WHO WE ARE
In order to better serve the consumer and to simplify
reporting of surplus lines, the 1995 legislature passed legislation
enabling the formation of a surplus lines association. The Insurance
Commissioner appointed a board of directors to establish an office and to
hire an executive director. The purpose of this association is to assist
the Commissioner in regulating surplus lines and encourage its members to
comply with all of the provisions of NRS Chapter 685A.
No action or inaction of this association shall relieve any member
and/or broker of responsibility to comply with the law. Each member shall hold
harmless the association, its board of directors, executive director and employees
from any liability that may arise by reason of any member's failure to comply
with any law.
The NEVADA SURPLUS LINES ASSOCIATION has no
regulatory power and is required to promptly report to the Commissioner:
- Violations of chapters 685A AND 685B
- Delinquent, inaccurate, incomplete or improper affidavits, tax
reports, annual statements or declinations
- Insurance Fraud or illegal insurance activity
SURPLUS LINES INSURANCE-WHAT IS IT?
Most insurance in Nevada is written by insurance companies licensed by
the Nevada Division of Insurance. These companies are regulated by the
State in a variety of ways, including restrictions on the amount of
premium charged and policy forms used. However, licensed companies will
not provide all the insurance coverage needed by Nevada citizens. Only
when a needed coverage is rejected by licensed companies can it be written
in the surplus lines market, and then only by those eligible companies on
the Surplus Lines Insurers List.
The Nevada Division of Insurance does not directly regulate the rates
and policy forms used by surplus lines insurers. This provides the
flexibility needed to write the hard-to-place risks found in the surplus
lines market. The typical types of risks written surplus lines include
those that are:
- high risk (explosive manufacturing)
- does not fit standard market underwriting
- requires higher limits than offered by standard markets
- excessive loss history
- specialty coverage (one day events and unique situations)
Definition: Surplus Lines is a statutory provision in state
insurance codes that allows insurance buyers to have access to
non-admitted/unauthorized insurance companies through specially licensed
brokers when the state’s licensed insurers are unable to fulfill the
buyer’s insurance needs.
WHAT DOES THE STAMPING OFFICE DO?
The duties of the Nevada Surplus Lines Association can be summarized
under the following categories:
Each licensed Nevada Surplus Lines broker must provide to our office an
affidavit for each surplus lines insurance policy written. We review these
documents, record them into our computer database, and file each document.
The Stamping Office is then able to compile statistical information on the
Nevada surplus lines market (such as types of coverage and volume of
premium written), as well as provide copies of any individual record when
needed.
Our staff provides frequent technical assistant to callers with
questions regarding surplus lines insurance. We also distribute several
publications, including a Procedures Manual and bulletins.
No action or inaction of this association shall relieve any member
and/or broker of responsibility to comply with the law. Each member shall
hold harmless the association, its board of directors, executive director
and employees from any liability that may arise by reason of any member’s
failure to comply with any law.
Antitrust statement. . . The Nevada Surplus Lines Association
intends to comply fully with all laws and regulations applicable to its
operations. The antitrust laws aim to protect the public from agreements
between competitors that affect the price or distribution of products,
while promoting fair and vigorous competition in the marketplace. Each
NSLA member is solely responsible for their own compliance with these
guidelines and with federal and state antitrust laws.
WHAT IS THE SURPLUS LINES STAMPING OFFICE?
The Nevada Surplus Lines Association is a nonprofit, organization , created
by the legislature in 1995 to assist the insurance commissioner in regulating
surplus lines insurance and encourages its members to comply with all of the
provisions of NRS Chapter 685A.
We are not funded from the general revenues of the State of Nevada. We
are funded by a processing fee, called a “filing fee,” for the review of
surplus lines coverage.
The concept of stamping offices originated in California in 1939.
Currently, 14 stamping offices exist across the US in states, which
collectively account for approximately 50% of all surplus lines insurance
written nationally.
A.M. Best concluded in a 1996 study of surplus lines insurer solvency,
that stamping offices have proven effective in promoting “a strong working
relationship between the surplus lines market and state regulators.” In
addition to Best, the National Association of Professional Surplus Lines
Offices (NAPSLO) and the American Association of Managing General Agents
(AMGA) support the operation of stamping offices as beneficial to
industry, regulators, and insureds.