This chapter constitutes and may be
cited as the Surplus Lines Law.
(Added to NRS by 1971, 1673)
The Surplus Lines 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:
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)
As used in this chapter:
1. Unless the context otherwise requires, “broker” means a surplus
lines broker duly licensed as such under this chapter.
2. To “export” means to place in an unauthorized insurer under
this chapter insurance covering a subject of insurance resident, located
or to be performed in Nevada.
(Added to NRS by 1971, 1673)
If certain insurance
coverages cannot be procured from authorized insurers, such coverages,
designated in this chapter as “surplus lines,” may be procured from
unauthorized insurers, subject to the following conditions:
1. The insurance must be procured through a surplus lines broker
licensed as such under this chapter.
2. The full amount of insurance required must not be procurable,
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.
(Added to NRS by 1971, 1673; A 1971, 1939)
1. At the time of effecting any surplus lines insurance the broker
shall execute an affidavit, 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 file this affidavit with the report of
coverage and any other information the Commissioner requires within 90
days after the insurance is so effected, as required under regulations
adopted pursuant to NRS 685A.210 .
(Added to NRS by 1971, 1674; A 1987, 1149)
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 he 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. The broker shall file with or as directed by the Commissioner a
memorandum as to each such coverage placed by him 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)
1. A broker shall not knowingly place surplus lines insurance with
an insurer which is unsound financially or ineligible pursuant to this
section.
2. Except as otherwise provided in this section, an insurer is not
eligible to accept surplus lines risks pursuant to this chapter unless it
has surplus as to policyholders in an amount of not less than $15,000,000
and, if an alien insurer, unless 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.
(d) An insurance exchange created by the laws of a state, the
insurance exchange shall have and maintain a trust fund in an amount of
not less than $75,000,000 or have a surplus as to policyholders in an
amount of not less than $75,000,000. If an insurance exchange maintains
money for the protection of all policyholders, each syndicate shall
maintain minimum capital and surplus of not less than $15,000,000 and
must qualify separately to be eligible for the acceptance of surplus
lines risks pursuant to this chapter.
Ê The Commissioner may require larger trust funds or surplus as to
policyholders than those set forth in this section if, in his judgment,
the volume of business being transacted or proposed to be transacted
warrants larger amounts.
3. An insurer is not eligible to write surplus lines of insurance
unless it has established a reputation for financial integrity and
satisfactory practices in underwriting and handling claims. In addition,
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.
4. The Commissioner may from time to time compile or approve a
list of all surplus lines insurers deemed by him to be eligible
currently, and may mail a copy of the list to each broker at his office
last of record with the Commissioner. To be placed on the list, a surplus
lines insurer must file an application with the Commissioner. The
application must be accompanied by a nonrefundable fee of $2,450. This
subsection does not require the Commissioner to determine the actual
financial condition or claims practices of any unauthorized insurer. The
status of eligibility, if granted by the Commissioner, indicates only
that the insurer appears to be sound financially and to have satisfactory
claims practices, and that the Commissioner has no credible evidence to
the contrary. While any such list is in effect, the broker shall restrict
to the insurers so listed all surplus lines business placed by him.
(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 )
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 his
direction 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 he 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 his 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, he 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 his pleasure.
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)
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)
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 he 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 his
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 )
Each insurance contract procured and delivered as a surplus lines
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 )
Insurance
contracts procured as surplus lines 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)
1. As to a surplus lines risk which has been assumed by an
unauthorized insurer pursuant to the Surplus Lines 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 Surplus Lines Law shall be deemed thereby to have subjected itself to
the terms of this section.
(Added to NRS by 1971, 1676)
[Effective until the date of the repeal of 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 out as or be a surplus lines
broker with respect to subjects of insurance resident, located or to be
performed in this State or elsewhere unless he 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 the applicable fee 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 him. 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 the
applicable fee 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 him 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) The applicable fee for renewal;
(c) A penalty in an amount that is equal to 50 percent of the
applicable fee for renewal; 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 )
[Effective on the date of the repeal of 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 out as or be a surplus lines
broker with respect to subjects of insurance resident, located or to be
performed in this State or elsewhere unless he 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 the applicable fee 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 him.
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 the applicable fee 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 him within 30 days after the expiration of the
license if the request is accompanied by:
(a) The applicable fee for renewal;
(b) A penalty in an amount that is equal to 50 percent of the
applicable fee for renewal; 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 , effective on the date of the repeal of
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)
[Expires by
limitation on the date of the repeal of 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 he 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 he 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)
[Expires by limitation on the date of the repeal of 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)
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 annual statement or to remit
the tax as required by NRS 685A.170
and 685A.180 ;
(b) If the broker fails to maintain an office in this state or in
the state where he was issued a license as a resident broker, or to keep
the records, or to allow the Commissioner to examine his records as
required by this chapter, or if he removes his records from the state; or
(c) If 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 )
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)
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)
1. Each broker shall keep in his office a full and true record of
each surplus lines coverage procured by him, including a copy of each
daily report, if any, a copy of each certificate of insurance issued by
him, 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 his representative
at all times within 5 years after issuance of the coverage to which it
relates.
(Added to NRS by 1971, 1678; A 1999, 2799 )
1. Each broker shall on or before March 1 of each year file with
the Commissioner a statement verified by the broker of all surplus lines
insurance transacted by him during the preceding calendar year. A
statement must be filed whether or not the broker has transacted any
business during the preceding year.
2. The statement must be on forms as prescribed and furnished by
the Commissioner, and must contain such information as the Commissioner
may reasonably require.
3. If a broker has filed any reports pursuant to NRS 685A.175
, the annual statement must include
any necessary reconciliation of the quarterly reports.
(Added to NRS by 1971, 1678; A 1985, 600)
Within 45 days after the end of each calendar quarter, a broker
who has written coverage which will require him to pay more than $1,000
in taxes for coverage written in that calendar quarter shall pay the tax
for the quarter to the Commissioner and shall file with the Commissioner,
or with a nonprofit organization of brokers in accordance with
regulations adopted by the Commissioner pursuant to NRS 685A.210 , a copy of a quarterly report which includes
an accounting of:
1. The aggregate gross premiums for the quarter;
2. The aggregate of the return premiums received;
3. The amount of tax remitted to the Commissioner; and
4. The amount of aggregate tax remitted to each other state for
which an allocation is made pursuant to NRS 680B.030 .
Ê The report must be on a form approved by the Commissioner.
(Added to NRS by 1985, 600; A 1995, 1617)
1. On or before March 1 of each year, each broker shall pay to the
Commissioner a tax on surplus lines coverages written by him in
unauthorized insurers during the preceding calendar year at the same rate
of tax as imposed by law on the premiums of similar coverages written by
authorized insurers. If a broker has paid any taxes pursuant to NRS
685A.175 , he shall deduct the total
paid from the tax due and pay the remainder, if any.
2. 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 filing affidavits or reports of coverage.
3. If a contract for surplus lines insurance covers risks or
exposures only partially in this State, the tax so payable must be
computed on that portion of the premium properly allocable to the risks
or exposures located in this State. The Commissioner may adopt
regulations which establish standards for allocating premiums for risks
located in this State in the same manner as premiums are allocated
pursuant to NRS 680B.030 .
4. The Commissioner shall promptly deposit all taxes collected by
him pursuant to this section 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.
(Added to NRS by 1971, 1678; A 1983, 827; 1985, 601; 1995, 1618;
2003, 3302 )
1. A broker who fails to make and file the annual statement
required pursuant to NRS 685A.170
before April 1 after the due date of the statement, 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 before April 1 after the date upon which the
tax is due 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 him, 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)
1. An unauthorized insurer effecting insurance under the
provisions of the Surplus Lines 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 his
authorized representative and payment of the fee specified in NRS
680B.010 . The Commissioner or his
authorized representative 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 his authorized representative 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 his authorized representative 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 his authorized
representative 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
his authorized representative 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
his authorized representative is not required to serve any documents
after the initial service of process.
(Added to NRS by 1971, 1679; A 1985, 610; 1995, 1619)
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; and
(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.
2. Such regulations carry the penalty provided by NRS 679B.130
.
(Added to NRS by 1971, 1680; A 1977, 99; 1979, 1923; 1995, 1619)
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 )
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