This text of Nevada § 690C.170 (Financial security: Requirements; limitation on use of money in reserve account; effect of failure to maintain) is published on Counsel Stack Legal Research, covering Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
1. To be issued a certificate of registration, a provider must comply with one of the following to provide for financial security:
(a)Purchase a contractual liability insurance policy which insures the obligations of each service contract the provider issues, sells or offers for sale. The contractual liability insurance policy must:
(1)Be issued by an insurer which is licensed, registered or otherwise authorized to transact insurance in this state or pursuant to the provisions of chapter 685A of NRS.
(2)Contain a provision prohibiting the insurer from terminating the policy until a notice of termination has been mailed or delivered to the Commissioner at least 60 days prior to the termination of the policy. Any such termination shall not reduce the responsibility of the insurer for serv
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1. To be issued a certificate of registration, a provider must comply with one of the following to provide for financial security:
(a) Purchase a contractual liability insurance policy which insures the obligations of each service contract the provider issues, sells or offers for sale. The contractual liability insurance policy must:
(1) Be issued by an insurer which is licensed, registered or otherwise authorized to transact insurance in this state or pursuant to the provisions of chapter 685A of NRS.
(2) Contain a provision prohibiting the insurer from terminating the policy until a notice of termination has been mailed or delivered to the Commissioner at least 60 days prior to the termination of the policy. Any such termination shall not reduce the responsibility of the insurer for service contracts issued by the provider prior to the effective date of termination.
(b) Maintain a reserve account in this State and deposit with the Commissioner security as provided in this subsection. The reserve account must contain at all times an amount of money equal to at least 40 percent of the unearned gross consideration received by the provider for any unexpired service contracts. The reserve account must be kept separate from the operating accounts of the provider and must be clearly identified as the “ (Provider’s Name) Nevada Service Contracts Funded Reserve Account.” The Commissioner may examine the reserve account at any time. The provider shall also deposit with the Commissioner security in an amount that is equal to $25,000 or 10 percent of the unearned gross consideration received by the provider for any unexpired service contracts, whichever is greater. The security must be:
(1) A surety bond issued by a surety company authorized to do business in this State;
(2) Securities of the type eligible for deposit pursuant to NRS 682B.030 ;
(3) Cash;
(4) An irrevocable letter of credit issued by a financial institution approved by the Commissioner; or
(5) In any other form prescribed by the Commissioner.
(c) Maintain, or be a subsidiary of a parent company that maintains, a net worth or stockholders’ equity of at least $100,000,000. Upon request, a provider shall provide to the Commissioner a copy of the most recent Form 10-K report or Form 20-F report filed by the provider or parent company of the provider with the Securities and Exchange Commission within the previous year. If the provider or parent company is not required to file those reports with the Securities and Exchange Commission, the provider shall provide to the Commissioner a copy of the most recently audited financial statements of the provider or parent company. If the net worth or stockholders’ equity of the parent company of the provider is used to comply with the requirements of this subsection, the parent company must guarantee to carry out the duties of the provider under any service contract issued or sold by the provider.
2. A provider shall not use any money in a reserve account described in paragraph (b) of subsection 1 for any purpose other than to pay an obligation of the provider under an unexpired service contract.
3. A provider shall maintain the financial security required by subsection 1 until:
(a) The provider ceases doing business in this State; and
(b) The provider has performed or otherwise satisfied all liabilities and obligations under all unexpired service contracts issued by the provider.
4. If the certificate of registration of a provider has not expired and the provider fails to maintain the financial security required by subsection 1, including, without limitation, if the financial security is cancelled or lapses, the provider shall not issue or sell a service contract on or after the effective date of such failure until the provider submits to the Commissioner proof satisfactory to the Commissioner that the provider is in compliance with subsection 1.