§ 685A.070 — Eligible insurers

Nevada § 685A.070

• Jurisdiction: Nevada
• Title 57: INSURANCE
• Ch. 685A: Nonadmitted

Text

1. A broker shall not knowingly place surplus lines insurance with an insurer which is unsound financially or ineligible pursuant to this section.
2. With respect to nonadmitted insurance for insureds for which this State is the home state, except as otherwise provided in this section, an insurer is not eligible to accept surplus lines or independently procured risks pursuant to this chapter unless it has capital and surplus or its equivalent in an amount of not less than $15,000,000 or the minimum capital and surplus requirements pursuant to NRS 680A.120 , whichever is greater.
3. The requirements of subsections 2 and 4 and of subsection 1 of NRS 685A.072 may be satisfied by an insurer possessing less than the minimum capital and surplus upon an affirmative finding of acceptability by the Commissioner. The finding must be based upon such factors as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability and company record and reputation within the industry. The Commissioner shall not make an affirmative finding of acceptability when the insurer’s capital and surplus is less than $4,500,000.
4. A broker shall not place surplus lines insurance with a domestic surplus lines insurer, and a domestic surplus lines insurer is not eligible to accept surplus lines, unless:
(a) The domestic surplus lines insurer possesses capital and surplus of not less than $15,000,000; or
(b) The Commissioner has made an affirmative finding of acceptability pursuant to subsection 3.
5. A broker shall not place surplus lines insurance with an alien insurer, unless the alien insurer is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners or, if the alien insurer is not listed on the Quarterly Listing of Alien Insurers, it has and maintains in a bank or trust company which is a member of the United States Federal Reserve System a trust fund established pursuant to terms that are reasonably adequate to protect all of its policyholders in the United States. Such a trust fund must not have an expiration date which is at any time less than 5 years in the future, on a continuing basis. In the case of:
(a) A single alien insurer, such a trust fund must not be less than the greater of $5,400,000 or 30 percent of the gross liabilities of the alien insurer for surplus lines in the United States, excluding any liabilities for aviation, wet marine and transportation insurance, not to exceed $60,000,000, to be determined annually on the basis of accounting practices and procedures that are substantially equivalent to the accounting practices and procedures applicable in this State as of December 31 of the year immediately preceding the date of the determination where:
(1) The liabilities are maintained in an irrevocable trust account in a qualified financial institution in the United States, on behalf of policyholders in the United States, consisting of cash, securities, letters of credit or any other investments of substantially the same character and quality as investments that are eligible investments pursuant to chapter 682A of NRS for the capital and statutory reserves of admitted insurers to write like kinds of insurance in this State. The trust fund, which must be included in any calculation of capital and surplus or its equivalent, must comply with the requirements set forth in the Standard Trust Agreement required for listing with the International Insurers Department of the National Association of Insurance Commissioners;
(2) The alien insurer may request approval by the Commissioner to use the trust fund to pay any valid claim against a surplus line if the balance of the trust fund is not, during any period, less than $5,400,000 or 30 percent of the alien insurer’s current gross liabilities for surplus lines in the United States, excluding any liabilities for aviation, wet marine and transportation insurance; and
(3) In calculating the amount of the trust fund required by this subsection, credit must be given for any deposits for any surplus lines that are separately required and maintained within a state or territory of the United States, not to exceed the amount of the alien insurer’s loss and loss adjustment reserves maintained in that state or territory.
(b) A group of insurers which includes individual unincorporated insurers, such a trust fund must not be less than $100,000,000.
(c) A group of incorporated insurers under common administration, such a trust fund must not be less than $100,000,000. Each insurer within the group must individually maintain capital and surplus of not less than $25,000,000. The group of incorporated insurers must:
(1) Operate under the supervision of the Department of Trade and Industry of the United Kingdom or its successor agency;
(2) Possess aggregate policyholders surplus of $10,000,000,000, which must consist of money in trust in an amount not less than the assuming insurers’ liabilities attributable to insurance written in the United States; and
(3) Maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of United States ceding insurers of any member of the group.
6. A foreign insurer must be:
(a) Authorized in the state of its domicile to write the kinds of insurance which it intends to write in Nevada and for which this State is the home state of the insured; or
(b) A domestic surplus lines insurer in the state of its domicile.

Legislative History

(Added to NRS by 1971, 1674 ; A 1979, 1921 ; 1981, 1018 , 1325 ; 1985, 610 ; 1991, 1627 , 2031 ; 1993, 597 , 2389 ; 1997, 3029 ; 1999, 2797 ; 2003, 3299 ; 2009, 1781 ; 2011, 2014 ; 2019, 1701 )