USA Statutes : nevada
Title : Title 57 - INSURANCE
Chapter : CHAPTER 686A - TRADE PRACTICES AND FRAUDS; FINANCING OF PREMIUMS
The purpose of NRS 686A.010 to 686A.310 , inclusive, is to regulate trade practices
in the business of insurance in accordance with the intent of Congress as
expressed in the Act of Congress approved March 9, 1945, being c. 20, 59
Stat. 33, also designated as 15 U.S.C. §§ 1011 to 1015, inclusive, and
Title V of Public Law 106-102, 15 U.S.C. §§ 6801 et seq.
(Added to NRS by 1971, 1688; A 2001, 2214 )
1. Notwithstanding any other provision of law, the Commissioner
has exclusive jurisdiction in regulating the subject of trade practices
in the business of insurance in this state.
2. The Commissioner shall establish a program within the Division
to investigate any act or practice which constitutes an unfair or
deceptive trade practice in violation of the provisions of NRS 686A.010
to 686A.310 , inclusive.
(Added to NRS by 1975, 1284; A 1995, 2698)
A
person shall not engage in this state in any practice which is defined in
NRS 686A.010 to 686A.310 , inclusive, as, or determined pursuant to
NRS 686A.170 to be, an unfair method
of competition or an unfair or deceptive act or practice in the business
of insurance.
(Added to NRS by 1971, 1688; A 1975, 1287; 1977, 432)
1. Disclosure of nonpublic personal information in a manner
contrary to the provisions of subchapter 1 of Title V of Public Law
106-102, 15 U.S.C. §§ 6801-6809 is an unfair act or practice in the
business of insurance within the meaning of this chapter.
2. As used in this section, “nonpublic personal information” has
the meaning ascribed to it in 15 U.S.C. § 6809(4).
3. The Commissioner shall adopt regulations necessary to carry out
the provisions of this section.
(Added to NRS by 2001, 2214 )
A person shall not make, issue, circulate or cause to be
made, issued or circulated, any estimate, illustration, circular,
statement, sales presentation or comparison which:
1. Misrepresents the benefits, advantages, conditions or terms of
any insurance policy;
2. Misrepresents the dividends or share of the surplus to be
received on any insurance policy;
3. Makes any false or misleading statement as to the dividends or
share of surplus previously paid on any insurance policy;
4. Is misleading or is a misrepresentation as to the financial
condition of any person, or as to the legal reserve system upon which any
life insurer operates;
5. Uses any name or title of any policy or class of insurance
policies misrepresenting the true nature thereof;
6. Is a misrepresentation for the purpose of inducing or tending
to induce the lapse, forfeiture, exchange, conversion or surrender of any
insurance policy;
7. Is a misrepresentation for the purpose of effecting a pledge or
assignment of or effecting a loan against any insurance policy; or
8. Misrepresents any insurance policy as being shares of stock.
(Added to NRS by 1971, 1688; A 1975, 1287)
No
person shall make, publish, disseminate, circulate or place before the
public, or cause, directly or indirectly, to be made, published,
disseminated, circulated or placed before the public, in a newspaper,
magazine or other publication, or in the form of a notice, circular,
pamphlet, letter or poster, or over any radio or television station, or
in any other way, any advertisement, announcement or statement containing
any assertion, representation or statement with respect to the business
of insurance or with respect to any person in the conduct of his
insurance business, which is untrue, deceptive or misleading.
(Added to NRS by 1971, 1688)
No person shall make or
issue, or cause to be made or issued, any written or oral statement
misrepresenting or making misleading comparison as to the terms,
conditions, benefits or advantages of any insurance policy for the
purpose of inducing, or attempting or tending to induce, any other person
to lapse, forfeit, surrender, borrow against, retain, exchange, convert
or otherwise deal with or dispose of any insurance policy.
(Added to NRS by 1971, 1688)
A person who is an insurer or an agent or employee
of an insurer shall not place before the public by any means any
advertisement, announcement or statement which uses the existence of the
Nevada Insurance Guaranty Association or the Nevada Life and Health
Insurance Guaranty Association for the purpose of inducing the purchase
of, or discouraging the termination of, any insurance covered by the
Association. This section does not apply to either of the associations
named.
(Added to NRS by 1977, 432; A 1991, 882)
In addition to other
powers of the Commissioner in respect thereto, the Commissioner may by
regulation require persons who replace or offer or propose to replace
existing life insurance with other life insurance, to leave with the
policyholder written, signed and dated statements which fully and
accurately compare the terms, conditions and benefits of the existing
policy with the proposed policy.
(Added to NRS by 1971, 1689)
1. A person subject to regulation under this Code shall not
knowingly make or cause to be made any false entry of a material fact in
any book, report or statement of any person or knowingly omit to make a
true entry of any material fact pertaining to such person’s business in
any book, report or statement of such person.
2. A person shall not knowingly file with any supervisory or other
public officer, or knowingly make, publish, disseminate, circulate or
deliver to any person, or place before the public, or knowingly cause
directly or indirectly, to be made, published, disseminated, circulated,
delivered to any person, or placed before the public, any false material
statement of fact as to the financial condition of a person.
3. Any person who violates, or with like intent, aids or abets any
violation of this section is guilty of a gross misdemeanor.
(Added to NRS by 1971, 1689; A 1975, 1287)
No person shall
make, publish, disseminate or circulate, directly or indirectly, or aid,
abet or encourage the making, publishing, disseminating or circulating of
any oral or written statement or any pamphlet, circular, article or
literature which is false, or maliciously critical of or derogatory to an
insurer, or of an organization proposing to become an insurer, and which
is calculated to injure any person engaged or proposing to engage in the
business of insurance.
(Added to NRS by 1971, 1689)
A bank shall not
in any manner extend credit, lease or sell property of any kind, or
furnish any services, or fix or vary the consideration for any of them,
on the condition or requirement that the customer purchase insurance from
a parent, subsidiary or affiliate of the bank. For the purposes of this
section, the terms “affiliate,” “parent” and “subsidiary” have the
meanings ascribed to them in NRS 683A.231 .
(Added to NRS by 1997, 782)
No person shall enter into any agreement to commit, or by
any concerted action commit, any act of boycott, coercion or intimidation
resulting in or tending to result in unreasonable restraint of, or any
monopoly in, any business of insurance.
(Added to NRS by 1971, 1689)
1. An insurer shall not, without the written consent of the agent,
cancel a written agreement with an agent or reduce or restrict the
agent’s authority to transact property or casualty insurance based solely
on the loss ratio experience on insurance transacted by that agent, if
the agent was required to submit the applications for that insurance for
underwriting approval, all material information on those applications was
fully completed and the agent did not omit or alter any information
provided by the applicants for that insurance.
2. As used in this section, “loss ratio experience” means the
amount of money received by the insurer in payment of premiums divided by
the amount of money expended by the insurer in payment of claims for a
specified period.
(Added to NRS by 1989, 963)
1. No person may make or permit any unfair discrimination between
persons of the same class and equal expectation of life in the rates
charged for any contract of life insurance or of life annuity or in the
dividends or other benefits payable thereon, or in any other of the terms
and conditions of such contract.
2. No person may make or permit any unfair discrimination between
persons of the same class and of essentially the same hazard in the
amount of premium, policy fees or rates charged for any policy or
contract of health insurance or in the benefits payable thereunder, or in
any of the terms or conditions of such contract, or in any other manner
whatever.
3. No person may make or permit any unfair discrimination between
persons legally qualified to provide a particular service, in the amount
of the fee or charge for that service payable as a benefit under any
policy or contract of health insurance.
(Added to NRS by 1971, 1690; A 1983, 326)
Except as otherwise expressly
provided by law, no person shall knowingly:
1. Permit to be made or offer to make or make any contract of life
insurance, life annuity or health insurance, or agreement as to such
contract, other than as plainly expressed in the contract issued thereon,
or pay or allow, or give or offer to pay, allow or give, directly or
indirectly, or knowingly accept, as an inducement to such insurance or
annuity, any rebate of premiums payable on the contract, or any special
favor or advantage in the dividends or other benefits thereon, or any
paid employment or contract for services of any kind, or any valuable
consideration or inducement whatever not specified in the contract; or
2. Directly or indirectly give or sell or purchase or offer or
agree to give, sell, purchase, or allow as an inducement to such
insurance or annuity or in connection therewith, whether or not to be
specified in the policy or contract, any agreement of any form or nature
promising returns and profits, or any stocks, bonds or other securities,
or interest present or contingent therein or as measured thereby, of any
insurer or other corporation, association or partnership, or any
dividends or profits accrued or to accrue thereon.
(Added to NRS by 1971, 1690)
1. Nothing in NRS 686A.100 and
686A.110 shall be construed as
including within the definition of discrimination or rebates any of the
following practices:
(a) In the case of any contract of life insurance or life annuity,
paying bonuses to policyholders or otherwise abating their premiums in
whole or in part out of surplus accumulated from nonparticipating
insurance, provided that any such bonuses or abatement of premiums shall
be fair and equitable to policyholders and for the best interests of the
insurer and its policyholders.
(b) In the case of life insurance policies issued on the debit
plan, making allowance to policyholders who have continuously for a
specified period made premium payments directly to an office of the
insurer in an amount which fairly represents the saving in collection
expense.
(c) Readjusting the rate of premium for a group insurance policy
based on the loss or expense experience thereunder, at the end of the
first or any subsequent policy year of insurance thereunder, which may be
made retroactive only for such policy year.
(d) Reducing the premium rate for policies of large amounts, but
not exceeding savings in issuance and administration expenses reasonably
attributable to such policies as compared with policies of similar plan
issued in smaller amounts.
(e) Reducing the premium rates for life or health insurance
policies or annuity contracts on salary savings, payroll deduction,
preauthorized check, bank draft or similar plans in amounts reasonably
commensurate with the savings made by the use of such plans.
(f) Extending credit for the payment of any premium, and for which
credit a reasonable rate of interest is charged and collected.
2. Nothing in NRS 686A.010 to
686A.310 , inclusive, shall be
construed as including within the definition of securities as inducements
to purchase insurance the selling or offering for sale, contemporaneously
with life insurance, of mutual fund shares or face amount certificates of
regulated investment companies under offerings registered with the
Securities and Exchange Commission where such shares or such face amount
certificates or such insurance may be purchased independently of and not
contingent upon purchase of the other, at the same price and upon similar
terms and conditions as where purchased independently.
(Added to NRS by 1971, 1690)
1. No property, casualty, surety or title insurer or underwritten
title company or any employee or representative thereof, and no broker,
agent or solicitor may pay, allow or give, or offer to pay, allow or
give, directly or indirectly, as an inducement to insurance, or after
insurance has been effected, any rebate, discount, abatement, credit or
reduction of the premium named in a policy of insurance, or any special
favor or advantage in the dividends or other benefits to accrue thereon,
or any valuable consideration or inducement whatever, not specified or
provided for in the policy, except to the extent provided for in an
applicable filing with the Commissioner.
2. No title insurer or underwritten title company may:
(a) Pay, directly or indirectly, to the insured or any person
acting as agent, representative, attorney or employee of the owner,
lessee, mortgagee, existing or prospective, of the real property or
interest therein which is the subject matter of title insurance or as to
which a service is to be performed, any commission, rebate or part of its
fee or charges or other consideration as inducement or compensation for
the placing of any order for a title insurance policy or for performance
of any escrow or other service by the insurer or underwritten title
company with respect thereto; or
(b) Issue any policy or perform any service in connection with
which it or any agent or other person has paid or contemplates paying any
commission, rebate or inducement in violation of this section.
3. No insured named in a policy or any employee of that insured
may knowingly receive or accept, directly or indirectly, any such rebate,
discount, abatement, credit or reduction of premium, or any such special
favor or advantage or valuable consideration or inducement.
4. No such insurer may make or permit any unfair discrimination
between insured or property having like insuring or risk characteristics,
in the premium or rates charged for insurance, or in the dividends or
other benefits payable thereon, or in any other of the terms and
conditions of insurance.
5. No casualty insurer may make or permit any unfair
discrimination between persons legally qualified to provide a particular
service, in the amount of the fee or charge for that service payable as a
benefit under any policy or contract of casualty insurance.
6. The provisions of this section do not prohibit:
(a) The payment of commissions or other compensation to licensed
agents, brokers or solicitors.
(b) The extension of credit to an insured for the payment of any
premium and for which credit a reasonable rate of interest is charged and
collected.
(c) Any insurer from allowing or returning to its participating
policyholders, members or subscribers, dividends, savings or unabsorbed
premium deposits.
(d) With respect to title insurance, bulk rates or special rates
for customers of prescribed classes if the bulk or special rates are
provided for in the effective schedule of fees and charges of the title
insurer or underwritten title company.
7. The provisions of this section do not apply to wet marine and
transportation insurance.
(Added to NRS by 1971, 1691; A 1983, 326; 1999, 2799 )
1. Any person violating the provisions of NRS 686A.110 or 686A.130 is guilty of a misdemeanor.
2. No agent or broker violating any of such provisions shall be
entitled to receive any commission for the sale of any policy on which
any rebate or inducement prohibited by NRS 686A.110 or 686A.130 has been given or offered, and the full
amount of any commission so paid may be recovered by the insurer so
paying.
3. The amount of any insurance upon which the insured has
knowingly received or accepted, either directly or indirectly, any
unlawful rebate of the premium or agent’s, solicitor’s or broker’s
commission shall be reduced in such proportion as the amount or value of
such rebate, commission or other consideration so received by the insured
bears to the total premium on such policy.
4. A title insurer or underwritten title company shall be liable
to the State of Nevada for five times the amount of any unlawful
commission or rebate paid in violation of NRS 686A.130 , which amount may be recovered by the
Commissioner in addition to any other penalty imposed by law.
(Added to NRS by 1971, 1692)
Except as
provided in subsection 2 of NRS 686A.120 (contemporaneous sales of life insurance and
mutual fund shares), no person shall sell, agree or offer to sell, or
give or offer to give, directly or indirectly in any manner whatsoever,
as an inducement to insurance or in connection therewith, any stock,
shares, bonds or other securities of any kind, or any advisory board
contract or other contract or agreement of any kind offering or promising
returns and profits.
(Added to NRS by 1971, 1693)
If the
Commissioner has cause to believe that any person has been engaged or is
engaging, in this state, in any unfair method of competition or any
unfair or deceptive act or practice prohibited by NRS 686A.010 to 686A.310 , inclusive, and that a proceeding by him in
respect thereto would be in the interest of the public, he may issue and
serve upon such person a statement of the charges and a notice of the
hearing to be held thereon. The statement of charges and notice of
hearing shall comply with the requirements of NRS 679B.320 and shall be served upon such person
directly or by certified or registered mail, return receipt requested.
(Added to NRS by 1971, 1693; A 1975, 1288; 1977, 432)
1. If the Commissioner believes that any person engaged in the
insurance business is in the conduct of such business engaging in this
state in any method of competition or in any act or practice not defined
in NRS 686A.010 to 686A.310 , inclusive, which is unfair or deceptive and
that a proceeding by him in respect thereto would be in the public
interest, the Commissioner shall, after a hearing of which notice and of
the charges against such person are given him, make a written report of
his findings of fact relative to such charges and serve a copy thereof
upon such person and any intervener at the hearing.
2. If such report charges a violation of NRS 686A.010 to 686A.310 , inclusive, and if such method of
competition, act or practice has not been discontinued, the Commissioner
may, through the Attorney General, at any time after 20 days after the
service of such report cause an action to be instituted in the district
court of the county wherein the person resides or has his principal place
of business to enjoin and restrain such person from engaging in such
method, act or practice. The court shall have jurisdiction of the
proceeding and shall have power to make and enter appropriate orders in
connection therewith and to issue such writs or orders as are ancillary
to its jurisdiction or necessary in its judgment to prevent injury to the
public pendente lite; but the State of Nevada shall not be required to
give security before the issuance of any such order or injunction under
this section. If a stenographic record of the proceedings in the hearing
before the Commissioner was made, a certified transcript thereof
including all evidence taken and the report and findings shall be
received in evidence in such action.
3. If the court finds that:
(a) The method of competition complained of is unfair or deceptive;
(b) The proceedings by the Commissioner with respect thereto are to
the interest of the public; and
(c) The findings of the Commissioner are supported by the weight of
the evidence,
Ê it shall issue its order enjoining and restraining the continuance of
such method of competition, act or practice.
4. Either party may appeal from such final judgment or order or
decree of court in a like manner as provided for appeals in civil cases.
5. If the Commissioner’s report made under subsection 1 or order
on hearing made under NRS 679B.360
does not charge a violation of NRS 686A.010 to 686A.310 , inclusive, then any intervener in the
proceedings may appeal therefrom within the time and in the manner
provided in this Code for appeals from the Commissioner generally.
6. Upon violation of any injunction issued under this section, the
Commissioner, after a hearing thereon, may impose the appropriate
penalties provided for in NRS 686A.187 .
(Added to NRS by 1971, 1693; A 1975, 1288)
1. Service of all process, statements of charges and notices under
NRS 686A.010 to 686A.310 , inclusive, upon unauthorized insurers shall
be made by delivering to and leaving with the Commissioner or some person
in apparent charge of his office two copies thereof, or in the manner
provided for by subsection 2 of NRS 685B.050 (service of process).
2. The Commissioner shall forward all such process, statements of
charges and notices to the insurer in the manner provided in subsection 3
of NRS 685B.050 .
3. No default shall be taken against any such unauthorized insurer
until expiration of 30 days after the date of forwarding by the
Commissioner under subsection 2, or date of service of process if under
subsection 2 of NRS 685B.050 .
4. NRS 685B.050 applies to all
process, statements of charges and notices under this section.
(Added to NRS by 1971, 1694)
1. After the hearing provided for in NRS 686A.160 , the Commissioner shall issue his order on
hearing pursuant to NRS 679B.360 . If
the Commissioner determines that the person charged has engaged in an
unfair method of competition or an unfair or deceptive act or practice in
violation of NRS 686A.010 to 686A.310
, inclusive, he shall order him to
cease and desist from engaging in that method of competition, act or
practice, and may order one or both of the following:
(a) If the person knew or reasonably should have known that he was
in violation of NRS 686A.010 to
686A.310 , inclusive, payment of an
administrative fine of not more than $5,000 for each act or violation,
except that as to licensed agents, brokers, solicitors and adjusters, the
administrative fine must not exceed $500 for each act or violation.
(b) Suspension or revocation of the person’s license if he knew or
reasonably should have known that he was in violation of NRS 686A.010
to 686A.310 , inclusive.
2. Until the expiration of the time allowed for taking an appeal,
pursuant to NRS 679B.370 , if no
petition for review has been filed within that time, or, if a petition
for review has been filed within that time, until the official record in
the proceeding has been filed with the court, the Commissioner may, at
any time, upon such notice and in such manner as he deems proper, modify
or set aside, in whole or in part, any order issued by him under this
section.
3. After the expiration of the time allowed for taking an appeal,
if no petition for review has been filed, the Commissioner may at any
time, after notice and opportunity for hearing, reopen and alter, modify
or set aside, in whole or in part, any order issued by him under this
section whenever in his opinion conditions of fact or of law have so
changed as to require such action or if the public interest so requires.
(Added to NRS by 1975, 1284; A 1977, 432; 1993, 2394; 1997, 783)
1. An order issued by the Commissioner under NRS 686A.183 is subject to review pursuant to the
provisions of NRS 679B.370 .
2. An order issued by the Commissioner under NRS 686A.183 or 686A.187 shall become final:
(a) Upon the expiration of the time allowed for taking an appeal,
if no petition for review has been duly filed within such time, except
that the Commissioner may thereafter modify or set aside his order to the
extent provided in subsection 3 of NRS 686A.183 ; or
(b) Upon the final decision of the court if the court directs that
the order of the Commissioner be affirmed or the petition for review
dismissed.
(Added to NRS by 1975, 1285)
Any
person who violates a cease and desist order of the Commissioner issued
under NRS 686A.183 , except one issued
with respect to NRS 686A.170 , is
subject, in the discretion of the Commissioner, after notice and hearing
and upon order of the Commissioner, to one or both of the following:
1. Payment of an administrative fine of not more than $5,000 for
each and every violation.
2. Suspension or revocation of the license.
(Added to NRS by 1975, 1285)
1. Any insurer may retain, invest in or acquire the whole or any
part of the capital stock of any other insurer or insurers, or have a
common management with any other insurer or insurers, unless such
retention, investment, acquisition or common management is inconsistent
with any other provision of this Code, or unless by reason thereof the
business of such insurers with the public is conducted in a manner which
substantially lessens competition generally in the insurance business or
tends to create any monopoly therein.
2. Any person otherwise qualified may be a director of two or more
insurers which are competitors, unless the effect thereof is to lessen
substantially competition between insurers generally or tends materially
to create any monopoly.
(Added to NRS by 1971, 1694)
1. Except as otherwise provided in NRS 616B.710 , no person shall require, directly or
indirectly, or through any trustee, director, officer, agent or employee
or affiliate, as a condition, agreement or understanding to selling or
furnishing any other person any loan, or extension thereof, credit, sale,
goods, property, contract, lease or service, that such other person shall
place, continue (other than as to life insurance) or renew any policy of
insurance of any kind through any particular agent, broker or insurer. No
agent, broker or insurer shall knowingly participate in any such
prohibited plan or transaction. No person shall fix a price charged for
such thing or service, or discount from or rebate upon price, on the
condition, agreement or understanding that any insurance is to be
obtained through a particular agent, broker or insurer.
2. Subsection 1 does not prevent:
(a) The exercise by any such person upon a reasonable basis of any
right to approve or disapprove of the insurer and representative to
underwrite the insurance. Such basis shall relate only to the adequacy
and terms of the coverage with respect to the interest of the vendor,
lender, lessor or provider of service to be insured thereunder, the
financial standards to be met by the insurer, and the ability of the
insurer or representative to service the policy.
(b) The exercise by the vendor, lender, lessor or provider of
service of the right to furnish or renew the insurance, and to charge the
account of the other person with the costs thereof, if such other person
fails to deliver such insurance to the lender, vendor, lessor or provider
of service, where otherwise called for and in order, at least 15 days
prior to expiration of the existing policy.
(Added to NRS by 1971, 1695; A 1999, 3147 )
No
mortgagee, lessor, vendor or other person whose interest is insured under
an insurance policy paid for by another shall make, receive or accept any
monetary charge or fee paid or payable by such other person, for
handling, servicing or processing the insurance policy, or endorsements
thereon or cancellation thereof.
(Added to NRS by 1971, 1696)
1. Except as otherwise provided in NRS 616B.710 , no officer or employee of this state, or of
any public agency, public authority or public corporation (except a
public corporation or public authority created pursuant to agreement or
compact with another state), and no person acting or purporting to act on
behalf of such officer or employee, or public agency or public authority
or public corporation, shall, with respect to any public building or
construction contract which is about to be or which has been
competitively bid, require the bidder to make application or furnish
financial data to, or to obtain or procure any of the surety bonds or
contracts of insurance specified in connection with such contracts or by
any law from, a particular insurer or agent or broker.
2. Except as otherwise provided in NRS 616B.710 , no such officer or employee or any person
acting or purporting to act on behalf of such officer or employee shall
negotiate, make application for, obtain or procure any of such surety
bonds or contracts of insurance (except contracts of insurance for
builder’s risk or owner’s protective liability) which can be obtained or
procured by the bidder, contractor or subcontractor.
3. This section does not, however, prevent the exercise by such
officer or employee on behalf of the State or such public agency, public
authority or public corporation of its right to approve the form,
sufficiency or manner of execution of the surety bonds or contracts of
insurance furnished by the insurer selected by the bidder to underwrite
such bonds or contracts of insurance.
4. Any provisions in any invitation for bids or in any of the
contract documents in conflict with this section are declared to be
contrary to the public policy of this state.
5. A violation of this section is subject to the penalties
provided by NRS 679A.180 (general
penalty).
(Added to NRS by 1971, 1942; A 1999, 3148 )
1. Except as otherwise provided in NRS 684A.060 , any insurer who:
(a) Transacts property, casualty or surety insurance in this State;
and
(b) Retains an adjuster to investigate and settle any claim arising
under an insurance contract,
Ê shall retain an adjuster who resides in this State.
2. As used in this section, “adjuster” has the meaning ascribed to
it in NRS 684A.020 .
(Added to NRS by 1989, 1110; A 1993, 2394; 1995, 1621)
1. A person shall not willfully collect any sum as a premium or
charge for insurance which is not then provided or is not in due course
to be provided, subject to acceptance of the risk by the insurer, by an
insurance policy issued by an insurer as authorized by this Code.
2. Except as otherwise provided in subsection 3, a person shall
not willfully collect as a premium or charge for insurance any sum in
excess of the premium or charge applicable to the insurance and as
specified in the policy, in accordance with the applicable
classifications and rates as filed with and approved by the Commissioner.
In cases where classifications, premiums or rates are not required by
this Code to be so filed and approved, the premiums and charges must not
be in excess of those specified in the policy and as fixed by the
insurer. This subsection does not prohibit:
(a) The charging and collection by surplus lines brokers licensed
under chapter 685A of NRS of the amount
permitted by chapter 685A of NRS and
regulations adopted by the Commissioner.
(b) The charging and collection by a life insurer of amounts
actually to be expended for the medical examination of any applicant for
life insurance or for reinstatement of a life insurance policy.
3. The Commissioner may adopt regulations to allow the charging
and collection of a fee by an insurance broker, consultant or financial
planner:
(a) In lieu of any other charge or commission for solicitation,
negotiation or procurement of a policy of insurance which covers
commercial or business risks;
(b) For consultation or any related advice on the insuring of
commercial or business risks which does not result in the procurement of
a policy of insurance; and
(c) For consultation or related advice on the purchase of life or
health insurance or an annuity, whether or not it results in the purchase
of a policy of insurance or annuity. In such a case, the fee must be set
forth in a written contract signed by the client before the consultation
begins.
4. An agent or broker who provides consultation or related advice
pursuant to this section shall do so pursuant to a written contract
specifying the compensation he will receive. The compensation may be in
addition to or in lieu of a commission and is not a premium as defined in
NRS 679A.115 .
(Added to NRS by 1971, 1696; A 1981, 1142; 1985, 1549; 1987, 1038;
1995, 1621)
1. No form or plan of insurance covering any group or combination
of persons or risks shall be written or delivered within or outside this
state to cover persons or risks in this state at any preferred rate or on
any form other than as offered to persons not in such group or
combination and to the public generally, unless such form, plan of
insurance, and the rates or premiums to be charged therefor have been
submitted to and approved by the Commissioner.
2. Any such plan of insurance described in subsection 1 shall not
be approved by the Commissioner unless it is made available to all
individuals of the group who seek to be insured. No insurer or agent
shall deny coverage to any individual of such group who seeks the type of
insurance which is being made available to other members of the group.
3. This section does not apply to life insurance, health
insurance, annuity contracts or wet marine and transportation insurance.
(Added to NRS by 1971, 1942)
1. No person shall arrange, provide or participate in any plan to
offer or effect any kind or kinds of insurance or annuities in this state
as an inducement to the purchase or rental by the public of any property
or services, without a separate charge to the insured for such insurance.
2. This section does not apply to:
(a) Insurance written in connection with a subscription to
newspapers of general circulation;
(b) Insurance issued to credit unions or members thereof in
connection with the purchase of shares in such credit union;
(c) Insurance offered as guarantee to the performance of goods and
designed to protect the purchasers or users of such goods;
(d) Title insurance;
(e) Life or health insurance written in connection with an
indebtedness for the purpose of paying the balance of the indebtedness on
death or disability of the individual insured; or
(f) Services provided by motor clubs.
(Added to NRS by 1971, 1696)
The Commissioner may revoke or suspend the license
of any person domiciled or resident in Nevada and licensed to transact
insurance in Nevada as insurer, agent, broker or otherwise, upon a
hearing and proof that such person, as the result of a hearing before the
commissioner, director or superintendent of insurance or insurance
department of another state, or in a judicial proceeding in another
state, has been found to have violated the insurance laws of that state
relating to unfair methods of competition or unfair or deceptive acts or
practices in the conduct of the business of insurance, and as a result
thereof either has had his license revoked or suspended in that state or
has been found guilty of failing to comply with any order, decree or
judgment issued pursuant to such hearing or judicial proceeding in that
state.
(Added to NRS by 1971, 1697)
No insurer
shall be held guilty of having committed any of the acts prohibited by
NRS 686A.010 to 686A.310 , inclusive, by reason of the act of any
agent, solicitor or employee not an officer, director or department head
thereof, unless an officer, director or department head of the insurer
has knowingly permitted such act or has had prior knowledge thereof.
(Added to NRS by 1971, 1697)
No person who is not an insurer shall assume or use any name
which deceptively implies or suggests that it is an insurer.
(Added to NRS by 1971, 1697)
INSURANCE FRAUD
As used in NRS 686A.281 to 686A.295 , inclusive, unless the context otherwise
requires, the words and terms defined in NRS 686A.2815 , 686A.282 and 686A.2825 have the meanings ascribed to them in those
sections.
(Added to NRS by 1983, 1387; A 1997, 1541; 2001, 1096 )
“Insurance fraud” means
knowingly and willfully:
1. Presenting or causing to be presented any statement to an
insurer, a reinsurer, a producer, a broker or any agent thereof, if the
person who presents or causes the presentation of the statement knows
that the statement conceals or omits facts, or contains false or
misleading information concerning any fact material to an application for
the issuance of a policy of insurance pursuant to this title.
2. Presenting or causing to be presented any statement as a part
of, or in support of, a claim for payment or other benefits under a
policy of insurance issued pursuant to this title, if the person who
presents or causes the presentation of the statement knows that the
statement conceals or omits facts, or contains false or misleading
information concerning any fact material to that claim.
3. Assisting, abetting, soliciting or conspiring with another
person to present or cause to be presented any statement to an insurer, a
reinsurer, a producer, a broker or any agent thereof, if the person who
assists, abets, solicits or conspires knows that the statement conceals
or omits facts, or contains false or misleading information concerning
any fact material to an application for the issuance of a policy of
insurance pursuant to this title or a claim for payment or other benefits
under such a policy.
4. Acting or failing to act with the intent of defrauding or
deceiving an insurer, a reinsurer, a producer, a broker or any agent
thereof, to obtain a policy of insurance pursuant to this title or any
proceeds or other benefits under such a policy.
5. As a practitioner, an insurer or any agent thereof, acting to
assist, conspire with or urge another person to commit any act or
omission specified in this section through deceit, misrepresentation or
other fraudulent means.
6. Accepting any proceeds or other benefits under a policy of
insurance issued pursuant to this title, if the person who accepts the
proceeds or other benefits knows that the proceeds or other benefits are
derived from any act or omission specified in this section.
7. Employing a person to procure clients, patients or other
persons who obtain services or benefits under a policy of insurance
issued pursuant to this title for the purpose of engaging in any act or
omission specified in this section, except that such insurance fraud does
not include contact or communication by an insurer or his agent or
representative with a client, patient or other person if the contact or
communication is made for a lawful purpose, including, without
limitation, communication by an insurer with a holder of a policy of
insurance issued by the insurer or with a claimant concerning the
settlement of any claims against the policy.
8. Participating in, aiding, abetting, conspiring to commit,
soliciting another person to commit, or permitting an employee or agent
to commit any act or omission specified in this section.
(Added to NRS by 2001, 1095 )
“Investigative or law enforcement agency” includes:
1. The State Fire Marshal;
2. The chief or other officer of the fire department in whose
jurisdiction a fire has occurred;
3. The district attorney of the county where any fraudulent
activity has occurred or where a fraudulent claim has been made; and
4. Any other officer of an agency in this state who has the
authority to investigate the fraudulent activity or claim.
(Added to NRS by 2001, 1096 )
“Practitioner” means:
1. A physician, dentist, nurse, dispensing optician, optometrist,
physical therapist, podiatric physician, psychologist, chiropractor,
doctor of Oriental medicine in any form, director or technician of a
medical laboratory, pharmacist or other provider of health services who
is authorized to engage in his occupation by the laws of this state or
another state; and
2. An attorney admitted to practice law in this state or any other
state.
(Added to NRS by 2001, 1096 )
1. Any person, governmental entity, insurer or authorized
representative of an insurer shall report any information concerning
insurance fraud to the Commissioner and Attorney General on a form
prescribed by the Commissioner and Attorney General.
2. The Commissioner and Attorney General shall each independently:
(a) Review each report of insurance fraud; and
(b) Determine whether an investigation should be made of the facts
in the report.
3. During their respective investigations, the Commissioner and
Attorney General shall independently determine whether there is probable
cause to believe that insurance fraud has occurred.
4. A district attorney of any county where fraudulent activity has
occurred or is occurring or where a fraudulent claim that would
constitute insurance fraud has been made may, with the permission of the
Attorney General or at the request of the Attorney General, institute
proceedings in the name of the State of Nevada.
(Added to NRS by 1983, 1387; A 2001, 1097 )
1. If an insurer has a reasonable suspicion that a loss to an
insured may have been caused by other than an accidental or a natural
occurrence, the insurer shall notify the Commissioner and Attorney
General in writing of the insurer’s reasons for the suspicion.
2. Any insurer making such a report shall provide the Commissioner
and Attorney General with any information the insurer obtained during its
investigation of the claim.
3. If the loss referred to in subsection 1 is believed to be
caused by fire, the insurer shall also so notify an investigative or law
enforcement agency.
(Added to NRS by 1983, 1387; A 2001, 1097 )
1. Every insurer shall provide information concerning insurance
fraud to the Attorney General, the Commissioner, any investigative or law
enforcement agency or any agency of the Federal Government, if the
insurer receives a request in writing for that information.
2. The information requested from an insurer may include:
(a) Information about the policy of insurance on the property which
was demolished or destroyed, including information from the application
for insurance;
(b) Information on previous claims made by the insured;
(c) Records of the premiums paid for the policy of insurance; and
(d) Information concerning the insurer’s investigation of the
claim, including statements of any person, information submitted as proof
of the loss or any other relevant information on the claim.
(Added to NRS by 1983, 1387; A 2001, 1097 )
1. Any insurer giving information to the Attorney General, the
Commissioner or any investigative or law enforcement agency concerning an
act or omission alleged to be insurance fraud is entitled to receive,
upon completion of the investigation or prosecution of the insurance
fraud, whichever occurs later, any relevant information concerning the
fraudulent activity.
2. The Attorney General, the Commissioner or any investigative or
law enforcement agency receiving information from another person, agency
or insurer shall:
(a) Keep the information confidential and not release the
information except pursuant to subsection 1;
(b) Provide information concerning its investigation of the
insurance fraud to the insurer reporting the fraudulent activity upon the
completion of its investigation or a criminal prosecution, whichever
occurs later; and
(c) Provide any documents necessary or allow its employees or
agents to testify in any action by or against the insurer if the insurer
or its insured furnished the information for the investigation or a
criminal prosecution.
(Added to NRS by 1983, 1388; A 2001, 1097 )
1. An agent, broker, solicitor, examining physician, applicant or
other person shall not knowingly or willfully make any false or
fraudulent statement or representation in or with reference to any
application for insurance.
2. A person who violates this section is guilty of a category D
felony and shall be punished as provided in NRS 193.130 . In addition to any other penalty, the court
shall order the person to pay restitution.
(Added to NRS by 1971, 1697; A 1977, 153; 1983, 1388; 1995, 1318)
A person who
commits insurance fraud is guilty of a category D felony and shall be
punished as provided in NRS 193.130 .
(Added to NRS by 1983, 1388; A 1991, 1042; 1995, 1318, 2698; 1997,
1541; 2001, 1098 )
1. A court may, in addition to imposing the penalties set forth in
NRS 193.130 , order a person who is
convicted of, or who pleads guilty or nolo contendere to, insurance fraud
to pay:
(a) Court costs; and
(b) The cost of the investigation and prosecution of the insurance
fraud for which the person was convicted or to which the person pleaded
guilty or nolo contendere.
2. Any money received by the Attorney General pursuant to
paragraph (b) of subsection 1 must be accounted for separately and used
to pay the expenses of the Fraud Control Unit for Insurance established
pursuant to NRS 228.412 , and is hereby
authorized for expenditure for that purpose. The money in the account
does not revert to the State General Fund at the end of any fiscal year
and must be carried forward to the next fiscal year.
3. An insurer or other organization, or any other person, subject
to the jurisdiction of the Commissioner pursuant to this title shall be
deemed to be a victim for the purposes of restitution in a case that
involves insurance fraud or that is related to a claim of insurance fraud.
(Added to NRS by 2001, 1096 )
If a person who is licensed or registered under the laws
of the State of Nevada to engage in a business or profession is convicted
of or pleads guilty to engaging in an act of insurance fraud, the
Commissioner and the Attorney General shall forward to each agency by
which the convicted person is licensed or registered a copy of the
conviction or plea and all supporting evidence of the act of insurance
fraud. An agency that receives information from the Commissioner and
Attorney General pursuant to this section shall, not later than 1 year
after the date on which it receives the information, submit a report
which sets forth the action taken by the agency against the convicted
person, including, but not limited to, the revocation or suspension of
the license or any other disciplinary action, to the Director of the
Legislative Counsel Bureau for transmittal to the Legislature.
(Added to NRS by 1997; 1540; A 2001, 1099 )
CLAIMS
1. An insurer who issues insurance covering damage to a motor
vehicle shall not delay making payment for any claim involving damage to
a motor vehicle after receiving a statement of charges, pursuant to the
provisions of NRS 487.035 , from any
garage or licensed body shop previously authorized by the insured to
perform the repairs required by that claim.
2. A delay, within the meaning of this section, is failure to
issue a check or draft, payable to the garage or licensed body shop or
jointly to the insured and the garage or licensed body shop, within 30
days after the insurer’s receipt of the statement of charges for repairs
which have been satisfactorily completed.
3. If the damaged vehicle is subject to a security interest or the
legal owner of the damaged vehicle is different from the registered
owner, the vehicle must be repaired by a garage or licensed body shop
unless:
(a) The insurer has declared the vehicle a total loss; or
(b) The total charge for the repair of the vehicle, as set forth in
the statement of charges presented pursuant to NRS 487.035 , is $300 or less.
4. Except as otherwise provided in subsection 3, nothing in this
section shall be deemed to prohibit an insurer and insured from settling
a claim involving damage to a motor vehicle without providing for the
repair of the vehicle.
5. As used in this section, “licensed body shop” means a body shop
for which a license has been issued pursuant to chapter 487 of NRS.
(Added to NRS by 1973, 977; A 1987, 1098; 1993, 338)
1. Engaging in any of the following activities is considered to be
an unfair practice:
(a) Misrepresenting to insureds or claimants pertinent facts or
insurance policy provisions relating to any coverage at issue.
(b) Failing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance policies.
(c) Failing to adopt and implement reasonable standards for the
prompt investigation and processing of claims arising under insurance
policies.
(d) Failing to affirm or deny coverage of claims within a
reasonable time after proof of loss requirements have been completed and
submitted by the insured.
(e) Failing to effectuate prompt, fair and equitable settlements of
claims in which liability of the insurer has become reasonably clear.
(f) Compelling insureds to institute litigation to recover amounts
due under an insurance policy by offering substantially less than the
amounts ultimately recovered in actions brought by such insureds, when
the insureds have made claims for amounts reasonably similar to the
amounts ultimately recovered.
(g) Attempting to settle a claim by an insured for less than the
amount to which a reasonable person would have believed he was entitled
by reference to written or printed advertising material accompanying or
made part of an application.
(h) Attempting to settle claims on the basis of an application
which was altered without notice to, or knowledge or consent of, the
insured, his representative, agent or broker.
(i) Failing, upon payment of a claim, to inform insureds or
beneficiaries of the coverage under which payment is made.
(j) Making known to insureds or claimants a practice of the insurer
of appealing from arbitration awards in favor of insureds or claimants
for the purpose of compelling them to accept settlements or compromises
less than the amount awarded in arbitration.
(k) Delaying the investigation or payment of claims by requiring an
insured or a claimant, or the physician of either, to submit a
preliminary claim report, and then requiring the subsequent submission of
formal proof of loss forms, both of which submissions contain
substantially the same information.
(l) Failing to settle claims promptly, where liability has become
reasonably clear, under one portion of the insurance policy coverage in
order to influence settlements under other portions of the insurance
policy coverage.
(m) Failing to comply with the provisions of NRS 687B.310 to 687B.390 , inclusive, or 687B.410 .
(n) Failing to provide promptly to an insured a reasonable
explanation of the basis in the insurance policy, with respect to the
facts of the insured’s claim and the applicable law, for the denial of
his claim or for an offer to settle or compromise his claim.
(o) Advising an insured or claimant not to seek legal counsel.
(p) Misleading an insured or claimant concerning any applicable
statute of limitations.
2. In addition to any rights or remedies available to the
Commissioner, an insurer is liable to its insured for any damages
sustained by the insured as a result of the commission of any act set
forth in subsection 1 as an unfair practice.
(Added to NRS by 1975, 1285; A 1987, 1067; 1991, 2202)
1. If a hospital submits to an insurer the form commonly referred
to as the “UB-82,” the form must contain or be accompanied by a statement
in substantially the following form:
Any person who misrepresents or falsifies essential information
requested on this form may, upon conviction, be subject to a fine and
imprisonment under state or federal law, or both.
2. If a person who is licensed to practice one of the health
professions regulated by title 54 of NRS submits to an insurer the form
commonly referred to as the “HCFA-1500” for a patient who is not covered
by any governmental program which offers insurance coverage for health
care, the form must be accompanied by a statement in substantially the
following form:
Any person who knowingly files a statement of claim containing any
misrepresentation or any false, incomplete or misleading information may
be guilty of a criminal act punishable under state or federal law, or
both, and may be subject to civil penalties.
3. The failure to provide any of the statements required by this
section is not a defense in a prosecution for insurance fraud pursuant to
NRS 686A.291 .
(Added to NRS by 1991, 1042; A 1991, 1978; 2001, 1099 )
1. In any third-party liability claim, an insurer shall not issue
a check or draft or otherwise make payment of $5,000 or more in
settlement of the claim to a representative of the claimant, including,
without limitation, the lawyer for the claimant, unless the insurer, at
the time of making the payment or as soon as practicable thereafter,
mails written notice of the payment to the claimant at his last known
address.
2. The failure of an insurer to serve notice as required by
subsection 1 or defective service of the notice does not:
(a) Create, and must not be construed to create, a cause of action
for any natural person or entity other than the Commissioner.
(b) Establish, and must not be construed to establish, a defense
for any party to any cause of action.
3. As used in this section, “third-party liability claim” means a
claim brought under a liability insurance policy by a person other than
the insured, where the claimant is a natural person.
(Added to NRS by 2005, 1001 )
FINANCING OF PREMIUMS
As used in NRS 686A.330 to 686A.520 , inclusive, unless the context otherwise
requires:
1. “Agreement” means a contract between a person and an insured or
prospective insured under which the person agrees to pay a premium in
advance on behalf of the insured or prospective insured in exchange for
repayment of the amount advanced with interest or for some other
consideration.
2. “Company” means a person engaged in the business of entering
into agreements or purchasing agreements. The term does not include a
person who finances a premium in connection with the sale of a motor
vehicle upon which he holds a lien.
(Added to NRS by 1985, 1153; A 1993, 2394; 1995, 1622)
1. A company is subject to the provisions of chapter 696B of NRS.
2. For the purposes of chapter 696B
of NRS, a company shall be deemed to be an insurer.
(Added to NRS by 1995, 1621)
Except as provided in NRS 686A.350 , a person shall not engage in the business
of a company or hold himself out as a company without first having
received a license from the Commissioner to engage in the business of a
company.
(Added to NRS by 1985, 1154)
1. A license to engage in the business of a company is not
required of any:
(a) State or federally chartered building association or savings
and loan association.
(b) State or federally chartered bank.
(c) State or federally chartered credit union.
(d) Thrift company licensed pursuant to chapter 677 of NRS.
(e) Insurance agent financing his own accounts.
(f) Insurer authorized to do business in this state financing its
own policies or those of an affiliated company.
(g) Business, in addition to those included in paragraphs (a) to
(d), inclusive, which is licensed and regulated by the Division of
Financial Institutions of the Department of Business and Industry.
2. The provisions of NRS 686A.330 to 686A.520 , inclusive, other than those which concern
licensing, apply to persons exempt from licensing pursuant to subsection
1.
(Added to NRS by 1985, 1154; A 1993, 1917)
1. An application for a license to engage in the business of a
company must be filed with the Commissioner on a form prescribed by him
and must include:
(a) A nonrefundable fee for application and for investigation of
the applicant of $500;
(b) A surety bond payable to the State of Nevada in the amount of
$50,000, executed by a surety company which is authorized to do business
in Nevada;
(c) A current certified financial statement or another financial
statement if individually approved by the Commissioner;
(d) An appointment of the Commissioner and his successors in office
as the applicant’s attorney to receive service of process; and
(e) If the applicant is a corporation, a copy of its articles of
incorporation.
2. The applicant shall provide the Commissioner with any material
change concerning information contained in the application within 10 days
after the change occurs.
(Added to NRS by 1985, 1154; A 1991, 1629; 1993, 2395)
1. An unincorporated licensee or unincorporated applicant for a
license who desires the issuance of a license under a fictitious name
must file with the Commissioner a certified copy of the entry in the
county clerk’s register and of the certificate or any renewal certificate
filed pursuant to chapter 602 of NRS. An
incorporated licensee and incorporated applicant must file with the
Commissioner in writing the corporation’s true name and the fictitious
names under which it conducts or intends to conduct business in this
state. After licensing, each licensee shall file promptly with the
Commissioner written notice of any change in or discontinuance of any
fictitious name.
2. The Commissioner may in writing disapprove the use of any true
name, other than the bona fide natural name of a natural person, or any
fictitious name used or proposed to be used by any applicant or licensee,
on any of the following grounds:
(a) The name interferes with or is deceptively similar to a name
already filed and in use by another licensee;
(b) Use of the name may mislead the public in any respect; or
(c) The name states or implies that the licensee or applicant is an
insurer or is entitled to engage in insurance activities not authorized
under the licenses which he holds or for which he has applied.
(Added to NRS by 1985, 1154; A 2001, 814 )
1. A company must renew its license on or before March 1 of each
year. An application for renewal must be submitted on a form prescribed
by the Commissioner and must be accompanied by:
(a) A financial statement for the preceding year; and
(b) A fee of $500 and any penalty imposed pursuant to subsection 2.
2. The Commissioner may grant an extension allowing a company to
file an application for renewal after March 1 if the company shows that
for reasons beyond its control it cannot apply before that date. If a
company which has not been granted an extension files its application for
renewal after March 1, the company shall pay a penalty of $25 for each
day the application is late.
(Added to NRS by 1985, 1155; A 1987, 463; 1991, 1629)
1. A company shall, immediately after it has been issued a
license, file with the Commissioner a schedule of rates and charges it
intends to use in this state. The schedule must include, and separately
identify, any commission which is required to be paid to an agent or
broker who completes an agreement. Any change in the schedule must be
filed with the Commissioner at least 60 days before the rates become
effective.
2. A company may not impose a charge included in an agreement
unless the charge is included in the schedule filed with the Commissioner.
3. The Commissioner shall not approve any charge listed in the
schedule which is unfairly discriminatory in relation to similar risks.
(Added to NRS by 1993, 2393)
1. Before using a form for an agreement or notice required by this
chapter, a company must submit the proposed form to the Commissioner for
approval. If the Commissioner does not disapprove a form within 60 days
after it is submitted, the form shall be deemed approved.
2. The Commissioner shall not approve any form unless it complies
with the provisions of NRS 686A.330
to 686A.520 , inclusive.
3. An insurer, including any subsidiary of an insurer or
corporation under substantially the same management or control as an
insurer, shall file all forms for agreements and any related forms. The
filing required in this subsection is in addition to the filings required
pursuant to chapter 686B of NRS.
(Added to NRS by 1985, 1155; A 1993, 2395)
1. A company shall maintain records of each transaction for 3
years after making the final entry with respect to the transaction. The
records may be preserved in photographic form, on microfilm or microfiche
or in a form approved by the Commissioner.
2. The records must be open to the Commissioner at all times. The
Commissioner may require a company to furnish to him in any form he
requires any information maintained in the company’s records.
(Added to NRS by 1985, 1155)
The
Commissioner may conduct an examination of a company at any time in
accordance with NRS 679B.250 to
679B.287 , inclusive. The expense of
the examination must be borne by the company in accordance with NRS
679B.290 as if the company were an
insurer.
(Added to NRS by 1985, 1155; A 1995, 1773)
1. An agreement executed in this state must be dated and signed by
the insured. The printed portion of the agreement must be in not less
than 8-point type. The agreement must include:
(a) The name and the address and telephone number of the business
of the insurance agent for the insurance contract to which the agreement
relates;
(b) The name and the address of the business or residence of the
insured;
(c) The name, address and telephone number of the company to which
payments must be made;
(d) A brief description of any insurance policy involved; and
(e) Such other information as may be required by the Commissioner.
2. An agreement must have at its top in type which is more
prominent than the text of the agreement, the words “Agreement For
Financing Premium” or words of similar meaning. An agreement must contain
a notice in type which is more prominent than the text of the agreement
which reads as follows:
Notice:
1. Do not sign this agreement before you have read it or if it
contains any blank spaces.
2. You are entitled to a copy of this agreement which is complete.
(Added to NRS by 1985, 1155)
The agent, broker or other person preparing an agreement shall furnish a
completed copy of the agreement to the insured immediately after the
insured signs the agreement.
(Added to NRS by 1985, 1156)
1. A company shall not charge or collect a charge for interest
which is not permitted by this section.
2. Interest must be computed on the balance due, after subtracting
the down payment, from the effective date of the insurance contract or
agreement, whichever is earlier, through the date on which the final
installment is payable.
3. The rate of interest must be specified in the agreement. The
agreement may provide for a service charge of not more than $25, and that
the charge is not refundable.
4. An insured may prepay in full at any time the unpaid balance of
the principal. The insured is entitled to a refund of the unearned
portion of the prepaid interest. The refund must be at least as great a
proportion of the prepaid interest as the sum of the periodic balances
for each period beginning one period after the prepayment is made bears
to the sum of all the periodic balances under the schedule of payments in
the agreement. If the amount of the refund is less than $1, no refund
need be made.
5. Any provision which purports to limit the insured’s right of
prepayment pursuant to this section is void.
(Added to NRS by 1985, 1156)
1. A company shall not impose or collect a fee or charge which is
not authorized by this section.
2. An agreement may provide for a charge for any late payment of
an installment of not less than $1 and not more than 5 percent of the
installment.
3. A company may collect a fee of not more than $15 for each check
returned to the company because the insured had insufficient money or
credit with the drawee to pay the check or because the insured stopped
payment on the check.
4. An agreement may provide for payment of collection costs or
attorney’s fees, equal to 20 percent of the outstanding indebtedness if
the agreement is referred for collection to a collection agency or
attorney who is not an employee of the company.
(Added to NRS by 1985, 1156; A 1993, 2395)
1. When an agreement contains a power of attorney enabling the
company, in the name of the insured, to cancel any insurance policy
listed in the agreement, the insurance policy must not be cancelled by
the company unless it is cancelled in accordance with this section.
2. A company shall mail written notice of its intent to cancel an
insurance policy because of a default in payment under an agreement to
the insured at his last known address as indicated in the records of the
company and to the agent who submitted the agreement at least 10 days
before the cancellation. If the default is cured within this 10-day
period, the company shall not cancel the insurance policy.
3. If the default is not cured within the 10-day period, the
company may cancel the policy if it mails to the insured at his last
known address as indicated in the records of the company and to the
insurer a notice of cancellation which must include the effective date of
cancellation. The policy must be cancelled as if the notice of
cancellation had been submitted by the insured, but without requiring the
return of the policy.
4. No insurance policy may be cancelled for nonpayment of a charge
for a late payment.
5. This section does not authorize the cancellation of an
insurance policy without giving any other notice required by law or
satisfying other conditions for cancellation.
6. A company shall not impose or collect a fee for the
cancellation of a policy or agreement.
(Added to NRS by 1985, 1157; A 1993, 2396)
1. When an insurance policy is cancelled pursuant to NRS 686A.460
, the insurer shall return the
unearned premium to the company for credit to the account of the insured.
The premium must be mailed to the company:
(a) Within 45 days after receipt of the notice of cancellation; or
(b) Immediately following an audit performed to determine the
amount of the premium. If such an audit is performed, it must be
completed within 60 days after receipt of the notice of cancellation.
2. If the returned portion of the premium exceeds the insured’s
obligation to the company, the company shall pay the excess to the
insured within 30 days after receipt, except that no refund is required
if the excess is less than $1.
3. If the returned portion of the premium is less than the
insured’s obligation to the company, the company shall notify the insured
within 15 days making a demand for payment, except that the company shall
not make a demand for payment if the obligation is less than $1.
4. The company shall notify the agent who submitted the agreement
of any refund paid directly to the insured pursuant to subsection 2 at
the time the refund is paid. Within 15 days after receipt of this notice,
the agent shall refund to the insured any unearned commissions which are
owed to the insured as a result of the cancellation.
5. The company shall notify the agent who submitted the agreement
of any deficiency. Within 30 days after receipt of the notice, the agent
shall refund to the insured any unearned commissions which are owed to
the insured as a result of the cancellation.
(Added to NRS by 1985, 1157; A 1993, 2396)
An agreement must not
include any payment for:
1. Membership in a motor club, as that term is defined in NRS
696A.050 ; or
2. A policy of insurance covering accidental death or
dismemberment, whether or not the policy is sold in combination with
another policy.
(Added to NRS by 1985, 1157)
1. No agreement may contain a provision allowing a company
recourse against the agent who submitted the agreement based upon the
insured’s default in payments.
2. A company, broker or an agent of a company shall not offer to
any person as an inducement to enter an agreement any gift, rebate or
other consideration unless the consideration is an article of less than
$2 in value which includes an advertisement of the company. This
subsection does not prohibit a company from providing to a broker or an
agent who submits the agreement to the company any supplies or equipment
necessary to submit the agreement to the company. Any such supplies or
equipment which is not disposable remains the property of the company.
3. A company or an agent or broker submitting an agreement shall
not:
(a) Induce or attempt to induce an insured to become obligated
under more than one agreement to obtain more than one initial charge for
entering the agreement.
(b) Write any insurance in connection with the agreement, including
life or health insurance limited to the amount advanced on behalf of the
insured.
(Added to NRS by 1985, 1158; A 1993, 2397)
1. Any licensed resident or nonresident agent or broker who has
any financial interest in a company, other than in submitting agreements
through the company, shall disclose to the insured, in the manner
prescribed by the Commissioner, his interest in the company.
2. A licensed resident or nonresident agent or broker who submits
any agreement shall not accept any compensation for arranging, directing
or performing services in connection with the agreement. A company shall
not pay or offer to pay any compensation to a licensed resident or
nonresident agent or broker who submits an agreement to the company.
(Added to NRS by 1985, 1158; A 1993, 2397)
1. A person who violates the provisions of NRS 686A.340 shall be punished by a fine of not more than
$200 per day or $500 per agreement per day for every day the violation
continues, whichever is greater.
2. A person who violates any other provision of NRS 686A.330
to 686A.520 , inclusive, shall be punished by a fine of
not more than $1,000.
3. A person who fails or refuses to comply with an order issued by
the Commissioner pursuant to NRS 686A.330 to 686A.520 , inclusive, shall be punished by a fine of
not more than $1,000.
(Added to NRS by 1985, 1158; A 1993, 2397)
1. The provisions of NRS 683A.341 , 683A.451 , 683A.461 , 683A.480 and 686A.010 to 686A.310 , inclusive, apply to companies.
2. For the purposes of subsection 1, unless the context requires
that a section apply only to insurers, any reference in those sections to
“insurer” must be replaced by a reference to “company.”
(Added to NRS by 1985, 1158; A 2001, 2215 )
USE OF CONSUMER CREDIT INFORMATION
As used in NRS 686A.600 to 686A.730 , inclusive, unless the context otherwise
requires, the words and terms defined in NRS 686A.610 to 686A.660 , inclusive, have the meanings ascribed to
them in those sections.
(Added to NRS by 2003, 2801 )
“Adverse action” means a
denial or cancellation of, an increase in any charge for, or a reduction
or other adverse or unfavorable change in the terms of coverage or amount
of, any insurance, existing or applied for, in connection with any policy.
(Added to NRS by 2003, 2801 )
“Affiliate” means any company
that controls, is controlled by or is under common control with another
company.
(Added to NRS by 2003, 2802 )
“Consumer credit
report” means any written, oral or other communication of information by
a consumer reporting agency bearing on the credit worthiness, credit
standing or credit capacity of an applicant or policyholder, and which is
used or expected to be used or collected in whole or in part for the
purpose of serving as a factor to determine:
1. Whether to issue, cancel or renew a policy; or
2. The amount of the premium for a policy.
(Added to NRS by 2003, 2802 )
“Consumer
reporting agency” means any person which, for monetary fees, dues or on a
cooperative nonprofit basis, regularly engages in whole or in part in the
practice of assembling or evaluating consumer credit information or other
information on consumers for the purpose of furnishing consumer credit
reports to third parties.
(Added to NRS by 2003, 2802 )
“Credit information”
means any information that is related to credit and derived from a
consumer credit report, found on a consumer credit report or provided on
an application for a policy. The term does not include information that
is not related to credit, regardless of whether it is contained in a
consumer credit report or in an application for a policy, or is used to
calculate an insurance score.
(Added to NRS by 2003, 2802 )
“Insurance score” means a
number or rating that is derived from an algorithm, computer application,
model or other process that is based in whole or in part on credit
information for the purposes of predicting the future losses or exposure
with regard to an applicant or policyholder.
(Added to NRS by 2003, 2802 )
The provisions of NRS 686A.600 to 686A.730 , inclusive, do not apply to a contract of
surety insurance issued pursuant to chapter 691B of NRS or any commercial or business policy.
(Added to NRS by 2003, 2802 )
An
insurer that uses information from a consumer credit report shall not:
1. Use an insurance score that is calculated using income, gender,
address, zip code, ethnic group, religion, marital status or nationality
of the consumer as a factor, or would otherwise lead to unfair or
invidious discrimination.
2. Deny, cancel or fail to renew a policy on the basis of credit
information unless the insurer also considers other applicable
underwriting factors that are independent of credit information and not
expressly prohibited by this section.
3. Base renewal rates for a policy upon credit information unless
the insurer also considers other applicable factors independent of credit
information.
4. Take an adverse action against an applicant or policyholder
based on the applicant or policyholder not having a credit card account
unless the insurer also considers other applicable factors independent of
credit information.
5. Consider an absence of credit information or an inability to
calculate an insurance score in underwriting or rating a policy unless
the insurer does any one of the following:
(a) Treats the applicant or policyholder as otherwise approved by
the Commissioner, after the insurer presents to the Commissioner
information indicating that such an absence or inability relates to the
risk for the insurer.
(b) Treats the applicant or policyholder as if the applicant or
policyholder had neutral credit information, as defined by the insurer.
(c) Excludes the use of credit information as a factor, and uses
only underwriting criteria other than credit information.
6. Take an adverse action against an applicant or policyholder
based on credit information, unless an insurer obtains and uses a
consumer credit report issued or an insurance score calculated within 90
days from the date the policy is first written or renewal is issued.
7. Except as otherwise provided in this subsection, use credit
information regarding a policyholder without obtaining an updated
consumer credit report regarding the policyholder and recalculating the
insurance score at least once every 36 months. At the time of the annual
renewal of a policyholder’s policy, the insurer shall, upon the request
of the policyholder or the policyholder’s agent, reunderwrite and rerate
the policy based upon a current consumer credit report or insurance
score. An insurer need not, at the request of a policyholder or the
policyholder’s agent, recalculate the insurance score of or obtain an
updated consumer credit report of the policyholder more frequently than
once in any 12-month period. An insurer may, at its discretion, obtain an
updated consumer credit report regarding a policyholder more frequently
than once every 36 months, if to do so is consistent with the
underwriting guidelines of the insurer. An insurer does not need to
obtain an updated consumer credit report for a policyholder if any one of
the following applies:
(a) The insurer is treating the policyholder as otherwise approved
by the Commissioner.
(b) The policyholder is in the most favorably-priced tier of the
insurer and all affiliates of the insurer. With respect to such a
policyholder, the insurer may elect to obtain an updated consumer credit
report if to do so is consistent with the underwriting guidelines of the
insurer.
(c) Credit information was not used for underwriting or rating the
policyholder when the policy was initially written. The fact that credit
information was not used initially does not preclude an insurer from
using such information subsequently when underwriting or rating such a
policyholder upon renewal, if to do so is consistent with the
underwriting guidelines of the insurer.
(d) The insurer reevaluates the policyholder at least once every 36
months based upon underwriting or rating factors other than credit
information.
8. Use the following as a negative factor in any insurance scoring
methodology or in reviewing credit information for the purpose of
underwriting or rating a policy:
(a) Credit inquiries not initiated by the applicant or
policyholder, or inquiries requested by the applicant or policyholder for
his or her own credit information.
(b) Inquiries relating to insurance coverage, if so identified on
the consumer credit report.
(c) Collection accounts relating to medical treatment, if so
identified on the consumer credit report.
(d) Multiple lender inquiries, if identified on the consumer credit
report as being related to home loans or mortgages and made within 30
days of one another, unless only one inquiry is considered.
(e) Multiple lender inquiries, if identified on the consumer credit
report as being related to a loan for an automobile and made within 30
days of one another, unless only one inquiry is considered.
(Added to NRS by 2003, 2802 )
If it is determined pursuant to the dispute resolution process
set forth in section 611(a) of the federal Fair Credit Reporting Act, 15
U.S.C. § 1681i(a), that the credit information of a policyholder was
incorrect or incomplete and if the insurer receives notice of such
determination from either the consumer reporting agency or from the
policyholder, the insurer shall reunderwrite and rerate the policyholder
within 30 days of receiving the notice. After reunderwriting or rerating
the insured, the insurer shall make any adjustments necessary, consistent
with its underwriting and rating guidelines. If an insurer determines
that the policyholder has overpaid a premium, the insurer shall refund to
the policyholder the amount of overpayment calculated back to the shorter
of either the last 12 months of coverage or the actual period of the
policy.
(Added to NRS by 2003, 2804 )
1. If an insurer uses credit information in underwriting or rating
an applicant, the insurer or its agent shall disclose, either on the
application for the policy or at the time the application is taken, that
the insurer may obtain credit information in connection with the
application. The disclosure must be written or provided to an applicant
in the same medium as the application. The insurer need not provide the
disclosure required pursuant to this section to a policyholder upon
renewal of a policy if the policyholder was previously provided the
disclosure in connection with the policy.
2. An insurer may comply with the requirements of this section by
providing the following statement:
In connection with this application for insurance, we may review your
credit report or obtain or use a credit-based insurance score based on
the information contained in that credit report. We may use a third party
in connection with the development of your insurance score.
(Added to NRS by 2003, 2804 )
If
an insurer takes an adverse action based upon credit information, the
insurer shall:
1. Provide notice to the applicant or policyholder that an adverse
action has been taken, in accordance with the requirements of section
615(a) of the federal Fair Credit Reporting Act, 15 U.S.C. § 1681m(a).
2. Provide notice to the applicant or policyholder explaining the
reasons for the adverse action. The reasons must be provided in
sufficiently clear and specific language so that a person can identify
the basis for the insurer’s decision to take the adverse action. The
notice must include a description of not more than four factors that were
the primary influences of the adverse action. The use of generalized
terms such as “poor credit history,” “poor credit rating” or “poor
insurance score” does not meet the requirements of this subsection.
Standardized explanations provided by consumer reporting agencies are
deemed to comply with this section.
(Added to NRS by 2003, 2804 )
1. An insurer shall indemnify, defend and hold harmless an agent
of the insurer from and against all liability, fees and costs arising out
of or relating to the actions, errors or omissions of the agent with
regard to obtaining or using credit information or insurance scores for
the insurer, if the agent follows the instructions of or procedures
established by the insurer and complies with any applicable law or
regulation.
2. This section does not provide, expand, limit or prohibit any
cause of action an applicant or policyholder may have against an agent of
an insurer.
(Added to NRS by 2003, 2804 )
1. A consumer reporting agency shall not provide or sell data or
lists that include any information that in whole or in part was submitted
in conjunction with:
(a) An inquiry by or for an insurer about the credit information of
an applicant or policyholder; or
(b) A request for a credit report or insurance score.
2. The information described in subsection 1 includes, without
limitation:
(a) The expiration date of a policy or any other information that
may identify time periods during which a policy of an applicant or
policyholder may expire; and
(b) The terms and conditions of the coverage provided by a policy
of an applicant or policyholder.
3. The restriction set forth in subsection 1 does not apply to
data or lists the consumer reporting agency supplies to the insurer, or
an agent or affiliate of the insurer, from whom the information was
received.
4. The provisions of this section do not restrict any insurer from
being able to obtain a report regarding a motor vehicle or a report of a
history of claims.
(Added to NRS by 2003, 2805 )
