FREQUENTLY ASKED QUESTIONS
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LICENSING
| Q. | 1. HOW DO I APPLY FOR A NEVADA SURPLUS LINES BROKER LICENSE? |
| A. | Nevada's laws, regulations, licensing instructions and forms can be accessed from the Nevada Division of Insurance website at www.doi.state.nv.us. At the top of the home page click on forms, click on insurance forms, under the index click on producer licensing section. Note: there isn't a separate application for surplus lines. There is a box to check on the application to indicate the type of license for which you are applying. Nevada Division of Insurance will accept the NAIC Uniform Business Entity Application and the NAIC Uniform Individual Application. If you have questions regarding licensing contact the Division of Insurance at (775) 687-4270. |
| Q. | 2. What is the fee to obtain a surplus lines brokers license? |
| A. | The fee for a resident or non-resident is $135 licensing fee and $60 per agency affiliation. The business entity is $135. |
| Q. | 3. How can I verify license information? |
| A. | License verifications are available on-line 24 hours a day, 7 days a week. To view the information you can subscribe to the NAIC's Producers Data Base (PDB) at www.licenseregistry.com or SIRCON at www.sircon.com. |
| Q. | 4. Once I'm a licensed Nevada Surplus Lines Broker, how do I become a member of the Nevada Surplus Lines Association (NSLA)? |
| A. | A broker must be a member of NSLA as a condition of continued licensure under NRS 685 Upon notification from the Nevada Division of Insurance regarding your license status, we will mail an introduction letter. If you have received your license and did not receive a letter from NSLA, fax or e-mail (see contact us tab) NSLA a copy of your license, phone, fax, e-mail address, mailing address and name of contact person. |
BROKERS RESPONSIBILITIES
| Q. | 5. Whose responsibility is it to determine insurer's financial solvency? |
| A. |
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. |
| Q. | 6. Does Nevada require due diligence? |
| A. |
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 affidavit required by NRS685A.050 and the report of coverage, 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 in this State have declined to provide that coverage. NAC685A.240 (g) 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 NAC685A.215 are not required on the affidavit and report of coverage. |
| Q. | 7. Does Nevada allow acceptance of business (courtesy filings) from agents or brokers? |
| A. |
NAC 685A.220
1. 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. 2. The broker shall maintain the records and files prescribed by NRS685A.160 and NAC685A.250 on coverage placed by him for any producing agent or broker. NRS685A.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. |
| Q. | 8. How long do I have to file an affidavit? |
| A. |
NRSA.050
2. The broker shall file this affidavit with the report of coverage and any other information the Commissioner requires within 90 days after the insurance is so effected, as required under regulations adopted pursuant to NRS685A.210. |
| Q. | 9. Is a penalty imposed for filing an affidavit after 90 days? |
| A. |
NSLA does not have authority to impose penalties or abate them. The Nevada
Division of Insurance is currently imposing a $50 late penalty for late filings.
Please note that 90 days is not the same as three months. The Commissioner of
Insurance has authority to impose fines against producers, including surplus
lines brokers, for any violation of Title 57. NRS683A.451 (2) and
NRS 683A.461(3) allows the Commissioner to suspend or revoke a
producer's license, or impose an administrative fine, or a combination thereof
as a result of a producer's violation of Title 57. Specifically,
NRS 683A.461(3) provides for the imposition of a fine from between
$25 and $500 per violation.
Checks for late filing penalties are made payable to the Nevada Division of Insurance or NDOI. |
| Q. | 10. Does Nevada require specific wording on the insurance contract? |
| A. |
NRS685A.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. |
| Q. | 11. What information is required on the insureds contract? |
| A. |
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 and taxes collected from the insured, the name and address of the insured and insurer and must state that the broker has verified that the insurance described has been granted or issued. Refer to above statute for entire paragraph. NAC 685A.235 1. Immediately following the statement required pursuant to NRS 685A.090, every insurance contract procured and delivered as a surplus lines coverage pursuant to chapter 685A of NRS must bear the original signature and the license number of the broker who procured the insurance contract. |
| Q. | 12. 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? |
| A. | A licensed Nevada surplus lines broker may make the filing. We do not distinguish between retailer and wholesaler or resident and non-resident. The one who is responsible for; negotiating, effecting the placement, remitting the premium and filing the affidavit, shall be considered transacting under his or her surplus lines broker's license and responsible for making the filing. |
| Q. | 13. When am I required to file an affidavit? |
| A. | An affidavit must be filed for a new or a renewal of a contract of insurance. 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, or the coverage, conditions, terms, premiums, or participating insurers (NAC 685A.240). Endorsements extending the policy for any length of time are treated the same as renewals and if the line and class does not appear on the approved export list, must meet the due diligence requirements. |
| Q. | 14. How do I obtain a login and password and/or change the existing one? |
| A. | After you have received your surplus lines brokers license, you will receive a temporary password. Your login is your license number and remains the same. Periodically the system will prompt you to change your password for security reasons. We also suggest you change the password whenever you have a change in personnel. Please note that there is one password for each license number. It is the licensed broker's responsibility to monitor the password information. By giving an employee use of the password, the broker is extending his or her authority under their license to that employee. |
TAXES AND FEES
| Q. | 15. What is Nevada's filing fee? |
| A. |
NAC 685A.370
Each broker who is a member of an organization shall pay to the organization a fee for the review of surplus lines coverage. The fee must be paid within 30 days after the broker receives an invoice from the organization. The fee for each policy is .4%(.004) of the amount subject to tax pursuant to NRS 685A.180. The filing fee changed on January 1, 2007. Note: You will receive an invoice for filing fees via fax each month for the filings received in the prior month. You may access your invoice by clicking on the "view the filing fee invoice" on the index after you have logged on to our website www.nsla.org Filing fees are made payable to Nevada Surplus Lines Association or NSLA. |
| Q. | 16. What is the surplus lines premium tax? |
| A. |
The premium tax is a tax paid to the State of Nevada, on surplus lines coverage written by a broker with unauthorized eligible insurers, accessed at the same rate of tax as imposed by law on the premiums of like coverage written by authorized insurers. The current premium tax rate is 3.5%.
Tax payments are made payable to the State of Nevada. |
| Q. | 17. Does Nevada require an Annual Statement? |
| A. |
NRS 685A.170
1. Each broker shall on or before March 1 of each year file with the Commissioner a statement verified by the broker of all surplus lines insurance transacted by him during the preceding calendar year. A statement must be filed whether or not the broker has transacted any business during the preceding year. |
| Q. | 18. Does Nevada require quarterly reports? |
| A. |
NRS 685A.175
Within 45 days after the end of each calendar quarter, a broker who has written coverage which will require him to pay more than $1,000 in taxes for coverage written in that calendar quarter shall pay the tax for the quarter to the Commissioner and shall file with the Commissioner, or with a nonprofit organization of brokers in accordance with regulations adopted…. (Refer to above statute for the entire paragraph) Note: At the end of each quarter, a quarterly report will be faxed to you if you had activity during that quarter. You may access a copy of the report by clicking on the "view the quarterly tax statement" on the index after you have logged in on our website www.nsla.org. |
| Q. | 19. Do all fees and taxes need to be disclosed? |
| A. | All premiums, fees, inspection fees, premium taxes and filing fees must be shown separately on the insureds copy of the insurance contract. The document used to file the affidavit must be a copy of the same document provided to the insured. |
| Q. | 20. What is an inspection fee? |
| A. |
NAC 685A.230
1. The broker may pass on an inspection fee to the insured and may collect the fee from him as part of the premium if the fee is directly related to an independent inspection required by insurers for insurance. The broker shall maintain a copy of each inspection report and each invoice or statement related to the report in his files. 2. An inspection fee that is charged to the insured must be shown as a separate item on the broker's certificate, the cover note or both (insurance contract). |
GENERAL
| Q. | 21. Does Nevada have an independently procured coverage provision? |
| A. | Refer to NRS 680B.040. The form may be obtained from tax.state.nv.us Click on the common forms tab on the home page (left side). Scroll down to excise tax, then insurance premium tax, and then independent procured. The form is PT-06 |
| Q. | 22. Are there any exemptions to the Surplus Lines Law? |
| A. |
There are only five (5) exemptions to the Surplus Lines Law. The five exemptions are wet marine, property located outside Nevada, railroads, aircraft of common carriers, automobile liability written through Mexican insurers and covering in Mexico and not U.S. Refer to NRS 685A.020. |
| Q. | 23. How do I correct a filing that was made incorrectly? |
| A. | NSLA is unable to amend any filings made by a broker. It is the broker's responsibility to file an amended affidavit to make a correction to a filing already processed. |
| Q. | 24. How can I print a confirmation to provide verification of filing? |
| A. | After a filing has been certified and sent by the broker and NSLA has transferred the filing to it's database, you may print a confirmation by clicking on the "view broker report" on the index after you have logged in on our website www.nsla.org. After you have accessed the broker report (this report is date range sensitive), click on the insured's name and a "Confirmation of Filing" will appear. |
| Q. | 25. Does Nevada maintain a list of eligible surplus lines insurers? |
| A. | The Nevada Division of Insurance (NDOI) maintains the list of eligible insurers. NDOI notifies NSLA of changes to the list and we update the information on our website. |
| Q. | 26. What is a surplus line broker's certificate? |
| A. | This should not be confused with a "certificate" issued as proof of insurance to third parties, typically by a retail agent/broker, such as an "ACORD" certificate. A surplus line broker's certificate is a document evidencing the placement of insurance with an eligible non-admitted insurer. |
| Q. | 27. What is a binder or cover note and can I file an affidavit using a binder in lieu of the declaration page? |
| A. | A binder is a temporary insurance contract providing coverage until the insurer either issues, or declines to issue, a formal policy. The binder includes the usual terms of the type of policy bound. Binders are sometimes called "cover notes" especially by alien insurers. You may use a binder or cover note to file an affidavit. We prefer you wait for the actual policy. If a policy premium is different from the premium originally submitted on the binder, the broker must file an amended affidavit. It is not necessary to file a policy if a binder was filed and contained all the required information. |
| Q. | 28. What is a master policy and the filing requirements? |
| A. | A master policy is a single contract issued to a group, such as an association and filed on a group basis. This type of coverage is typically issued for an indefinite term, so there is no expiration date. Group members receive certificates as evidence of membership summarizing benefits provided and are considered third party beneficiaries of the master policy. If the master policy is filed with a master policy number and one group name, an affidavit would be required on the inception date and each anniversary of the inception date. If the individual insured is being filed separately under the certificate name and number, it would be treated as individual policies and an affidavit would be required for each certificate. |
| Q. | 29. Are Risk Purchasing Groups (RPG) handled differently from other placements? |
| A. | Risk Purchasing Groups placements are not treated any differently from other surplus lines placements. |
| Q. | 30. Does Nevada maintain an export list? |
| A. |
The Nevada Division of Insurance maintains the export list. The export list
contains the line and class of business that can be exported to the surplus
lines market without the broker having to conduct a diligent search of the
admitted market. All policies are assigned a code to provide the Nevada
Division of Insurance with a more accurate scope of the broad range of
businesses that utilize the surplus line market.
For instructions on how to use the export list or to view the export list, click on the "export list" tab. |
| Q. | 31. Does Nevada have an industrial insured exemption provision? |
| A. | Refer to NRS680A.070 |
| Q. | 32. How do I file a multi-state policy? |
| A. | Nevada is an allocation state. If the risk is located or to be performed in Nevada an affidavit must be filed for Nevada's portion of the premium. Nevada's premium, tax and fees must be shown on the document. We suggest you contact all states involved in the placement to verify their requirements. |
| Q. | 33. What is the annual filing requirments for surplus lines insurers? |
| A. | Click on www.doi.state.nv.us/checklist/UnauthorizedInsurers08.pdf for instructions. If you need additional information go to www.doi.state.nv.us and click on the Corporate and Finance Section. |
Note: 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.
NSLA makes reasonable efforts to track laws and
regulations of interest to its membership but does not warrant the accuracy of
any version of laws, regulations, forms or materials posted on this website.
This website is not intended to offer legal advise.