Whose responsibility is it to determine insurer’s financial solvency?
Answer: NAC 685A.205 The broker shall make a reasonable effort to determine the financial solvency of any foreign or alien insurer which is not an admitted insurer before placing any surplus lines insurance with that insurer. To add an insurer to your list of Selected Insurers (under Settings) in SLIP, contact us at info@nsla.org
Does Nevada require due diligence?
Answer: NAC 685A.215 Insurance which is not readily obtainable from admitted insurers after a diligent effort has been made to obtain the insurance, may be obtained from eligible brokers. Upon filing the report required by NRS 685A.050, the broker shall affirm that the coverage is unavailable from admitted insurers and provide evidence that at least three insurers which are marketing that line or class of insurance have declined to provide that coverage. The evidence of declinations does not need to be documented or attached to your SLIP filing. Upon filing the report, complete the three fields under Declination Detail.
NAC 685A.240 (e) If a type of coverage is on the list of open lines eligible for export which is approved by the Commissioner, statements of declinations from admitted insurers pursuant to subsection 1 of NAC 685A.215 are not required on the report.
Does Nevada allow acceptance of business (courtesy filings) from agents or brokers?
Answer: NAC 685A.220 In accepting business from producing agents or brokers, the broker assumes the same statutory responsibilities and obligations as would exist if there were no other producing agent or broker.
The broker shall maintain the records and files prescribed by NRS 685A.160 and NAC 685A.250.
NRS 685A.150 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 thereof.
How long do I have to file a report?
Answer: NRS 685A.050 The broker shall, within 90 days after such insurance is so effected, submit a file with the report of coverage and any other information the Commissioner requires under regulations adopted pursuant to NRS 685A.040.
Does Nevada require specific wording on the insurance contract?
Answer: NRS 685A.090 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."
What information is required on the insured's contract?
Answer: NRS 685A.080 The following information is required: the description and location of the subject of the insurance, coverage, conditions and term of the insurance, the premium and rate charged, taxable fees collected from the insured, the surplus lines premium tax and filing fee, the name and address of the insured, the name of the insurer, and the stamped wording. Refer to above statute for entire paragraph.
Who is responsible for making a filing if two or more persons licensed as surplus line brokers are involved in the placement of a policy?
Answer: A licensed Nevada surplus lines broker may make the filing. We do not distinguish between retailer and wholesaler or resident and non-resident. The person responsible for negotiating, effecting the placement and remitting the premium, shall be considered transacting under his or her surplus lines broker’s license and responsible for making the filing.
Who can charge fees and is there a limit?
Answer: NRS 685A.155 as amended by SB 86 The licensed surplus lines broker who is first engaged by or on behalf of an applicant for insurance may charge a fee for procuring surplus lines coverage. Except as otherwise provided by agreement between the insurer and that broker, the sum of the fee and any other commissions, fees and charges payable to that broker must not exceed 20 percent of the premium paid by the insured.
What transaction types am I required to file?
Answer: NAC 685A.240 A filing must be made for a new or a renewal of a contract of insurance. If the coverage and category code does not appear on the approved export list, the filing must include declination details. You are also required to make an amended filing for each cancellation and each endorsement which changes the named insured, the description or location of the subject of insurance, the coverage, conditions, terms, premiums, or participating insurers. Endorsements extending the policy for any length of time are filed as extensions and treated the same as renewals.
How do I file an endorsement if the Broker of Record (BOR) has changed?
Answer: Endorsements for new business or renewals after a BOR change should be submitted with some wording in the Notes box to alert us of the BOR. We will be able to connect the original filing to your endorsement.
How is Nevada determined as the home state?
Answer: NRS 685A.034 For an insured, the state in which the insured maintain its principal place of business or, in the case of an individual, the individual’s principal residence would be the home state. If 100% of the insured risk is located outside of Nevada, the state to which the greatest percentage of the insured’s taxable premium for that insurance is allocated would be the home state. Refer to the above statute for group insurance.