provided by law.
(Added to NRS by 1971, 1675; A 1979, 1922; 2003, 3301)
NRS 685A.090 Contracts for nonadmitted coverage: Requirements. Each insurance contract procured and delivered
as a nonadmitted coverage pursuant to this chapter must have conspicuously
stamped upon it:
This insurance contract is issued
pursuant to the Nevada insurance laws by an insurer neither licensed by nor
under the supervision of the Division of Insurance of the Department of
Business and Industry of the State of Nevada. If the insurer is found
insolvent, a claim under this contract is not covered by the Nevada Insurance
Guaranty Association Act.
(Added to NRS by 1971, 1676; A 1981, 676; 1991, 1628; 1993, 1917; 2003, 3301; 2011, 2016)
NRS 685A.100 Coverage from unauthorized insurer valid. Insurance contracts procured as nonadmitted
coverage from unauthorized insurers in accordance with this chapter shall be
fully valid and enforceable as to all parties, and shall be given recognition
in all matters and respects to the same effect as like contracts issued by
authorized insurers.
(Added to NRS by 1971, 1676; A 2011, 2016)
NRS 685A.110 Liability of insurer.
1. As to a surplus lines risk which has
been assumed by an unauthorized insurer pursuant to the Nonadmitted Insurance
Law, and if the premium thereon has been received by the surplus lines broker
who placed such insurance, in all questions thereafter arising under the
coverage between the insurer and the insured the insurer shall be deemed to
have received the premium due to it for such coverage; and the insurer shall be
liable to the insured for losses covered by such insurance, and for unearned
premiums which may become payable to the insured upon cancellation of such
insurance, whether or not in fact the broker is indebted to the insurer with
respect to such insurance or for any other cause.
2. Each unauthorized insurer assuming a
surplus lines risk under the Nonadmitted Insurance Law shall be deemed thereby
to have subjected itself to the terms of this section.
(Added to NRS by 1971, 1676; A 2011, 2016)
NRS 685A.120 Licensing of brokers; expiration and renewal of license.
[Effective until the date of the repeal of 42 U.S.C. § 666, the federal law
requiring each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating to
paternity or child support proceedings.]
1. No person may act as, hold himself or
herself out as or be a surplus lines broker with respect to subjects of
insurance for which this State is the insured’s home state unless the person is
licensed as such by the Commissioner pursuant to this chapter.
2. Any person who has been licensed by
this State as a producer of insurance for general lines for at least 6 months,
or has been licensed in another state as a surplus lines broker and continues
to be licensed in that state, and who is deemed by the Commissioner to be
competent and trustworthy with respect to the handling of surplus lines may be
licensed as a surplus lines broker upon:
(a) Application for a license and payment of all
applicable fees for a license and a fee established by the Commissioner of not
more than $15 for deposit in the Insurance Recovery Account created by NRS 679B.305;
(b) Submitting the statement required pursuant to
NRS 685A.127; and
(c) Passing any examination prescribed by the
Commissioner on the subject of surplus lines.
3. An application for a license must be
submitted to the Commissioner on a form designated and furnished by the Commissioner.
The application must include the social security number of the applicant.
4. A license issued pursuant to this
chapter continues in force for 3 years unless it is suspended, revoked or
otherwise terminated. The license may be renewed upon submission of the
statement required pursuant to NRS 685A.127 and
payment of all applicable fees for renewal and a fee established by the
Commissioner of not more than $15 for deposit in the Insurance Recovery Account
created by NRS 679B.305 to the
Commissioner on or before the last day of the month in which the license is
renewable.
5. A license which is not renewed expires
at midnight on the last day specified for its renewal. The Commissioner may
accept a request for renewal received by the Commissioner within 30 days after
the expiration of the license if the request is accompanied by:
(a) The statement required pursuant to NRS 685A.127;
(b) All applicable fees for renewal;
(c) A penalty in an amount that is equal to 50
percent of all applicable fees for renewal, except for any fee required
pursuant to NRS 680C.110; and
(d) A fee established by the Commissioner of not
more than $15 for deposit in the Insurance Recovery Account created by NRS 679B.305.
(Added to NRS by 1971, 1677; A 1977, 1329; 1981, 1019; 1985, 600; 1987, 462; 1995, 1102, 1617; 1997, 516, 2195; 1999, 2798; 2003, 3302; 2005, 2129; 2009, 1783;
2011, 2017)
NRS 685A.120 Licensing of brokers;
expiration and renewal of license. [Effective on the date of the repeal of 42
U.S.C. § 666, the federal law requiring each state to establish procedures for
withholding, suspending and restricting the professional, occupational and
recreational licenses for child support arrearages and for noncompliance with
certain processes relating to paternity or child support proceedings.]
1. No person may act as, hold himself or
herself out as or be a surplus lines broker with respect to subjects of
insurance for which this State is the insured’s home state unless the person is
licensed as such by the Commissioner pursuant to this chapter.
2. Any person who has been licensed by
this State as a producer of insurance for general lines for at least 6 months,
or has been licensed in another state as a surplus lines broker and continues
to be licensed in that state, and who is deemed by the Commissioner to be
competent and trustworthy with respect to the handling of surplus lines may be
licensed as a surplus lines broker upon:
(a) Application for a license and payment of all
applicable fees for a license and a fee established by the Commissioner of not
more than $15 for deposit in the Insurance Recovery Account created by NRS 679B.305; and
(b) Passing any examination prescribed by the
Commissioner on the subject of surplus lines.
3. Application for the license must be
made to the Commissioner on forms designated and furnished by the Commissioner.
4. A license issued pursuant to this
chapter continues in force for 3 years unless it is suspended, revoked or
otherwise terminated. The license may be renewed by payment of all applicable
fees for renewal and a fee established by the Commissioner of not more than $15
for deposit in the Insurance Recovery Account created by NRS 679B.305 to the Commissioner on or
before the last day of the month in which the license is renewable.
5. A license which is not renewed expires
at midnight on the last day specified for its renewal. The Commissioner may
accept a request for renewal received by the Commissioner within 30 days after
the expiration of the license if the request is accompanied by:
(a) All applicable fees for renewal;
(b) A penalty in an amount that is equal to 50
percent of all applicable fees for renewal, except for any fee required
pursuant to NRS 680C.110; and
(c) A fee established by the Commissioner of not
more than $15 for deposit in the Insurance Recovery Account created by NRS 679B.305.
(Added to NRS by 1971, 1677; A 1977, 1329; 1981, 1019; 1985, 600; 1987, 462; 1995, 1102, 1617; 1997, 516, 2195; 1999, 2798; 2003, 3302; 2005, 2129, 2130; 2009, 1783;
2011, 2017,
effective on the date of the repeal of 42 U.S.C. § 666, the federal law
requiring each state to establish procedures for withholding, suspending and
restricting the professional, occupational and recreational licenses for child
support arrearages and for noncompliance with certain processes relating to
paternity or child support proceedings)
NRS 685A.127 Payment of child support: Statement by applicant for license;
grounds for denial of license; duty of Commissioner. [Effective until the date
of the repeal of 42 U.S.C. § 666, the federal law requiring each state to
establish procedures for withholding, suspending and restricting the
professional, occupational and recreational licenses for child support
arrearages and for noncompliance with certain processes relating to paternity
or child support proceedings.]
1. An applicant for the issuance or
renewal of a surplus lines broker’s license shall submit to the Commissioner
the statement prescribed by the Division of Welfare and Supportive Services of
the Department of Health and Human Services pursuant to NRS 425.520. The statement must be
completed and signed by the applicant.
2. The Commissioner shall include the
statement required pursuant to subsection 1 in:
(a) The application or any other forms that must
be submitted for the issuance or renewal of the license; or
(b) A separate form prescribed by the
Commissioner.
3. A surplus lines broker’s license may
not be issued or renewed by the Commissioner if the applicant:
(a) Fails to submit the statement required
pursuant to subsection 1; or
(b) Indicates on the statement submitted pursuant
to subsection 1 that the applicant is subject to a court order for the support
of a child and is not in compliance with the order or a plan approved by the
district attorney or other public agency enforcing the order for the repayment
of the amount owed pursuant to the order.
4. If an applicant indicates on the
statement submitted pursuant to subsection 1 that the applicant is subject to a
court order for the support of a child and is not in compliance with the order
or a plan approved by the district attorney or other public agency enforcing
the order for the repayment of the amount owed pursuant to the order, the
Commissioner shall advise the applicant to contact the district attorney or
other public agency enforcing the order to determine the actions that the
applicant may take to satisfy the arrearage.
(Added to NRS by 1997, 2194)
NRS 685A.133 Suspension of license for failure to pay child support or comply
with certain subpoenas or warrants; reinstatement of license. [Effective until
the date of the repeal of 42 U.S.C. § 666, the federal law requiring each state
to establish procedures for withholding, suspending and restricting the
professional, occupational and recreational licenses for child support
arrearages and for noncompliance with certain processes relating to paternity
or child support proceedings.]
1. If the Commissioner receives a copy of
a court order issued pursuant to NRS
425.540 that provides for the suspension of all professional, occupational
and recreational licenses, certificates and permits issued to a person who is
the holder of a surplus lines broker’s license, the Commissioner shall deem the
license issued to that person to be suspended at the end of the 30th day after
the date on which the court order was issued unless the Commissioner receives a
letter issued to the holder of the license by the district attorney or other
public agency pursuant to NRS 425.550
stating that the holder of the license has complied with the subpoena or
warrant or has satisfied the arrearage pursuant to NRS 425.560.
2. The Commissioner shall reinstate a
surplus lines broker’s license that has been suspended by a district court
pursuant to NRS 425.540 if the
Commissioner receives a letter issued by the district attorney or other public
agency pursuant to NRS 425.550 to the
person whose license was suspended stating that the person whose license was
suspended has complied with the subpoena or warrant or has satisfied the
arrearage pursuant to NRS 425.560.
(Added to NRS by 1997, 2195)
NRS 685A.140 Suspension or revocation of broker’s license.
1. In addition to other grounds therefor,
the Commissioner may suspend or revoke any surplus lines broker’s license:
(a) If the broker fails to file the quarterly
statement or to remit the tax as required by NRS
685A.175 and 685A.180;
(b) If the broker fails to maintain an office in
this state or in the state where the broker was issued a license as a resident
broker, or to keep the records, or to allow the Commissioner to examine his or
her records as required by this chapter, or if the broker removes his or her
records from the state; or
(c) If this State is the insured’s home state and
the broker places a surplus lines coverage in an insurer other than as
authorized under this chapter.
2. Upon suspending or revoking the
broker’s surplus lines license the Commissioner may also suspend or revoke all
other licenses of or as to the same individual under this Code.
(Added to NRS by 1971, 1677; A 1999, 2798; 2011, 2017)
NRS 685A.150 Broker may accept business from licensed agent or broker;
compensation. A licensed surplus
lines broker may accept surplus lines business from any agent or broker
licensed in this state for the kind of insurance involved and may compensate
the agent or broker therefor.
(Added to NRS by 1971, 1678; A 1979, 1923)
NRS 685A.155 Broker may charge fee for procuring coverage; maximum amount of
fee. A broker may charge a fee for
procuring surplus lines coverage. Except as otherwise provided by agreement
between the insurer and broker, the fee must not exceed 20 percent of the
premium charged, after deduction of any other commissions, fees and charges
payable to the broker.
(Added to NRS by 1987, 1149)
NRS 685A.160 Records of broker.
1. Each broker shall keep in his or her
office a full and true record of each surplus lines coverage procured by the
broker for which this State is the insured’s home state, including a copy of
each daily report, if any, a copy of each certificate of insurance issued by
the broker, and such of the following items as may be applicable:
(a) The amount of the insurance;
(b) The gross premium charged;
(c) The return premium paid, if any;
(d) The rate of premium charged upon the several
items of property;
(e) The effective date of the contract, and the
terms thereof;
(f) The name and address of each insurer on the
direct risk and the proportion of the entire risk assumed by that insurer if
less than the entire risk;
(g) The name and address of the insured;
(h) A brief general description of the property
or risk insured and where located or to be performed; and
(i) Any other information as may be required by
the Commissioner.
2. The record must not be removed from the
office of the broker and must be open to examination by the Commissioner or a
representative of the Commissioner at all times within 5 years after issuance
of the coverage to which it relates.
(Added to NRS by 1971, 1678; A 1999, 2799; 2011, 2018)
NRS 685A.175 Quarterly report and payment of tax by certain brokers.
1. A broker who has written coverage for
which this State is the insured’s home state shall pay, by the date described
in subsection 2, the tax for each calendar quarter as directed by the
Commissioner and shall file as directed by the Commissioner a copy of a
quarterly report which includes an accounting of:
(a) The aggregate gross premiums for the quarter;
(b) The aggregate of the return premiums
received;
(c) The amount of tax remitted to the
Commissioner; and
(d) The distribution of the exposures of insureds
by state in accordance with the requirements of any multi-state agreement
entered into by the Commissioner pursuant to NRS
685A.185.
Ê The report
must be on a form approved by the Commissioner.
2. The tax filings and payments required
by subsection 1 must be submitted by:
(a) February 15 for the calendar quarter ending
the preceding December 31.
(b) May 15 for the calendar quarter ending the
preceding March 31.
(c) August 15 for the calendar quarter ending the
preceding June 30.
(d) November 15 for the calendar quarter ending
the preceding September 30.
(Added to NRS by 1985, 600; A 1995, 1617; 2011, 2018)
NRS 685A.180 Tax on surplus lines.
1. Except as otherwise provided in
subsection 6, on or before the date described in subsection 2 of NRS 685A.175 for each quarter, each broker shall pay
as directed by the Commissioner a tax on surplus lines coverages for which this
State is the insured’s home state written by the broker in unauthorized
insurers during the preceding calendar quarter at the same rate of tax as
imposed by law on the premiums of similar coverages written by authorized
insurers, in addition to any fees imposed pursuant to NRS
685A.075.
2. Except as otherwise provided in subsection
6, on or before the date described in subsection 2 of NRS
685A.175 for each quarter, each insured for which this State is the home
state shall pay as directed by the Commissioner a tax on independently procured
insurance written for the insured by an unauthorized insurer during the
preceding calendar quarter at the same rate of tax as imposed by law on the
premiums of similar coverages written by authorized insurers, in addition to
any fees imposed pursuant to NRS 685A.075.
3. For the purposes of this section, the
“premium” on surplus lines coverages includes:
(a) The gross amount charged by the insurer for
the insurance, less any return premium;
(b) Any fee allowed by NRS
685A.155;
(c) Any policy fee;
(d) Any membership fee;
(e) Any inspection fee; and
(f) Any other fees or assessments charged by the
insurer as consideration for the insurance.
Ê Premium does
not include any additional amount charged for state or federal tax, or for
executing or completing affidavits or reports of coverage.
4. All taxes collected as directed by the
Commissioner pursuant to this section and not intended for disbursement to
other states by a clearinghouse established through any multi-state agreement
entered into by the Commissioner pursuant to NRS
685A.185 must be promptly deposited with the State Treasurer, to the credit
of the State General Fund.
5. A broker who receives a credit for tax
paid shall refund to each insured the amount of the credit attributable to the
insured when the insurer pays a return premium or within 30 days, whichever is
earlier.
6. If the Commissioner has entered into a
multi-state agreement pursuant to NRS 685A.185,
the Commissioner may require that each broker who has written surplus line
coverages for multi-state risks for which this State is the insured’s home
state and each insured for which this State is the home state who has obtained
independently procured insurance for multi-state risks pay a premium tax:
(a) For the portion of the premium allocated to
Nevada, at the tax rate applicable to nonadmitted insurance pursuant to this
chapter;
(b) For the portion of the premium allocated to
any other state that also participates in the multi-state agreement, at the tax
rate applicable to nonadmitted insurance as established by that state; and
(c) For the portion of the premium allocated to
any other state that does not participate in the multi-state agreement, at the
tax rate applicable to nonadmitted insurance pursuant to this chapter. The tax
for this portion of the premium must be deposited with the State Treasurer, to
the credit of the State General Fund, after it is processed by the
clearinghouse established through the multi-state agreement.
(Added to NRS by 1971, 1678; A 1983, 827; 1985, 601; 1995, 1618; 2003, 3302; 2011, 2019)
NRS 685A.185 Multi-state agreement to collect premium tax on multi-state
risks.
1. The Commissioner may, with the approval
of the State Board of Examiners, on behalf of the State enter into a
multi-state agreement to preserve the ability of this State to collect premium
tax on multi-state risks.
2. If, within 18 months after the
Commissioner enters into a multi-state agreement pursuant to subsection 1, the
Commissioner conducts a hearing pursuant to the provisions of chapter 233B of NRS concerning participation
in the multi-state agreement, the Commissioner shall submit to the State Board
of Examiners and to the Director of the Legislative Counsel Bureau for
transmittal to the Legislature a report concerning the findings of the
Commissioner pursuant to the hearing.
3. The State Board of Examiners shall
review and may accept the findings of the Commissioner. If the Commissioner
finds and the State Board of Examiners accepts that because of the effect of
the multi-state agreement on the gross receipt of premiums collected in this
State:
(a) It is in the best interest of the State to
continue to participate in the multi-state agreement, the State Board of
Examiners may approve the State’s continued participation in the multi-state
agreement.
(b) It is not in the best interest of the State
to continue to participate in the multi-state agreement, the State Board of
Examiners may approve the State’s withdrawal from the multi-state agreement.
(Added to NRS by 2011, 2011)
NRS 685A.190 Failure to file statement or pay tax; penalties; statute of
limitations.
1. A broker who fails to make and file the
quarterly statement required pursuant to NRS 685A.175
is liable for a penalty of $500.
2. Except as otherwise provided in this
subsection, a broker who fails to pay the tax required by NRS 685A.180 is liable:
(a) If the aggregate amount of the tax owed by
the broker is more than $50, for a penalty in the first year of delinquency in
the amount of $1,000 or 125 percent of the delinquent tax, whichever is larger;
or
(b) If the aggregate amount of the tax owed by
the broker is $50 or less, for a penalty in the first year of delinquency in an
amount equal to the amount of the delinquent tax.
3. Interest must be charged on all
penalties imposed pursuant to subsection 2 in an amount equal to the prime rate
at the largest bank in the State of Nevada, as ascertained by the Commissioner
of Financial Institutions on January 1 of the year in which the tax became due,
plus 2 percent. The rate must be adjusted on July 1 and January 1 thereafter.
The interest charged must be compounded monthly and must continue to accrue
until the penalty and interest are paid in full.
4. The tax may be collected by distraint,
or the tax and penalty may be recovered by an action instituted by the
Commissioner, in the name of the State, the Attorney General representing the
Commissioner, in any court of competent jurisdiction. The penalty, when so
collected, must be paid to the State Treasurer for credit to the State General
Fund.
5. No proceeding to recover taxes,
penalties or fines pursuant to this section may be maintained unless it is
commenced by the giving of notice to the person against whom the proceeding is
brought within 5 years after the occurrence of the charged act or omission.
This limitation does not apply if the Commissioner finds fraudulent or willful
evasion of taxes.
(Added to NRS by 1971, 1679; A 1985, 601; 1995, 1618, 2676; 2011, 2020)
NRS 685A.200 Suit against insurers; venue; process.
1. An unauthorized insurer effecting
insurance under the provisions of the Nonadmitted Insurance Law shall be deemed
to be transacting insurance in this state as an unlicensed insurer and may be
sued in a district court of this state upon any cause of action arising against
it in this state under any insurance contract entered into by it under this
chapter.
2. Service of legal process against the
insurer may be made in any such action by service of two copies thereof upon
the Commissioner or an authorized representative of the Commissioner and
payment of the fee specified in NRS
680B.010. The Commissioner or an authorized representative of the
Commissioner shall forthwith mail a copy of the process served to the person
designated by the insurer in the policy for the purpose by prepaid registered
or certified mail with return receipt requested. If no such person is so
designated in the policy, the Commissioner or an authorized representative of
the Commissioner shall in like manner mail a copy of the process to the broker
through whom the insurance was procured, or to the insurer at its principal
place of business, addressed to the address of the broker or insurer, as the
case may be, last of record with the Commissioner. Upon service of process upon
the Commissioner or an authorized representative of the Commissioner and its
mailing in accordance with this subsection, the court shall be deemed to have
jurisdiction in personam of the insurer.
3. The defendant insurer has 40 days from
the date of service of the summons and complaint upon the Commissioner or an
authorized representative of the Commissioner within which to plead, answer or
defend any such suit.
4. An unauthorized insurer entering into
such an insurance contract shall be deemed thereby to have authorized service
of process against it in the manner and to the effect provided in this section.
Any such contract, if issued, must contain a provision stating the substance of
this section and designating the person to whom the Commissioner or an
authorized representative of the Commissioner shall mail process as provided in
subsection 2.
5. For the purposes of this section,
“process” includes only a summons or the initial documents served in an action.
The Commissioner or an authorized representative of the Commissioner is not
required to serve any documents after the initial service of process.
(Added to NRS by 1971, 1679; A 1985, 610; 1995, 1619; 2011, 2020)
NRS 685A.205 Regulations: Compliance with federal law relating to nonadmitted
insurance. The Commissioner may
adopt regulations as necessary to ensure compliance with federal law relating
to nonadmitted insurance, including, without limitation, the Nonadmitted and
Reinsurance Reform Act, 15 U.S.C. §§ 8201, et seq.
(Added to NRS by 2011, 2012)
NRS 685A.210 Regulations; penalty.
1. The Commissioner may adopt reasonable
regulations, consistent with the provisions of this chapter, for any of the
following purposes:
(a) Effectuation of the law;
(b) Establishment of procedures through which
determination is to be made as to the eligibility of particular proposed
coverages for export;
(c) Establishment of procedures for the operation
of a nonprofit organization of brokers designed to assist brokers in complying
with the provisions of this chapter; and
(d) The use of electronic signatures and the
acceptance and transmission of electronic records and payments, including
transactions involving claims and other transactions relating to surplus lines
insurance.
2. Such regulations carry the penalty
provided by NRS 679B.130.
(Added to NRS by 1971, 1680; A 1977, 99; 1979, 1923; 1995, 1619; 2011, 3366)
NRS 685A.220 Other provisions applicable. In
addition to those referred to in other provisions of this chapter, the
following provisions of chapter 683A of
NRS, to the extent applicable and not inconsistent with the express provisions
of this chapter, also apply to surplus lines brokers:
1. NRS
683A.341;
2. NRS
683A.361;
3. NRS
683A.400;
4. NRS
683A.451;
5. NRS
683A.461;
6. NRS
683A.480;
7. NRS
683A.490; and
8. NRS
683A.520.
(Added to NRS by 1971, 1680; A 2001, 2214; 2005, 2131)
