FAQs

Licensing

How do I apply for a Nevada surplus lines broker license?

Answer: Nevada's laws, regulations, licensing instructions and forms can be accessed from the Nevada Division of Insurance website at http://www.doi.nv.gov

You will find answers to frequently asked questions and take advantage of the new free look-up capabilities which will allow the public to see if an individual, a business entity (Firm), or an insurer is licensed in Nevada. The new tools include functionality for firms to look up and manage their individual affiliations, license renewals, and required industry reports.

The Division strongly suggests applicants and licensees utilize the new online services to speed up the licensing process to insure statutory compliance when ever possible.

Sircon: The Division recommends Sircon's Producer Edge to insurance producers and adjusters tasked with managing their own personal compliance. Click the Producer EDGE button to activate your no-cost subscription to Producer EDGE and begin easily applying for, renewing, and managing your licenses, upcoming renewals, and CE from one convenient and secure online location. Resident and nonresident producers are encouraged to renew online.

Nonresident applicants may apply online through Sircon at www.sircon.com/nevada or through the National Insurance Producer Registry at www.nipr.com.Be advised transaction fees may apply.

Once I'm a licensed Nevada Surplus Lines Broker, how do I become a member of the Nevada Surplus Lines Association (NSLA)?

Answer: A broker must be a member of NSLA as a condition of continued licensure under NRS 685A. 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.

Brokerage Responsibility

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.

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 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.

NAG.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 NAG.215 are not required on the affidavit and report of coverage.

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 NRS685A.160 and NAG.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.

How long do I have to file an affidavit?

Answer: NRS685A.050

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.

Is a penalty imposed for filing an affidavit after 90 days?

Answer: 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.

Does Nevada require specific wording on the insurance contract?

Answer: 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.

What information is required on the insureds 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 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.

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 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.

When am I required to file an affidavit?

Answer: 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 cancelation 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.

Taxes and Fees

What is Nevada’s filing fee?

Answer: 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 for each policy is .4 (.004) percent of the amount subject to tax pursuant to NRS 685A.180. You may access your invoice by logging on to our website www.nsla.org. Filing fees are made payable to Nevada Surplus Lines Association or NSLA.

What is the surplus lines premium tax?

Answer: 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.

Does Nevada require an Annual Statement?

Answer: With the implementation of the Nonadmitted and Reinsurance Reform Act (NRRA), Nevada passed the conforming bill SB 289. This bill eliminates the requirement of an Annual Tax Statement.

Does Nevada require Quarterly Statements?

Answer: NRS 685A.175, SB 289 amends NRS 685A.175 as follows: A broker who has written coverage for which this State is the insured's home state shall pay, by the date described in subsection 2, the tax for each calendar quarter as directed by the Commissioner and shall file as directed by the Commissioner a copy of a quarterly report which includes an accounting of:

(a) The aggregate gross premiums for the quarter;

(b) The aggregate of the return premiums received;

(c) The amount of tax remitted to the Commissioner; and

(d) The distribution of the exposures of insureds by state in accordance with the requirements of any multi-state agreement entered into by the Commissioner pursuant to section 17 of this act,

2. The tax filings and payments required by subsection 1 must be submitted by:

(a) February 15 for the calendar quarter ending the preceding December 31.

(b) May 15 for the calendar quarter ending the preceding March 31.

(c) August 15 for the calendar quarter ending the preceding June 30.

(d) November 15 for the calendar quarter ending the preceding September 30.

NRS 685A.190 as amended by SB 289 A broker who fails to make and file the quarterly statement required pursuant to NRS 685A.175 is liable for a penalty of $500.

Do all fees and taxes need to be disclosed?

Answer: 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.

What is an inspection fee?

Answer: NAC 685A.230 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).

How do I request a surplus lines tax refund?

Answer: The Nevada Division of Insurance established procedures for requesting tax refunds. The required information and documents can be located by clicking on the NEWS tab on the NSLA home page and clicking on the bulletin "Surplus Lines Tax Refund Procedures" dated November 28, 2012.

 

 

General Questions

Does Nevada have an independently procured coverage provision?

Answer: Refer to NRS 680B.040.The form may be obtained from http://tax.doi.nv.gov. Click on "Common Forms" on left side of home page. Scroll down to "Insurance Premium Tax", scroll down to Independently Procured Insurance and click on the PDF icon to print the form.

Are there any exemptions to the Surplus Lines Law?

Answer: 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.A. Refer to NRS 685A.020.

How do I correct a filing that was made incorrectly?

Answer: 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.

How can I print a confirmation to provide verification of filing?

Answer: After a filing has been submitted to NSLA and we have registered the filing, you may print a confirmation for your records or for another entity requesting a copy of confirmation of filing. Please call our office for instructions. 

What is a surplus line broker’s certificate?

Answer: 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.

What is a binder or cover note and can I file an affidavit using a binder in lieu of the declaration page?

Answer: 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 if a policy has non been received within 60 days of the effective date. 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.

What is a master policy and the filing requirements?

Answer: 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.

Are Risk Purchasing Groups (RPG) handled differently from other placements?

Answer: Risk Purchasing Groups placements are not treated any differently from other surplus lines placements.

Does Nevada maintain an export list?

Answer: 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.

Does Nevada have an industrial insured exemption provision?

Answer: Refer to NRS680A.070

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.