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Nrs: Chapter 690A - Credit Insurance


Published: 2015

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[Rev. 11/21/2013 1:14:57

PM--2013]



CHAPTER 690A - CREDIT INSURANCE

NRS 690A.010        Scope.



NRS 690A.011        Definitions.

NRS 690A.012        “Compensation”

defined.

NRS 690A.0135      “Credit

accident and health insurance” defined.

NRS 690A.015        “Credit

insurance” and “consumer credit insurance” defined.

NRS 690A.016        “Credit

life insurance” defined.

NRS 690A.0163      “Credit

transaction” defined.

NRS 690A.0167      “Credit

unemployment insurance” defined.

NRS 690A.017        “Creditor”

defined.

NRS 690A.018        “Debtor”

defined.

NRS 690A.0195      “Gross

debt” defined.

NRS 690A.0205      “Identifiable

charge” defined.

NRS 690A.0243      “Net

debt” defined.

NRS 690A.0247      “Open-end

credit” defined.

NRS 690A.045        Amounts

of credit life insurance.

NRS 690A.050        Amounts

of credit accident and health insurance or credit unemployment insurance.

NRS 690A.055        Combinations

of consumer credit insurance; prohibition or limitation by regulation.

NRS 690A.063        Commencement

of consumer credit insurance; prohibited charging or retention of payment.

NRS 690A.067        Term

and cancellation of consumer credit insurance.

NRS 690A.073        Required

disclosures.

NRS 690A.075        Acceptance

of insurance by insurer other than named insurer; nonacceptance.

NRS 690A.077        Policies

and certificates of insurance: Contents; delivery.

NRS 690A.083        Delivery

of application or notice of proposed insurance; contents; use of application or

notice to meet certain requirements.

NRS 690A.085        Policies,

forms and schedules: Filing; approval; withdrawal of approval.

NRS 690A.087        Adoption

of forms by regulation; use of forms by insurer.

NRS 690A.093        Establishment

of reasonable rates by regulation; use of certain rates without filing with

Commissioner.

NRS 690A.095        Filing

of revised schedule of premium rates.

NRS 690A.097        Refund

of unearned premiums; regulations; approval of refund formula.

NRS 690A.103        Payment

for consumer credit insurance without issuance of individual policy or group

certificate.

NRS 690A.107        Amount

charged for consumer credit insurance.

NRS 690A.120        Issuance

of policies and certificates of consumer credit insurance.

NRS 690A.130        Claims.

NRS 690A.140        Existing

insurance; choice of insurer.

NRS 690A.260        Transfers

to unauthorized insurer.

NRS 690A.273        Creditor

as agent of insurer.

NRS 690A.277        Regulations.

NRS 690A.280        Administrative

penalties; revocation or suspension of license or certificate of authority.

_________

 

      NRS 690A.010  Scope.  Any consumer

credit insurance issued in connection with loans or other credit transactions

for personal, family or household use is subject to the provisions of this

chapter except:

      1.  Insurance written in connection with a

credit transaction that is:

      (a) Secured by a first mortgage or deed of trust;

and

      (b) Made to finance the purchase of real property

or the construction of a dwelling thereon, or to refinance a prior credit

transaction made for that purpose;

      2.  Insurance that is sold as an isolated

transaction on the part of the insurer and not related to an agreement or a

plan for insuring debtors of the creditor;

      3.  Insurance for which no identifiable

charge is made to the debtor; or

      4.  Insurance on accounts receivable.

      (Added to NRS by 1971, 1771; A 1987, 2296; 2005, 2144)

      NRS 690A.011  Definitions.  As

used in this chapter, unless the context otherwise requires, the words and

terms defined in NRS 690A.012 to 690A.0247, inclusive, have the meanings ascribed to

them in those sections.

      (Added to NRS by 1987, 2287; A 2005, 2144)

      NRS 690A.012  “Compensation” defined.  “Compensation”

means any valuable consideration, direct or indirect, paid by or on behalf of

the insurer, or by any subsidiary or parent, or subsidiary of the parent of the

insurer, or by any other person to or on behalf of any group policyholder or

producer or withheld from an insurer by any group policyholder or producer, and

includes:

      1.  Paid or credited commissions or contingent

commissions.

      2.  Fees for services, consulting fees or

any other fee paid or credited within or outside this State in direct relation

to the volume of premiums produced or written in this State.

      3.  The use of electronic data processing

equipment or services, except for devices provided in lieu of books and charts

of rates and refunds usable only for that purpose.

      4.  The furnishing of supplies, except

forms approved by the Commissioner, the usual forms for claims and reports,

envelopes for transmitting claims and brochures, and books and charts of rates

and refunds.

      5.  Providing rental equipment of any type.

      6.  Advertising.

      7.  Providing telephone service without

charge or at a charge less than the usual cost.

      8.  Participation in a profit-sharing plan.

      9.  Dividends and refunds or credits based

on experience ratings.

      10.  An allowance for expenses.

      11.  Participation in stock plans or

bonuses.

      12.  Any form of credit, including the use

of money.

      13.  Commissions for reinsurance, ceded or

assumed.

      14.  Reinsurance with a nonauthorized

insurer owned or controlled by a creditor or producer or with a nonauthorized

insurer in which a creditor or producer is a stockholder.

      15.  Any commission or fee, inducement or

intention to induce, or any other consideration arising from the sale of

insurance or other product or service, except consumer credit insurance as part

of the transaction in which the indebtedness is arranged or the application for

the consumer credit insurance is made.

      (Added to NRS by 1987, 2287; A 2005, 2144)

      NRS 690A.0135  “Credit accident and health insurance” defined.  “Credit accident and health insurance” means

insurance on a debtor to provide indemnity for payments or debt becoming due on

a specific loan or other credit transaction while the debtor is disabled as

defined in the policy.

      (Added to NRS by 2005, 2137)

      NRS 690A.015  “Credit insurance” and “consumer credit insurance” defined.  “Credit insurance” or “consumer credit

insurance” means any or all of the following:

      1.  Credit life insurance;

      2.  Credit accident and health insurance;

      3.  Credit unemployment insurance; or

      4.  Any other insurance defined in this

chapter.

      (Added to NRS by 1987, 2288; A 2005, 2145)

      NRS 690A.016  “Credit life insurance” defined.  “Credit

life insurance” means insurance on the life of a debtor pursuant to or in

connection with a specific loan or other credit transaction to provide for

satisfaction of a debt, in whole or in part, upon the death of an insured

debtor.

      (Added to NRS by 1987, 2288; A 2005, 2145)

      NRS 690A.0163  “Credit transaction” defined.  “Credit

transaction” means any transaction for which the terms of repayment of money

loaned or loan commitment made, or payment of goods, services or properties

sold or leased, is to be made at a future date or dates.

      (Added to NRS by 2005, 2137)

      NRS 690A.0167  “Credit unemployment insurance” defined.  “Credit unemployment insurance” means

insurance on a debtor to provide indemnity for payments or a debt becoming due

on a specific loan or other credit transaction while the debtor is

involuntarily unemployed as defined in the policy.

      (Added to NRS by 2005, 2137)

      NRS 690A.017  “Creditor” defined.  “Creditor”

means the lender of money or vendor or lessor of goods, services, property,

rights or privileges for which payment is arranged through a credit

transaction, and includes:

      1.  The successor to the right, title or interest

of;

      2.  An affiliate, associate or subsidiary

of;

      3.  Any director, officer or employee of;

or

      4.  Any other person in any way associated

with,

Ê any such

lender, vendor or lessor.

      (Added to NRS by 1987, 2288)

      NRS 690A.018  “Debtor” defined.  “Debtor”

means a borrower of money or a purchaser or lessee of goods, services,

property, rights or privileges for which payment is arranged through a credit

transaction.

      (Added to NRS by 1987, 2288)

      NRS 690A.0195  “Gross debt” defined.  “Gross

debt” means the sum of the remaining payments owed to a creditor by a debtor.

      (Added to NRS by 2005, 2137)

      NRS 690A.0205  “Identifiable charge” defined.  “Identifiable

charge” means a charge for consumer credit insurance that is made to debtors

who have that insurance and not made to debtors who do not have that insurance.

The term includes a charge for insurance that is disclosed in the credit

agreement or other instrument furnished to the debtor which sets forth the

financial elements of the credit transaction and any difference in the finance,

interest, service or other similar charge made to debtors who are in similar

circumstances except for the insured or noninsured status of the debtor or of

the property used as security for the credit transaction.

      (Added to NRS by 2005, 2137)

      NRS 690A.0243  “Net debt” defined.  “Net

debt” means the amount required to liquidate the remaining debt in a single

lump-sum payment, excluding all unearned interest and other unearned finance

charges.

      (Added to NRS by 2005, 2138)

      NRS 690A.0247  “Open-end credit” defined.  “Open-end

credit” means credit extended by a creditor under an agreement in which:

      1.  The creditor reasonably contemplates

repeated transactions;

      2.  The creditor periodically imposes a

finance charge on any outstanding unpaid balance; and

      3.  The amount of credit that may be

extended to the debtor during the term of the agreement up to any limit set by

the creditor is generally made available to the extent that any outstanding

balance is repaid.

      (Added to NRS by 2005, 2138)

      NRS 690A.045  Amounts of credit life insurance.

      1.  Except as otherwise provided in this

section, the amount of credit life insurance must not exceed the greater of the

actual net debt or the scheduled net debt.

      2.  If coverage is written on the actual net

debt, the amount payable at the time of loss must not be less than the actual

net debt less any payments that are more than 2 months past due.

      3.  If the coverage is written on any

scheduled net debt, the amount payable at the time of loss must not be less

than:

      (a) If the actual net debt is less than or equal

to the scheduled net debt, the scheduled net debt;

      (b) If the actual net debt is greater than the

scheduled net debt but less than or equal to the scheduled net debt plus 2

months of payments, the actual net debt; or

      (c) If the actual net debt is greater than the

scheduled net debt plus 2 months of payments, the scheduled net debt plus 2

months of payments.

      4.  If a premium is assessed to the debtor

on a monthly basis and is based on the actual net debt, the amount payable at

the time of loss must not be less than the actual net debt on the date of

death. If the premium is based on a balance that does not include accrued past

due interest, the amount payable at the time of loss must not be less than the

actual net debt less any accrued interest that is more than 2 months past due.

      5.  Insurance on agricultural loan

commitments that do not exceed 1 year in duration may be written for not more

than the amount of the loan on a nondecreasing or level term plan.

      6.  Insurance on educational loan

commitments may be written for the net unpaid debt plus any unused commitment.

      7.  Coverage may be written for less than

the net debt through the following methods:

      (a) The amount of insurance may be the lesser of

a stated level amount and the amount determined in accordance with subsection

2;

      (b) The amount of insurance may be the lesser of

a stated level amount and the amount determined in accordance with subsection

3;

      (c) The amount of insurance may be a constant

percentage of the amount determined in accordance with subsection 2;

      (d) The amount of insurance may be a constant

percentage of the amount determined in accordance with subsection 3; or

      (e) In the absence of any exclusions for a

preexisting condition, the amount of insurance payable in the event of death by

natural causes may be limited to the balance as it existed 6 months before the

date of death if:

             (1) There have been one or more increases

in the outstanding balance during the 6-month period other than increases

resulting from the accrual of interest or late charges; and

             (2) Evidence of individual insurability

has not been required during the 6-month period.

      8.  Other kinds of insurance may be used if

those kinds are not inconsistent with the provisions of this section.

      (Added to NRS by 2005, 2138)

      NRS 690A.050  Amounts of credit accident and health insurance or credit

unemployment insurance.

      1.  Except as otherwise provided in

subsection 2, the total amount of periodic indemnity payable pursuant to a

policy of credit accident and health insurance or credit unemployment insurance

in the event of disability or unemployment, as defined in the policy, must not

exceed the aggregate of the periodic scheduled unpaid installments of the gross

debt, and the amount of each periodic indemnity payment must not exceed the

original gross debt divided by the number of periodic installments.

      2.  For credit accident and health

insurance or credit unemployment insurance written in connection with an

open-end credit agreement, the amount of insurance must not exceed the gross

debt which would accrue on that amount using the periodic indemnity. Subject to

any policy maximum, the periodic indemnity must not be less than the minimum

repayment schedule of the creditor.

      (Added to NRS by 1971, 1773; A 1987, 2297; 2005, 2145)

      NRS 690A.055  Combinations of consumer credit insurance; prohibition or

limitation by regulation.  The types

of consumer credit insurance defined in this chapter may be written separately

or in combination with other types of consumer credit insurance on an

individual policy or group policy basis. The Commissioner may by regulation

prohibit or limit any combination.

      (Added to NRS by 2005, 2138)

      NRS 690A.063  Commencement of consumer credit insurance; prohibited charging

or retention of payment.

      1.  Except as otherwise provided in this

section, for consumer credit insurance that is made available to and elected by

a debtor before or with the credit transaction to which it relates, the term of

the insurance must, subject to acceptance by the insurer, commence on the date

on which the debtor becomes obligated to the creditor. If the insurer requires

evidence of individual insurability and the evidence is provided to the insurer

more than 30 days after the date on which the debtor becomes obligated to the

creditor, the insurance may commence on the date on which the insurer

determines the evidence to be satisfactory.

      2.  Except as otherwise provided in this

section, for consumer credit insurance that is made available to and elected by

a debtor after the credit transaction to which it relates, the term of the

insurance must, subject to acceptance by the insurer, commence on a date not

earlier than the date the election is made by the debtor and not later than 30

days after the date on which the insurance company accepts the risk for

coverage. If the coverage does not commence on the date on which the insurance

company accepts the risk for coverage, the date that coverage commences must be

related to an objective method for determining the date, including, without

limitation, the billing cycle, the payment cycle or a calendar month.

      3.  If a group policy provides coverage

with respect to debts existing on the effective date of the policy, the

insurance related to a debt must not commence before the effective date of the

group policy.

      4.  A creditor or insurer shall not charge

or retain payment from a debtor before commencement of the insurance to which

the charge is related.

      (Added to NRS by 2005, 2139)

      NRS 690A.067  Term and cancellation of consumer credit insurance.

      1.  The term of any consumer credit

insurance must not extend beyond the date of termination specified in the

policy. The date of termination of the insurance must not occur more than 15 days

after the scheduled maturity date of the debt to which it relates unless:

      (a) The date is extended at no additional cost to

the debtor; or

      (b) The date is extended pursuant to a written

agreement signed by the debtor and relates to a variable rate credit

transaction or a deferral, renewal, refinancing or consolidation of debt.

      2.  If a debt is discharged because of any

renewal, refinancing or consolidation before the scheduled date of termination

of the consumer credit insurance, the insurance must be cancelled before any

new consumer credit insurance is written in relation to the renewed, refinanced

or consolidated debt.

      3.  If consumer credit insurance is

terminated before the scheduled termination date, unless the insurance is

terminated because of the performance by the insurer of all obligations with

respect to the insurance, the insurer shall make an appropriate refund or

credit to the debtor of any unearned charge that was paid by the debtor.

      4.  A debtor may cancel consumer credit

insurance at any time by providing a request to the insurer. The insurer may

require the request to be submitted in writing and may require the debtor to

surrender any individual policy or group certificate. The right of the debtor

to cancel the insurance may be subject to the terms of the credit transaction.

      (Added to NRS by 2005, 2139)

      NRS 690A.073  Required disclosures.

      1.  Before a debtor elects to purchase

consumer credit insurance in connection with a credit transaction, the

following information must be disclosed to the debtor in writing:

      (a) That the purchase of consumer credit insurance

from the creditor is not mandatory and is not a condition for obtaining credit

approval;

      (b) If more than one type of consumer credit

insurance is made available to the debtor, whether the debtor may purchase each

separately or only as a package;

      (c) The conditions of eligibility;

      (d) That if the debtor has other insurance that

covers the risk, the debtor may not want or need consumer credit insurance;

      (e) That the debtor may cancel the insurance at

any time, or if evidence of insurance is required for the extension of credit,

upon proof of insurance that is acceptable to the creditor, and obtain a refund

of or credit for:

             (1) If the cancellation is not more than

30 days after the debtor receives the individual policy or certificate of

insurance, any premium paid by the debtor; or

             (2) If the cancellation is more than 30

days after the debtor receives the individual policy or certificate of

insurance, any unearned premium paid by the debtor;

      (f) A brief description of the coverage,

including a description of the amount, term, exceptions, limitations and

exclusions, the insured event, any waiting or elimination period, any

deductible, any applicable waiver of premium, the person who would receive any

benefits, and the premium or premium rate for the consumer credit insurance;

and

      (g) If the premium or insurance charge is

financed, that it will be subject to finance charges at the rate applicable to

the credit transaction.

      2.  The disclosures required pursuant to

subsection 1:

      (a) If made in connection with consumer credit

insurance offered at the same time as the extension of credit or offered

through direct mail advertisements, must be made in writing and presented to

the customer in a clear and conspicuous manner; or

      (b) If made in connection with consumer credit

insurance offered after the extension of credit other than through direct mail

advertisements, may be provided orally or electronically if written disclosures

are provided not later than the earlier of:

             (1) Ten days after the debtor elects to

accept the coverage; or

             (2) The date any other written material is

provided to the debtor.

      (Added to NRS by 2005, 2140)

      NRS 690A.075  Acceptance of insurance by insurer other than named insurer;

nonacceptance.

      1.  If a named insurer does not accept the

insurance and another insurer accepts the insurance, the insurer shall provide

an individual policy or group certificate that includes the name and address of

the home office of the insurer who accepted the insurance and the amount of the

premium to be charged. If the premium is less than the premium paid by the

debtor, the insurer shall provide a refund of the excess premium not more than

30 days after the date it was paid by the debtor.

      2.  If a named insurer does not accept the

insurance and no other insurer accepts the insurance, a person who received any

premium payment related to the insurance shall refund the payment not more than

30 days after the date it was paid by the debtor.

      (Added to NRS by 2005, 2141)

      NRS 690A.077  Policies and certificates of insurance: Contents; delivery.

      1.  All consumer credit insurance must be

evidenced by an individual policy or a group certificate that is delivered to

the debtor.

      2.  The individual policy or group

certificate must, in addition to other requirements of law, include:

      (a) The name and address of the home office of

the insurer;

      (b) The name of each debtor or, on a certificate

of insurance, the identity by name or otherwise of each debtor;

      (c) The amount of the premium or payment of the

debtor stated separately for each type of coverage or as a package or, for

open-end credit, the premium rate, basis of the calculation of premiums and

balance to which the premium rate applies;

      (d) A complete description of the coverage or

coverages, including the amount, term and any exceptions, limitations and

exclusions of coverage;

      (e) A statement that all benefits must be paid to

the creditor to reduce or extinguish the unpaid debt and that if the benefits

exceed the unpaid debt, any excess benefit must be paid to the debtor, to a

beneficiary, other than the creditor, named by the debtor or to the estate of

the debtor; and

      (f) If the scheduled term of the insurance is

less than the scheduled term of the credit transaction, a statement indicating

that fact set forth on the face of the individual policy or certificate of

insurance in not less than 10-point bold type.

      3.  The insurer shall deliver the

individual policy or group certificate to the debtor upon acceptance of

insurance by the insurer and not more than 30 days after the debtor elects to

purchase the insurance. An individual policy or group certificate related to

open-end credit or consumer credit insurance that is requested by the debtor

after the date of the credit transaction to which it is related shall be deemed

to have been delivered at the time the debtor elected to purchase insurance if

the actual delivery is made not more than 30 days after the date on which the

insurer accepts the insurance.

      (Added to NRS by 2005, 2140)

      NRS 690A.083  Delivery of application or notice of proposed insurance;

contents; use of application or notice to meet certain requirements.

      1.  If the individual policy or group

certificate is not delivered to the debtor at the time the debt is incurred or

at such other time as the debtor purchases consumer credit insurance, a copy of

the application or a notice of proposed insurance, signed by the debtor, must

be delivered to the debtor. The application or notice of proposed insurance

must include:

      (a) The name and address of the home office of

the insurer;

      (b) The name of each debtor;

      (c) The premium or amount of payment by the

debtor for the insurance;

      (d) The amount, term and a brief description of

the coverage; and

      (e) A statement that upon acceptance by the

insurer, the insurance will become effective as described in NRS 690A.063.

      2.  The application or notice of insurance

provided pursuant to subsection 1 must:

      (a) Refer exclusively to consumer credit

insurance; and

      (b) Be separate from the loan, sale or other

credit statement, instrument or agreement unless the information required

pursuant to subsection 1 is prominently set forth in the statement, instrument

or agreement.

      3.  The application or notice of insurance

provided pursuant to subsection 1 may be used to meet the requirements of NRS 690A.073 and 690A.077

if it includes the information required by those sections.

      (Added to NRS by 2005, 2141)

      NRS 690A.085  Policies, forms and schedules: Filing; approval; withdrawal of

approval.

      1.  Except as otherwise provided in NRS 690A.087 and 690A.093,

all policies, certificates of insurance, applications for insurance, enrollment

forms, endorsements and riders delivered or issued for delivery in this State

and the schedules of premium rates related thereto must be filed with the

Commissioner.

      2.  An item filed with the Commissioner

pursuant to subsection 1 may not be issued or used until 60 days after it is

filed with the Commissioner or until the written prior approval of the

Commissioner is obtained.

      3.  The Commissioner shall, not more than

60 days after an item is submitted to the Commissioner pursuant to subsection

1, disapprove the item if the benefits are not reasonable in relation to the

premium charged or if the item contains provisions that are unjust, unfair,

inequitable, misleading or deceptive or encourage misrepresentation of the

coverage or are contrary to any provision of the Code or any regulation adopted

pursuant to the Code. If the Commissioner does not disapprove an item filed

pursuant to subsection 1 in accordance with this subsection, the item shall be

deemed to be approved.

      4.  If the Commissioner notifies an insurer

that an item is disapproved pursuant to subsection 3, the insurer shall not use

the item. The notice must include the reason for the disapproval and state that

a hearing will be granted not more than 30 days after the insurer submits a

written request for a hearing to the Commissioner, unless postponed by mutual

consent or by order of the Commissioner.

      5.  The Commissioner may hold a hearing to

withdraw approval of an item submitted pursuant to subsection 1 not less than

20 days after providing a written notice of the hearing to the insurer. The written

notice must include one of the reasons described in subsection 3 for the

proposed withdrawal of approval of the item. An insurer shall not use an item

if approval of the item is withdrawn pursuant to this subsection.

      (Added to NRS by 2005, 2142)

      NRS 690A.087  Adoption of forms by regulation; use of forms by insurer.

      1.  The Commissioner may adopt by

regulation forms for use in the issuance of consumer credit insurance,

including applications, policies, forms for claims and any other forms required

for the sale, issuance and administration of consumer credit insurance. An

insurer may elect to use those forms in lieu of any other forms.

      2.  If an officer of the insurer submits,

in the manner prescribed by the Commissioner, a written certification to the

Commissioner that the forms used by the insurer are identical to those adopted

by the Commissioner, the insurer is not required to file those forms with the

Commissioner for approval pursuant to NRS 690A.085.

      (Added to NRS by 2005, 2142)

      NRS 690A.093  Establishment of reasonable rates by regulation; use of certain

rates without filing with Commissioner.

      1.  The Commissioner shall, by regulation,

establish reasonable rates as described in this chapter and in accordance with

the standards established in NRS 686B.050

and 686B.060. The rates must be

reasonable in relation to the benefits provided and must not be excessive,

inadequate or unfairly discriminatory.

      2.  The Commissioner may, by regulation,

establish rates that an insurer may use without filing pursuant to NRS 690A.085. In establishing such rates, the

Commissioner shall consider and apply the following factors:

      (a) Actual and expected loss experience;

      (b) General and administrative expenses;

      (c) Loss settlement and adjustment expenses;

      (d) Reasonable creditor compensation;

      (e) The manner in which premiums are charged;

      (f) Other acquisition costs;

      (g) Reserves;

      (h) Taxes;

      (i) Regulatory license fees and fund assessments;

      (j) Reasonable insurer profit; and

      (k) Other relevant data consistent with generally

accepted actuarial standards.

      (Added to NRS by 2005, 2142)

      NRS 690A.095  Filing of revised schedule of premium rates.  Except as otherwise provided in NRS 690A.093, if an insurer revises its schedule of

premium rates, the insurer shall file the revised schedule with the

Commissioner pursuant to NRS 690A.085. An insurer

shall not issue consumer credit insurance for which the premium rates differ

from the rates determined by the schedule approved by the Commissioner.

      (Added to NRS by 2005, 2143)

      NRS 690A.097  Refund of unearned premiums; regulations; approval of refund

formula.

      1.  Each individual policy or group

certificate must provide for a refund of unearned premiums if the consumer

credit insurance is cancelled before the scheduled date of termination of the

insurance.

      2.  Except as otherwise provided in this

section, any refund must be provided to the person to whom it is entitled as

soon as practicable after the date of cancellation of the insurance.

      3.  The Commissioner shall, by regulation,

establish the minimum amount of unearned premiums that must remain outstanding

at the time of cancellation in order for a person to be entitled to a refund.

If the amount of unearned premiums that remains outstanding at the time of

cancellation is less than the minimum amount established by regulation, the person

is not entitled to a refund.

      4.  The formula that an insurer uses to

determine the amount of a refund must be submitted to and approved by the

Commissioner before it is used.

      (Added to NRS by 2005, 2143)

      NRS 690A.103  Payment for consumer credit insurance without issuance of

individual policy or group certificate.  If

a creditor requires a debtor to make a payment for consumer credit insurance

and an individual policy or group certificate is not issued, the creditor shall

immediately notify the debtor in writing and make an appropriate credit to the

account of the debtor or issue a refund.

      (Added to NRS by 2005, 2143)

      NRS 690A.107  Amount charged for consumer credit insurance.  The amount charged to a debtor for any

consumer credit insurance must not exceed the amount of the premiums charged by

the insurer as determined at the time that the contract was accepted by the

debtor.

      (Added to NRS by 2005, 2143)

      NRS 690A.120  Issuance of policies and certificates of consumer credit

insurance.  All policies and

certificates of consumer credit insurance may be delivered or issued for

delivery in this State only by an insurer authorized to do an insurance

business in this State, and may be issued only through holders of licenses or

certificates of authority issued by the Commissioner.

      (Added to NRS by 1971, 1776; A 1987, 2302; 2005, 2145)

      NRS 690A.130  Claims.

      1.  All claims must be promptly reported to

the insurer or its designated representative, and the insurer shall maintain

adequate files on all reported claims. All claims must be settled as soon as

practicable and in accordance with the terms of the insurance contract.

      2.  All claims must be paid by draft drawn

upon the insurer, by electronic funds transfer or by check of the insurer to

the order of:

      (a) The claimant to whom payment of the claim is

due pursuant to the provisions of the policy; or

      (b) Any other person designated by the claimant

to whom payment is due.

      3.  A plan or arrangement may not be used

whereby a person other than the insurer or its designated claim representative

is authorized to settle or adjust claims. The creditor may not be designated as

the representative for the insurer in adjusting a claim, except that a group

policyholder may, by arrangement with the group insurer, draw drafts,

electronic transfers or checks in payment of claims due the group policyholder

subject to the periodic audit by the insurer.

      (Added to NRS by 1971, 1776; A 1987, 2302; 2005, 2145)

      NRS 690A.140  Existing insurance; choice of insurer.  When

any form of consumer credit insurance is required as additional security for

any debt, the debtor may furnish the required amount of insurance through

existing policies of insurance owned or controlled by the debtor or procure or

furnish the required coverage through any insurer authorized to transact the

business of insurance in this State.

      (Added to NRS by 1971, 1777; A 1987, 2303; 2005, 2146)

      NRS 690A.260  Transfers to unauthorized insurer.

      1.  Except as otherwise provided in

subsection 2, an authorized insurer issuing consumer credit insurance may not

enter into any agreement whereby the authorized insurer transfers, by

reinsurance or otherwise, to an unauthorized insurer, as they relate to

consumer credit insurance written or issued in this State:

      (a) A substantial portion of the risk of loss

under the consumer credit insurance written by the authorized insurer in this

State;

      (b) All of one or more kinds, lines, types or

classes of consumer credit insurance;

      (c) All of the consumer credit insurance produced

through one or more agents, agencies or creditors;

      (d) All of the consumer credit insurance written

or issued in a designated geographical area; or

      (e) All of the consumer credit insurance under a

policy of group insurance.

      2.  An authorized insurer may make the

transfers listed in subsection 1 to an unauthorized insurer if the unauthorized

insurer:

      (a) Maintains security on deposit with the

Commissioner in an amount which when added to the actual capital and surplus of

the insurer is equal to the capital and surplus required of an authorized stock

insurer pursuant to NRS 680A.120. The

security may consist only of the following:

             (1) Cash.

             (2) General obligations of, or obligations

guaranteed by, the Federal Government, this State or any of its political

subdivisions. These obligations must be valued at the lower of market value or

par value.

             (3) Any other type of security that would

be acceptable if posted by a domestic or foreign insurer.

      (b) Files an annual statement with the

Commissioner pursuant to NRS 680A.270.

      (c) Maintains reserves on its consumer credit

insurance business pursuant to NRS

681B.050.

      (d) Values its assets and liabilities pursuant to

NRS 681B.010 to 681B.040, inclusive.

      (e) Agrees to examinations conducted by the

Commissioner pursuant to NRS 679B.230.

      (f) Complies with the standards adopted by the

Commissioner pursuant to NRS 679A.150.

      (g) Does not hold, issue or have an arrangement

for holding or issuing any of its stock for which dividends are paid based on:

             (1) The experience of a specific risk of

all of one or more kinds, lines, types or classes of insurance;

             (2) All of the business produced through

one or more agents, agencies or creditors;

             (3) All of the business written in a

designated geographical area; or

             (4) All of the business written for one or

more forms of insurance.

      (Added to NRS by 1987, 2294; A 2005, 2146)

      NRS 690A.273  Creditor as agent of insurer.  Except

as otherwise prohibited by law, any duty imposed on an insurer pursuant to this

chapter may be carried out by a creditor who is acting as an agent of the

insurer.

      (Added to NRS by 2005, 2143)

      NRS 690A.277  Regulations.  The

Commissioner may adopt regulations to carry out the provisions of this chapter.

      (Added to NRS by 2005, 2143)

      NRS 690A.280  Administrative penalties; revocation or suspension of license or

certificate of authority.  In

addition to any other penalty provided by law, any person who violates any

provision of this chapter or a regulation adopted or a final order of the

Commissioner issued pursuant to this chapter shall, after notice and hearing,

pay an administrative penalty:

      1.  In an amount not to exceed $5,000; or

      2.  If the violation is willful, in an

amount not to exceed $10,000,

Ê and the

Commissioner may, after notice and a hearing, revoke or suspend the license or

certificate of authority of that person.

      (Added to NRS by 1987, 2296; A 2005, 2147)