Thursday, June 06, 2013

Nevada Bulletin Clarifies Changes to Nonadmitted Laws

Nevada recently issued Bulletin 13-004 to inform all surplus lines brokers, and insureds who independently procure nonadmitted insurance, of changes to nonadmitted insurance statutes and regulations instituted as a result in federal or state legislation.  Some changes of note in the bulletin are that due diligence searches are now only required if Nevada is the home state of the insured and the insurer is not listed on the Quarterly Listing of Alien Insurers maintained by the NAIC; documentation of a diligent search is now to be made electronically through SLIP rather than through an affidavit.  Additionally, diligent searches are no longer required when dealing with an exempt commercial purchaser. 

Provisions requiring each insurance contract to include the signature and license number of the procuring broker were repealed.  Surplus lines transaction records are no longer required to be maintained separately from other records in a place of business, but the requirement to maintain records stand.  Statutes including eligibility and application requirements for nonadmitted insurance were repealed, as they were preempted by the NRRA and other legislation.  Regulations were amended to clarify that Nevada would collect premium taxes on a 100% home state tax basis.

Finally, the Department included language to reiterate to brokers and insureds that the primary difference between surplus lines and independently procured nonadmitted insurance was the absence of the broker in the transaction, emphasizing that if a broker was involved in the procurement of the policy in any manner then the policy cannot be considered independently procured.

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