Add Nevada to the growing list of states that have adopted domestic surplus lines legislation. Senate Bill 86 (the “Bill”) was signed into law on June 1, 2019, with most provisions effective October 1, 2019. Of perhaps most significance Is that Nevada will now allow for insurance companies to domesticate in Nevada for the exclusive purpose of writing surplus lines insurance coverage within the state and potentially elsewhere. Prior to domestic surplus lines legislation, insurance carriers that desired to write surplus lines insurance on a nationwide basis were required to establish dual insurance companies. Under the old regime, the an insurance carrier would obtain licensure in a certain state and became “eligible” to write in all other U.S. jurisdictions on a surplus lines basis, and a second carrier would obtain admitted, licensed status in a state other than the first carrier’s home state for the sole purpose of placing surplus lines coverage in the first carrier’s home state. Fortunately, states are starting to fix this inefficiency, and Nevada is now joining Arizona, Arkansas, Connecticut, Delaware, Georgia, Illinois, Louisiana, Missouri, New Hampshire, New Jersey, North Carolina, North Dakota, Oklahoma, Texas, Virginia, and Wisconsin as the states that have adopted surplus lines legislation.
The Bill also clarifies that Nev. Rev. Stat. § 685A-155 will allow surplus lines brokers to charge insurance policy fees provided that such surplus lines brokers are directly engaged by or on behalf of a potential insured, and provided further that the total fee may not exceed 20% of the premium charged.
The Bill also removes the onerous requirement that all adjusters (including non-resident adjusters) maintain a place of business in Nevada and now only imposes such requirement on resident Nevada adjusters. The Bill also enacts changes applicable to captives, risk retention groups, annual assessments, the surrender of certificates of authority, receivership, submission of closed claims reports, service contract provider applications, examiner assistant expenses, filings of quarterly statements, and countersignature requirements.
A copy of the Bill can be found here.
The post LL Surplus Lines Series (Entry 10): Nevada Joins List of Domestic Surplus Lines Insurer States; Revises Broker Fee Statute; Other Changes appeared first on Insurance & Reinsurance.
Visit our Insurance & Reinsurance Blog for the latest news and developments.Visit the blog
Sign up for our newsletter and get the latest to your inbox.