[Rev. 11/21/2013 1:09:42 PM--2013]

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)