Insurance Concepts and Regulations

Domicile

  • Definition: The location where an insurer is incorporated.

  • Key point: Location, location, location.

  • Types:

    • Domestic: Incorporated in the same state. Think "in my house, in my state."

    • Foreign: Incorporated in another state. Think "outside my house, outside my state."

    • Alien: Incorporated in another country. Think "unknown."

Certificate of Authority

  • Definition: What an insurer needs to transact business in a state.

  • Authorized (Admitted): Approved to transact insurance in a state.

  • Non-Authorized (Non-Admitted): Not approved to transact insurance in a state.

  • Exception: Surplus Lines Broker

    • Definition: An agent or company that obtains insurance for difficult-to-cover individuals or situations.

    • Example: A person with multiple DUIs or DWIs, or a property owner charged with arson.

    • Key point: Surplus lines brokers work with non-admitted insurers.

Commissioner of Insurance

  • Duties:

    • Supervises insurance business.

    • Conducts examinations, investigations, and hearings.

    • Licenses insurance companies, producers, and agents.

    • Enforces insurance laws and imposes penalties for violations.

    • Approves policy forms.

    • Does NOT set premium rates or establish fines/penalties; these are determined by law.

  • Examinations of Insurers:

    • Required at least once every five years.

    • The insurance company pays for the examination.

    • The commissioner can conduct examinations more frequently if desired.

Violations, Hearings, Cease and Desist, and Penalties

  • Process:

    • If an insurer or agent is suspected of a violation or unfair trade practice, the department is notified and issues a statement of charges.

    • The accused has 60 days to apply for a hearing.

    • 20 days' notice must be given before the hearing.

    • The hearing must be held within 30 days of application.

    • A decision must be made within 30 days after the hearing.

    • There are 30 days to hold a hearing after a denial or nonrenewal.

  • Cease and Desist Order:

    • Can be issued before or after a hearing.

    • Prevents the company/agent from conducting business until the hearing is held.

    • Typically issued in extreme cases (e.g., embezzlement, fraud).

  • Other Penalties:

    • License suspension, revocation, or denial.

    • Fines and other penalties.

Who Is Required to Be Licensed?

  • Anyone transacting insurance.

  • Types of Licensed Individuals:

    • Producer/Agent: Represents the insurance company.

    • Broker: Represents the insured.

    • Nonresident: Licensed in a different home state.

    • Adjuster: Investigates claims between insurer and insured.

    • Consultant: Advises on benefits and dependencies of insurance for a fee.

    • Bail Agent/Enforcer: Posts bonds or enforces terms of release on bond.

    • Reinsurance Intermediary: Broker or manager for reinsurance.

    • Surplus Lines: Conducts business on behalf of a surplus lines insurer (non-admitted).

License Requirements

  • Must be at least 18 years old.

  • Must have good moral character.

  • Must pass the licensing exam.

  • Must not have committed any disqualifying acts or crimes.

  • Must pay licensing fees.

Who Is Not Required to Be Licensed?

  • Anyone not involved in insurance sales.

  • Examples: Executive, administrative, or clerical staff (e.g., office managers, receptionists).

License Renewal

  • In Nevada, licenses must be renewed every three years.

  • Requirements:

    • 30 hours of continued education courses.

    • 3 hours of ethics.

    • Must be specific to the insurance line of business.

  • Renewal Responsibility

    • If you change your address, phone number, or email you have 30 days to update with the commissioner.

  • License Lapse:

    • If the license lapses, it can take up to 12 months to get it reinstated.

Record-Keeping Requirements

  • Insurance Companies:

    • Must keep records for three years.

  • Agents/Producers:

    • Must keep records for three years.

    • Must include the names of the insurer and insured, policy number and expiration date, premiums collected, names of all people they've done business with, and names of anyone that received commissions.

Agent Fiduciary Responsibilities

  • Must treat applicants and insured ethically.

  • Any money (premiums) given to us must be promptly given to the insurer (most states have a 15-day rule).

  • Failure to submit funds will be considered embezzlement.

  • Agents represent the insurance company and should act in their best interest but must also act ethically.

Commission Sharing

  • Only licensed individuals can share in commissions.

  • Agents are permitted to share commissions on policies they are both licensed for.

Unfair Market Practices

  • Misrepresentation: False, misleading, or deceptive statements.

  • Rebating: Offering benefits or services not listed in the policy. Anything greater than 100mustbeincludedinthepolicy.</p></li><li><p>Twisting:Misleadingcomparisonsofpoliciestopersuadesomeonetoswitch/cancel.</p></li><li><p>UnfairDiscrimination:Discriminationinrates,premiums,andbenefits.</p></li><li><p>Defamation:Maliciouslycriticalstatementsaboutapersonorcompany.</p></li><li><p>Fraud:Knowinglyorwillinglymakingfalseorfraudulentstatements.</p></li></ul><h3collapsed="false"seolevelmigrated="true">CancellationandNonrenewal</h3><ul><li><p>Cancellation:Happensbeforetheexpirationdateofthepolicy.</p></li><li><p>Nonrenewal:Happensattheexpirationofthepolicy.</p></li><li><p>NoticeRequirements:</p><ul><li><p>60days′noticeforcancellationofbusiness/commercialproperties.</p></li><li><p>30days′noticeforcancellationofallotherpolicies.</p></li><li><p>10days′noticeforcancellationfornonpaymentofpremium.</p></li><li><p>30days′noticefortheinsuredtocancelafterreceivingnoticesofchangestothepolicy.</p></li></ul></li><li><p>CancellationRegulations:</p><ul><li><p>Mustprovideinstructionsonhowtoapplyforinsurancethroughanapprovedvoluntaryormandatoryrisk−sharingplan.</p></li><li><p>Cannotcancel,refusetorenew,orincreaseapremiumbecauseofnot−at−faultclaims.</p></li><li><p>Cannotcancelorrefusetorenewanautomobilepolicysolelybecauseofage,residence,race,color,creed,nationalorigin,ancestry,oroccupation.</p></li><li><p>Cancellationsarenoteffectiveifthenoticedoesnotincludeareasonforcancellation.</p></li></ul></li></ul><h3collapsed="false"seolevelmigrated="true">StatutesCommontoPropertyandCasualtyInsurance</h3><ul><li><p>Ratesmustnotbeexcessive,inadequate,orunfairlydiscriminatory,norshouldtheydestroycompetitionorcreateamonopoly.</p></li><li><p>CounterSignatureofPolicies:TheinsurermustuseappointedandlicensedagentsofNevadatocreateorrenewapolicy.</p></li><li><p>Binders:</p><ul><li><p>Canonlybeissuedbytheagentissuingthepolicy.</p></li><li><p>Cannotbeeffectiveformorethan90daysunlessextendedfor30daysbythecommissioner.</p></li><li><p>Policieshavetobedeliveredtotheinsuredorinsurerwithin24hoursviafirstclassmailorinperson.</p></li></ul></li><li><p>PaymentofMotorVehiclePhysicalDamage:Claimsmustbepaidwithin30days.</p></li><li><p>VehicleRepairs:Ifthelegalownerisdifferentthantheregisteredowner,thevehiclemustberepairedbyalicensedbodyshopunlessatotallossorrepairisunder100 must be included in the policy.</p></li><li><p>Twisting: Misleading comparisons of policies to persuade someone to switch/cancel.</p></li><li><p>Unfair Discrimination: Discrimination in rates, premiums, and benefits.</p></li><li><p>Defamation: Maliciously critical statements about a person or company.</p></li><li><p>Fraud: Knowingly or willingly making false or fraudulent statements.</p></li></ul><h3 collapsed="false" seolevelmigrated="true">Cancellation and Nonrenewal</h3><ul><li><p>Cancellation: Happens before the expiration date of the policy.</p></li><li><p>Nonrenewal: Happens at the expiration of the policy.</p></li><li><p>Notice Requirements:</p><ul><li><p>60 days' notice for cancellation of business/commercial properties.</p></li><li><p>30 days' notice for cancellation of all other policies.</p></li><li><p>10 days' notice for cancellation for nonpayment of premium.</p></li><li><p>30 days' notice for the insured to cancel after receiving notices of changes to the policy.</p></li></ul></li><li><p>Cancellation Regulations:</p><ul><li><p>Must provide instructions on how to apply for insurance through an approved voluntary or mandatory risk-sharing plan.</p></li><li><p>Cannot cancel, refuse to renew, or increase a premium because of not-at-fault claims.</p></li><li><p>Cannot cancel or refuse to renew an automobile policy solely because of age, residence, race, color, creed, national origin, ancestry, or occupation.</p></li><li><p>Cancellations are not effective if the notice does not include a reason for cancellation.</p></li></ul></li></ul><h3 collapsed="false" seolevelmigrated="true">Statutes Common to Property and Casualty Insurance</h3><ul><li><p>Rates must not be excessive, inadequate, or unfairly discriminatory, nor should they destroy competition or create a monopoly.</p></li><li><p>Counter Signature of Policies: The insurer must use appointed and licensed agents of Nevada to create or renew a policy.</p></li><li><p>Binders:</p><ul><li><p>Can only be issued by the agent issuing the policy.</p></li><li><p>Cannot be effective for more than 90 days unless extended for 30 days by the commissioner.</p></li><li><p>Policies have to be delivered to the insured or insurer within 24 hours via first class mail or in person.</p></li></ul></li><li><p>Payment of Motor Vehicle Physical Damage: Claims must be paid within 30 days.</p></li><li><p>Vehicle Repairs: If the legal owner is different than the registered owner, the vehicle must be repaired by a licensed body shop unless a total loss or repair is under300.

  • Motor Vehicle Physical Damage Appraiser: Must be licensed, and bonded (2,500)andcannothavethousanddollarviolations.</p></li></ul><h3collapsed="false"seolevelmigrated="true">MobileHomeInsurance</h3><ul><li><p>Mustoffertheoptiontopurchaseinsurancetoplayreplacementcost.</p></li><li><p>Coversthecostfortransportingandinstallingthereplacementhome.</p></li></ul><h3collapsed="false"seolevelmigrated="true">PersonalAutoRegulations</h3><ul><li><p>FinancialResponsibility:</p><ul><li><p>Mustshowphysicalresponsibility,liability,orself−insuredretention.</p></li><li><p>Musthaveuninsuredmotoristcoverage.</p></li></ul></li><li><p>NevadaStateLimit(SplitLimits):</p></li><li><p>PremiumDetermination:55yearsoldhasoptiontodefensivedrivingeverythreeyearstoreducepremiumIFnoaccidents.</p><ul><li><p>Insurersmustnotifyinsuredabouttheirrighttorequestthereasonforapremiumincreasewithin30daysofthepolicyexpiration.</p></li><li><p>Policycoverages,limits,exclusions,andautopolicycanexclude,reduce,orlimitcoverageforaspecificpersonorpeopleonapolicy</p></li></ul></li></ul><h3collapsed="false"seolevelmigrated="true">InlandMarineCoverage</h3><ul><li><p>Appliestomovableproperty.</p></li><li><p>Openperilbasis.</p></li><li><p>Personalarticles;preprintedonthepolicy</p></li><li><p>PersonalEffects:Thingsthatarewornorcarriedbytouristsortravelers.</p></li></ul><h3collapsed="false"seolevelmigrated="true">Worker′sCompensation</h3><ul><li><p>Providescoverageforemployeesinsituationswhereanemployerisliable.</p></li><li><p>Everybusinesswithemployeesisrequiredtoparticipate.</p></li><li><p>Penaltiesforfailingtocomply(inadditiontopremiumpaymentsplusinterest):</p><ul><li><p>Misdemeanorcharge.</p></li></ul></li><li><p>Ifanemployeeisinjuredorkilledwithnoprovidedcoverage:</p><ul><li><p>EmployerwillbechargedwithacategoryCfelonyandfinedbetween2,500) and cannot have thousand dollar violations.</p></li></ul><h3 collapsed="false" seolevelmigrated="true">Mobile Home Insurance</h3><ul><li><p>Must offer the option to purchase insurance to play replacement cost.</p></li><li><p>Covers the cost for transporting and installing the replacement home.</p></li></ul><h3 collapsed="false" seolevelmigrated="true">Personal Auto Regulations</h3><ul><li><p>Financial Responsibility:</p><ul><li><p>Must show physical responsibility, liability, or self-insured retention.</p></li><li><p>Must have uninsured motorist coverage.</p></li></ul></li><li><p>Nevada State Limit (Split Limits):</p></li><li><p>Premium Determination: 55 years old has option to defensive driving every three years to reduce premium IF no accidents.</p><ul><li><p>Insurers must notify insured about their right to request the reason for a premium increase within 30 days of the policy expiration.</p></li><li><p>Policy coverages, limits, exclusions, and auto policy can exclude, reduce, or limit coverage for a specific person or people on a policy</p></li></ul></li></ul><h3 collapsed="false" seolevelmigrated="true">Inland Marine Coverage</h3><ul><li><p>Applies to movable property.</p></li><li><p>Open peril basis.</p></li><li><p>Personal articles; preprinted on the policy</p></li><li><p>Personal Effects: Things that are worn or carried by tourists or travelers.</p></li></ul><h3 collapsed="false" seolevelmigrated="true">Worker's Compensation</h3><ul><li><p>Provides coverage for employees in situations where an employer is liable.</p></li><li><p>Every business with employees is required to participate.</p></li><li><p>Penalties for failing to comply (in addition to premium payments plus interest):</p><ul><li><p>Misdemeanor charge.</p></li></ul></li><li><p>If an employee is injured or killed with no provided coverage:</p><ul><li><p>Employer will be charged with a category C felony and fined between51,000.

  • They can be put in prison for one to five years.

  • It is 60 days to investigate accidents and the administrator has 30 days to provide a determination after the investigation.

    • Insurance terminology

    • Terms to know

    • Administrator = engaged in principal, indemnity, or surety or contract business of entering into contracts of insurance domestic authorized & unauthorized premiums: consideration for a fee of insurance appointment: An agent is appointed b an insurer for an appointee there's 15 days for notice or termination and 30 days to determine if the producer is eligible

    License

    • Revocation, suspension, and refusal of license

    • Suspended no longer than twelve months, withholding monies, unfair trade practices convicted of a felony, fails to pay tax required by law
      Licenses information, revocation, suspension and refusal of license these are reasons why your license could be taken away, so just do not do them suspended no longer than twelve months, , withholding monies, unfair trade practices, convicted of a felony, fails to pay tax required by law if you owe income taxes and you're not paying it that's a bad deal

    General

    • Vicious license application using any other name other than their true legal name, a name close to anyone who has a license already, mislead the public, implies that the applicant is a part of a motor club, hospital service plan ETC if you have been ordered to pay child support and you are in breach of that order and you are not paying your child support or attempting to pay your child support, the insurance commissioner is gonna say 15 days 30 days in the commissioners 30 days is ensure termination, 15 for the insurer to notify

    Casualty Contracts

    • Vehicle insurance: insurance of loss of damage or insurance for loss of OR damage to any LAND vehicle or AIR land vehicle that's different than land aircraft, any draft or riding animal, and any property contained in or on those from any hazard or cause.

    • Liability insurance: insurance for legal liability (for death, injury, disability or damage, damage to property) or or damage by burglary, theft, larceny, robbery, fraud forgery, fraud, malicious malicious malicious mischief, confiscation, or wrongful conversion, disposal or concealment includes bodily injury, security insurance a contract will be paid

    Nevada Guarantee Association

    • *Protects policy owners and beneficiaries in the event that the ER becomes impaired or insolvent, so bankrupt

    • * So this is what happens Before the determination of insolvency, arising within 30 days after the determination of insolvency, before the expiration date of the policy if the date is less than 30 days after the determination before the insured replaces the policy or on request cancels the policy if the insured does so within 30 days of determination