Who Needs Which Nevada Insurance License?

Start with the activity, not the job title

Nevada does not issue one all-purpose "insurance license." It sorts people by what they actually do and whom they do it for. Each kind of work has its own license or registration, with its own requirements.

This matters right away. A person called "customer service representative" who starts recommending policies for a commission may need a producer license. A person called "account manager" who only processes paperwork for a salary may not. The work decides, not the title.

When you meet a new role, ask three questions:

1. What is the person doing? Selling insurance, running part of an insurer's business, handling claims, giving paid advice, placing coverage with an insurer that is not authorized in Nevada, or writing bail.
2. Whom do they act for? An insurer, a reinsurer, the insured, a paying client, or a bail company.
3. What kind of insurance is involved? Property, casualty, a narrow product such as rental car coverage, workers' compensation, health, and so on.

What you will be able to do

By the end of this lesson, you should be able to:

• Decide whether an activity requires a Nevada producer license, and recognize the main conditional exceptions.
• Trace the resident and nonresident routes to a producer license, including exam exemptions, and tell limited-line authority from general authority.
• Distinguish an ordinary producer from a managing general agent, a reinsurance intermediary and an administrator.
• Distinguish producers from adjusters, insurance consultants and surplus-lines brokers.
• Recognize what a bail agent does, and how that differs from what a bail enforcement agent does.

Before you start: You should already know what an insurer is and what it means for an insurer to be "authorized" in Nevada. An authorized insurer holds a Nevada certificate of authority, which is the state's permission to do insurance business here. An unauthorized insurer does not. If you need a refresher, review Insurers: identity, domicile, authority and transactions.

Producer: the person licensed to sell insurance

A producer of insurance is someone who sells insurance and must be licensed to do it. Nevada law defines a producer as a person required to be licensed to sell, solicit or negotiate insurance. In everyday terms:

• Sell means completing the sale of a policy.
• Solicit means trying to get someone to buy, such as urging a person to apply for a particular policy.
• Negotiate means discussing a policy's terms on someone's behalf, for example working out coverage or price for a buyer.

The core rule: No one may sell, solicit or negotiate insurance in Nevada for a class of insurance (a category, such as property) unless they hold a license for that class. Someone who transacts insurance without a required license faces an administrative fine of up to $1,000 for each violation.

Four details change real answers:

• The insurer itself is exempt, but its people are not. The insurer company does not need a producer license. That exemption does not extend to the insurer's officers, directors, employees, subsidiaries or affiliates if they sell, solicit or negotiate.
• A business can be a producer, but it needs its own license. An agency organized as a business must be licensed as a producer to act as one. It must also name a licensed individual producer who is responsible for the business's compliance with Nevada insurance law.
• The license is for a class. A property license is permission for property insurance, not for every kind of insurance.
• Some people are exempt, but only when every condition is met. These exceptions are covered next.

The conditional exceptions

Nevada lists people who do not need a producer license. Each exception has conditions, and selling, soliciting or negotiating usually removes the exception. Here are the ones most relevant to a property office:

• Office and support staff. An officer, director or employee of an insurer or of a producer is exempt if two things are true. First, the person receives no commission on policies covering Nevada risks. Second, the person's work is one of the following:
• executive, administrative, managerial or clerical work only indirectly related to selling;
• underwriting, loss control, inspection or claims work; or
• technical help to licensed producers that does not include selling, soliciting or negotiating.
• Staff answering existing customers. An employee who answers requests from people who already hold policies is exempt if three things are true:
• the employee's pay is not directly based on the volume of premium that might result;
• the employee does not solicit; and
• the employee does not advise on policy terms or conditions.
• Inspection and rating staff. Insurer employees who inspect, rate or classify risks, or who supervise producer training, are exempt if they are not individually selling, soliciting or negotiating.
• In-house advisers. A salaried full-time employee who advises their own employer about the employer's insurance is exempt if the employee does not sell, solicit or take a commission.

Example: same employer, different work

Fictional case. Mara works for Sagebrush Mutual, a fictional authorized insurer. A caller asks about homeowners coverage. Mara compares two policy options, recommends one, and earns a bonus for each policy sold.

1. What is Mara doing? Recommending a policy to a prospective buyer is soliciting.
2. Does Sagebrush's exemption cover her? No. The insurer's exemption does not extend to its employees who solicit.
3. Does a staff exception apply? No. She earns pay tied to sales, and her work is directly related to selling.

So Mara needs a producer license for that class.

Change one fact. Mara is now paid only a salary. She enters application data that licensed producers have already collected, and she never recommends coverage. She receives no commission, and her work is clerical and only indirectly related to selling. The office-staff exception can apply, so she does not need a producer license for this work.

The tempting mistake is to decide from the job title or from who the employer is. Neither one controls the answer. The test is what the person does and how they are paid.

Check your understanding

Leo is a salaried employee of a licensed agency. A current policyholder calls to add a newly purchased trailer to their existing policy. Leo processes the change. Then the caller asks whether they should raise their liability limit, and Leo tells them which limit they should choose. Leo's pay does not depend on premium volume. Does the existing-customer exception cover everything Leo did?

Getting a producer license: resident and nonresident routes

A Nevada producer license is issued only after the applicant meets the requirements. No single step grants it automatically, including passing an exam.

Resident route (you live in Nevada)

Before approving a resident individual's application, the Commissioner must find that the applicant:

• is at least 18 years old;
• has not done anything that is a ground for refusing a license;
• has paid the required fees, which are nonrefundable; and
• has passed the exam for each line of authority requested, unless exempt. A line of authority is a category of insurance the license allows you to handle, such as property.

A resident applicant must also submit fingerprints for a background check and maintain a valid email address. The written exam tests:

• the lines of authority being requested;
• a producer's duties and responsibilities; and
• Nevada insurance law.

Nonresident route (your home is another state)

A nonresident producer license is for a person whose home state is somewhere else. Nevada issues one, unless it refuses on statutory grounds, if the person:

• is currently licensed as a resident, and in good standing, in their home state;
• has made a proper request and paid the fees;
• has sent their home-state application or a completed uniform application;
• comes from a home state that licenses Nevada residents as nonresident producers by substantially the same process (this is called reciprocity, meaning each state treats the other's residents the same way); and
• maintains a valid email address.

If a nonresident producer moves from one state to another, they must file a change of address and a certification from the new home state within 30 days. No new application or fee is required for that change.

Exam exemptions are not license exemptions

Some applicants can skip the exam. They still need a license.

• Previously licensed for the same lines elsewhere. No education or exam is needed if one of these is true:
• the applicant is currently licensed for those lines in the other state;
• the application arrives within 90 days after that license was canceled and the other state certifies good standing at cancellation; or
• the national regulators' records (kept by the National Association of Insurance Commissioners) show the applicant is or was licensed and in good standing for those lines.
• Moving to Nevada. A licensed person who moves here and wants to become a resident producer can use this exemption only if they apply within 90 days after establishing legal residence in Nevada.
• Narrow products. No exam is required for a producer who limits their work to insurance categorized as limited line, credit, travel, portable electronics or rental car.

Example: the 90-day window

Fictional case. Theo holds a resident property license in another state and is in good standing. He moves to Las Vegas and becomes a Nevada resident. Forty days later, he applies for a Nevada resident property license.

• He is applying within 90 days of establishing residence, and he was licensed for the same line. He can use the exemption from education and exam.
• He still files the application, pays the fees, submits fingerprints and meets the other findings.

Change one fact. Theo waits 120 days. He is past the 90-day window, so he cannot use the mover's exemption. He would need to pass the Nevada exam for his line.

Check your understanding

Ana lives in Arizona, holds a resident license there, and is in good standing. She wants to sell in Nevada but is not moving. Which route fits her? Does a perfect score on a practice exam change anything?

Lines of authority: general property authority vs. a limited line

A license lists its lines of authority: the specific kinds of insurance you may handle. The major lines include:

• Property: coverage for direct or consequential loss of or damage to property of every kind.
• Casualty: coverage for legal liability, such as liability for injuring someone or damaging their property. This is a separate line from property.
• Personal lines: automobile and motorcycle insurance, and residential property insurance, including coverage for flood, personal watercraft and excess liability written over underlying auto or residential policies.

A limited line is a narrow product license. It gives less than the full authority of the major line it relates to. Nevada's current limited lines are:

• travel;
• rental car;
• portable electronics;
• crop; and
• personal property storage.

A nonresident who holds a limited-line license in their home state is entitled to a matching Nevada nonresident license with the same scope as the home-state license. The scope stays the same; it does not grow into general authority.

Example: what the license covers

Fictional case. Priya works at a phone store and holds a portable electronics limited-line license. She offers protection coverage for the phones customers buy. That work is inside her authority.

A customer who owns a small warehouse asks Priya to quote coverage for fire damage to the building. That is commercial property insurance, which falls under the full property line. Her limited line does not cover it.

Change one fact. Priya also holds the property line. Now she may handle coverage for damage to the warehouse. She still could not sell liability coverage for injuries to visitors, because that is casualty, a separate line.

The tempting mistake is to think that any license containing the word "property" (for example, "personal property storage") gives general property authority. A limited line is restricted by definition.

Check your understanding

A rental car counter clerk holds the rental car limited line. A customer asks the clerk to also sell them a homeowners policy. Does the clerk's license allow it? Did the clerk need to pass an exam for the rental car line?

Managing general agent: an agent who runs part of an insurer's business

An ordinary producer sells policies. A managing general agent (MGA) goes further: it runs part of an insurer's business as the insurer's agent. It makes production, underwriting and claims or reinsurance decisions at a scale the law measures.

Nevada's main test has two parts, and both must be met.

Part 1. The person does at least one of these:

• negotiates and binds (puts into effect on the insurer's behalf) reinsurance that the insurer buys; or
• manages all or part of the insurer's insurance business, including a separate division, department or underwriting office.

Part 2. The person acts as the insurer's agent and also does both of these (alone or together with affiliates, whether or not it has formal authority to do so):

• Produces and underwrites a large volume. The person brings in and underwrites (decides whether to accept risks and on what terms) gross direct written premium at least equal to 5% of the insurer's policyholder surplus. Gross direct written premium is the total premium on policies written directly. Policyholder surplus is a figure in the insurer's last annual statement (its yearly financial report) that measures the insurer's financial cushion. The 5% test applies to any one quarter or year.
• Handles claims or reinsurance. The person either adjusts or pays claims above an amount the Commissioner sets, or negotiates reinsurance on the insurer's behalf.

There is a second way to be an MGA. A person with authority to appoint agents for an insurer, and to end those appointments, is also included.

Some people are excluded even if they do this work:

• the insurer's own employees;
• the manager of a foreign insurer's United States branch;
• the attorney authorized to act for the members of a reciprocal insurer (an insurer formed by members who insure one another); and
• certain underwriting managers under common control with the insurer whose pay is not based on premium volume or profit.

Example: applying both parts

Fictional case. Juniper Insurance Company reported policyholder surplus of $30,000,000 in its last annual statement. Desert Line Underwriters, an outside agency, manages Juniper's commercial property department as Juniper's agent.

Teaching assumption: For this exercise, assume the Commissioner's claims amount is $100,000. This is not the actual figure.

1. Part 1: Desert Line manages a department of Juniper's business. Met.
2. The 5% threshold: 5% of $30,000,000 is $1,500,000. In one quarter, Desert Line produced and underwrote $1,800,000 of gross direct written premium. Since $1,800,000 is at least $1,500,000, the threshold is met.
3. Claims or reinsurance: Desert Line pays claims up to $250,000. That is more than the assumed $100,000 amount. Met.

All parts are met, so Desert Line is an MGA.

Change one fact. Desert Line is instead an ordinary agency that sells one very large policy carrying $2,000,000 of premium. It does not manage any Juniper department, does not underwrite for Juniper, and does not pay claims. Part 1 fails, so it is not an MGA. A large premium total alone, or a grand-sounding title, does not create an MGA.

Check your understanding

Westwind Agency has written authority from an insurer to appoint new agents for that insurer and to end their appointments. Westwind handles no claims. Can Westwind be an MGA?

Reinsurance intermediaries: brokers and managers for insurers' own coverage

Reinsurance is insurance that an insurer buys to cover some of its own risk. Two terms describe the sides:

• The insurer passing on risk is the reinsured, also called the ceding insurer (to "cede" is to hand over).
• The company accepting that risk is the reinsurer.

Nevada names two intermediary roles. Intermediary is the umbrella term that covers both.

• Broker for reinsurance: acts for the reinsured. It negotiates a reinsurance contract between the reinsured and a reinsurer, and it receives a commission for placing the contract and related services. The ceding insurer itself is not a broker for reinsurance.
• Manager for reinsurance: acts for the reinsurer. As the reinsurer's agent, it has authority to bind or manage all or part of the reinsurance the reinsurer has taken on. Some people are not managers for these purposes, including:
• the reinsurer's own employees;
• the manager of a foreign reinsurer's United States branch;
• certain affiliated underwriting managers not paid by premium volume; and
• the manager of certain joint underwriting or reinsurance groups who is examined by another state's regulator.

Licensing at a glance. To act as a broker or manager for reinsurance for a Nevada-based (domestic) insurer or reinsurer, a person must be either:

• a licensed Nevada producer; or
• licensed in Nevada as a nonresident intermediary (for brokers) or nonresident manager (for managers).

The same requirement applies to work for an out-of-state or foreign insurer or reinsurer if the person keeps an office in Nevada. A manager for reinsurance must also:

• file a bond in an amount acceptable to the Commissioner, to protect the reinsurer; and
• carry errors-and-omissions coverage (insurance against the manager's own professional mistakes) in an acceptable amount.

Compare with an MGA. An MGA is the insurer's agent. Part of the MGA test even involves buying reinsurance for the insurer. A manager for reinsurance is the reinsurer's agent, managing reinsurance the reinsurer has assumed. The question that separates them is: whose agent is this?

Check your understanding

Cobalt Re Partners negotiates reinsurance on behalf of a Nevada insurer that wants to pass some of its risk to a reinsurer. Cobalt is paid a placement commission. Is Cobalt a broker or a manager for reinsurance?

Administrator: running premiums and claims for certain benefit programs

An administrator handles the business back office of certain insurance and benefit programs for someone else. Under Nevada's definition, an administrator does one or more of the following:

• underwrites, collects charges or premiums, or adjusts or settles claims from within Nevada in connection with workers' compensation, life or health insurance, or annuities, including employer-provided coverage;
• administers an employer's self-insurance program;
• administers an employer-funded program providing pensions, annuities, health or death benefits;
• administers a pharmacy benefit program; or
• administers certain public-employee funds and trusts.

Notice that property insurance is not on this list. Collecting premiums or settling claims for a property insurer does not, by itself, fit this definition.

Several people are not administrators, including:

• an employer acting for its own employees;
• a labor union acting for its members;
• an insurer acting on its own policies (although an insurer doing this work for another, unaffiliated insurer can be an administrator);
• a licensed life or health producer whose activities are limited to selling;
• banks, credit unions and similar supervised financial institutions; and
• an employee of a registered administrator.

What an administrator must do

• Register. Hold a certificate of registration from the Commissioner: the state's permission to act as an administrator. Acting without one carries a fine of $300 to $2,000.
• License claims staff for workers' compensation. An individual administrator who adjusts workers' compensation claims in Nevada, and each employee who does so, must be licensed under Nevada's adjuster law.
• Have a written agreement with an insurer. It must state the administrator's duties and the lines of insurance it may administer. Both sides keep a copy for 5 years after the agreement ends.
• Stay within the insurer's control. The administrator may advertise only with the underwriting insurer's approval, must pay claims by check or draft drawn on and authorized by the insurer, and must deliver the insurer's written communications to insureds.
• Delegate only with approval. A registered administrator may hand duties to an unregistered one only with the Commissioner's written approval.

There are narrow exceptions:

• A licensed health maintenance organization (HMO) or a licensed nonprofit hospital or medical service corporation may contract to administer a health program. The HMO must file the contract for approval; the nonprofit corporation must notify the Commissioner. Either one is then exempt from the administrator licensing and bonding provisions but subject to the rest.
• The Commissioner may waive requirements for a person or class of persons after considering specified factors.

The Commissioner can suspend or revoke a registration and can fine up to $2,000 per violation.

Example: who is the administrator?

Fictional case. Silver Basin Benefits, located in Reno, collects premiums and settles claims for a group health policy issued by Great Basin Life & Health. Silver Basin is not the insurer and is not the employer. It fits the definition, so it needs a certificate of registration and a written agreement with the insurer. It pays claims only by insurer-authorized check or draft.

Change one fact. The employer's own human-resources staff handle the program for the employer's own employees. An employer acting on behalf of its employees is excluded from the definition, so the employer is not an administrator.

Check your understanding

A licensed health producer sells group health policies and does nothing else for those plans. A second company collects the premiums for those same plans and settles their claims from a Nevada office. Which one is an administrator?

Adjusters: claims work, not sales

An adjuster works on claims after a loss, not on sales. Under Nevada law, an adjuster is a person who, for compensation (a fee, commission or other pay):

• investigates and settles claims, and reports to the person they work for; and
• handles claims under property, casualty or surety contracts (including workers' compensation), or claims against a self-insurer providing similar coverage.

The adjuster works for only one side: the insurer or the insured.

Nevada recognizes four adjuster types. An individual may be licensed as only one type at a time.

• Independent adjuster: represents an insurer or self-insurer as an outside contractor, or as an employee of one, and is treated as a contractor for tax purposes.
• Public adjuster: employed by, and representing solely the financial interests of, the insured named in the policy. A public adjuster does not handle workers' compensation claims.
• Company adjuster: a salaried insurer employee who investigates, negotiates or settles property, casualty or surety claims (workers' compensation included) and holds an adjuster license.
• Staff adjuster: handles workers' compensation claims under the authority of a registered administrator. Nevada's adjuster law calls these registered administrators "third-party administrators."

Many people are not adjusters under this law, including:

• a salaried insurer employee, unless the employee handles workers' compensation claims and obtains an adjuster license;
• a salaried employee of an MGA with an underwriting office in Nevada;
• attorneys adjusting incidentally to their law practice;
• people who only gather facts or do clerical claims work;
• fraud investigators who do not adjust losses or decide payments; and
• people who settle only reinsurance or subrogation claims (claims an insurer brings to recover what it paid from whoever caused the loss).

Producer vs. adjuster. A producer license is built around selling, soliciting and negotiating. Adjusting is a different activity defined in a different chapter, with its own license types. The producer law also confirms the split: an insurer or agency employee whose function is claims work, and who receives no commission, does not need a producer license for that work.

Example: one storm, different roles

Fictional case. Hail damages the roof of Rosa's bakery.

• The bakery's insurer hires an outside claims firm, which is treated as a contractor for tax purposes, to investigate and settle the claim. That firm's adjuster is an independent adjuster.
• Rosa hires someone to represent only the bakery's financial interests in the claim. That person is a public adjuster.
• The insurer's salaried claims employee reviews the file. That employee handles only property claims and is not licensed, so this person is not an "adjuster" under the adjuster law.

Change one fact. The salaried employee handles workers' compensation claims and holds an adjuster license. Now the employee is a company adjuster.

Check your understanding

A licensed public adjuster is offered extra work as an independent adjuster for an insurer. Can the person hold both adjuster licenses? What does the public adjuster role tell you about whom they serve?

Insurance consultant: paid by the client for advice

An insurance consultant is paid by a client for advice about insurance, not for selling it. Nevada defines a consultant as a person who, for a fee, holds themselves out to the public as in the business of advising on the benefits, advantages or disadvantages of insurance policies that could be issued in Nevada.

A consultant license is required to do this business, unless the person is:

• a Nevada-licensed attorney acting in their professional capacity;
• a licensed producer, broker or surplus-lines broker;
• a bank trust officer acting in the normal course of their job; or
• an actuary or certified public accountant acting in their professional capacity.

Acting as a consultant without a required license can bring a fine of up to $1,000 per act or violation.

The separation rule. A licensed consultant may not employ, be employed by, or be in partnership with any licensed producer, surplus-lines broker or insurer. The consultant also may not receive any pay from them that arises from consulting work. This keeps the advice independent of sales commissions.

Example: advice vs. sales

Fictional case. Dana advertises policy-review services to the public and charges homeowners $150 an hour to explain what their policies do and do not cover. Dana is not a licensed producer, attorney, trust officer, actuary or CPA. Dana is acting as an insurance consultant and needs a consultant license.

Change one fact. Dana is a licensed producer. A producer does not need a separate consultant license.

Change a different fact. Dana holds a consultant license and an insurer offers Dana a referral payment for clients who buy its policies. Dana cannot accept that payment.

The tempting confusion is with the in-house adviser exception in the producer law. A salaried full-time employee advising their own employer about its insurance is not holding themselves out to the public for a fee, so that is a different situation.

Check your understanding

A licensed consultant's client asks the consultant to also receive a commission from the producer who sells the client a policy, "since you did the research anyway." Is that permitted?

Surplus-lines broker: placing coverage with an insurer not authorized in Nevada

Some risks cannot be covered by insurers authorized in Nevada. Surplus lines insurance is insurance obtained through a broker from a nonadmitted insurer, meaning an insurer not authorized in Nevada, that is eligible to accept it. Placing insurance this way is called exporting it.

When Nevada is the insured's home state (the state treated as the insured's base for surplus-lines purposes), coverage may be exported only under conditions. The core ones are:

• Through a licensed broker. The coverage must be placed through a licensed surplus-lines broker, or obtained directly by the insured where the law permits.
• After a diligent effort. The full amount of insurance needed must be unavailable from authorized insurers after a diligent effort to find it.
• Not to get a lower price. Coverage may not be exported just to get a lower premium. A difference in price alone does not justify exporting if any authorized insurer is able and willing to carry the risk.
• Not for cost-related term differences. Differences in policy terms that affect cost, between policies that otherwise give substantially the same coverage, do not justify exporting either.

Who may be a surplus-lines broker. No one may act as a surplus-lines broker for risks where Nevada is the insured's home state without a Nevada surplus-lines broker license. There are two qualifying routes:

• licensed in Nevada as a producer for general lines (broad, not limited-line, authority) for at least 6 months; or
• licensed in another state as a surplus-lines broker and still licensed there.

In either case, the Commissioner must judge the person competent and trustworthy to handle surplus lines. The person must also apply, pay fees, submit the statement the surplus-lines law requires, and pass any surplus-lines exam the Commissioner prescribes. Meeting one of the routes makes a person eligible to apply; it does not grant the license.

Placement rules are covered further in Nevada rate standards and surplus-lines placement.

Example: when exporting is allowed

Fictional case. Luis has held a Nevada producer license with property and casualty authority for 8 months. A Nevada client needs coverage for an unusual fireworks warehouse. After a diligent search, no authorized insurer will write the full amount. Luis may qualify to apply for a surplus-lines broker license through the 6-month route. A licensed surplus-lines broker could then place the coverage with an eligible nonadmitted insurer.

Change one fact. An authorized insurer is willing to write the full coverage, but a nonadmitted insurer quotes a lower premium. The coverage cannot be exported just to get the lower price.

Check your understanding

Mei has held a Nevada property and casualty producer license for 4 months. She has never held a surplus-lines license anywhere. Does she meet either qualification route for a Nevada surplus-lines broker license today?

Bail agents and bail enforcement agents: a separate licensing system

Bail work has its own chapter of Nevada law. Most of the general Insurance Code does not apply to bail agents except where specifically stated. A property producer license is not permission to do bail work.

• A bail agent writes bail bonds for a surety insurer. The legal definition is an individual who is paid, or promised something of value, and who is appointed by an authorized surety insurer (an insurer that guarantees someone else's obligation) through a power of attorney (written authority to sign for the insurer) to sign or countersign undertakings of bail. An undertaking of bail is the written bail commitment in a court case.
• A bail enforcement agent enforces the release terms; this person does not sell bail. The definition is a person contracted or employed by a surety or bail agent to enforce the terms of a defendant's release on bail in a criminal case, and to locate, apprehend or surrender the defendant to custody.

Each role has its own qualification list. For example:

• A bail agent must be appointed by an authorized surety insurer and must file a bond.
• A bail enforcement agent must be at least 21 and must submit, among other things, a psychological evaluation and a drug test.

Both licenses are issued only to individuals, with limited exceptions for certain corporations owned and controlled by a surety insurer or by licensed agents. Nonresidents can hold a nonresident bail agent license if they meet specified requirements.

Check your understanding

A licensed bail agent hires Jordan to find a defendant who has violated the release terms and return the defendant to custody. Jordan never signs any bail paperwork. Which role is Jordan performing? Would a Nevada property producer license authorize it?

Put it together: sort by activity

Practice on your own

These are new situations. Use the three questions: what is the person doing, for whom, and with what kind of insurance?

Practice 1

Sienna Agency LLC is licensed as a business producer with property authority. It hires Omar as an unlicensed assistant. Omar starts calling prospects to recommend specific property policies and earns $25 per policy sold. Is the agency's license enough to cover Omar?

Practice 2

Hana lives in Oregon and holds a crop limited-line license there in good standing. Oregon licenses Nevada residents as nonresidents by substantially the same process. She applies for a Nevada nonresident license. What scope can she get? Can she use it to sell commercial property coverage for a farm's barns?

Practice 3

Ridgeback Underwriters acts as an insurer's agent and manages its inland marine department. In one year it produces and underwrites $900,000 in gross direct written premium. The insurer's last annual statement shows $20,000,000 of policyholder surplus. Ridgeback also negotiates reinsurance for the insurer. Ridgeback does not appoint agents. Is Ridgeback an MGA?

Practice 4

A company acts as agent for a reinsurer and binds reinsurance the reinsurer takes on. It has an office in Nevada and works for an out-of-state reinsurer. What role is this? What two safeguards does Nevada require of this role?

Practice 5

Pinecrest Claims Services is a registered administrator for an insurer's workers' compensation business. Its employee Tomas investigates and settles those workers' comp claims. Does Tomas need any license? Is Pinecrest allowed to pay claims from its own account at its discretion?

Practice 6

After a kitchen fire, a homeowner hires Felix to represent only the homeowner's financial interests against the insurer. Felix suggests he could also sell the homeowner a new policy afterward. Which adjuster type is Felix? Does that role let him sell the policy?

Practice 7

Grace charges small businesses a flat fee to compare the advantages and disadvantages of policies they are considering. She advertises this service publicly. She is a certified public accountant and is acting within her CPA practice. Does she need an insurance consultant license?

Practice 8

A Nevada business owner's producer finds two authorized insurers willing to write the full coverage needed. A nonadmitted insurer offers the same coverage for 15% less. The owner asks the producer to "go surplus lines." Can the coverage be exported?

Practice 9

Ruth is a licensed Nevada property producer. A neighbor asks her to sign the bail paperwork for a relative's release, and offers to pay. Can Ruth do this under her producer license?

What to remember

• Activity and principal decide the license. Ask what the person does, for whom, and with what kind of insurance. Job titles and employer identity do not decide it.
• Producer: Selling, soliciting or negotiating requires a license for that class. The insurer's exemption does not cover its people. Exceptions depend on all their conditions, especially no commission and no selling.
• Routes: Residents meet age, fitness, fee, fingerprint, email and exam requirements, unless exempt. Nonresidents rely on a home-state license in good standing plus reciprocity. Exam exemptions, including the 90-day mover rule and the limited-line exemptions, do not remove the license requirement.
• Lines: Property and casualty are separate lines. A limited line is narrower than general authority, and a nonresident limited line keeps its home-state scope.
• MGA: Acts for the insurer. Either it meets all parts of the management, volume (5% of policyholder surplus) and claims-or-reinsurance test, or it has authority to appoint and terminate agents.
• Reinsurance: A broker acts for the reinsured. A manager acts for the reinsurer. "Intermediary" covers both.
• Administrator: Handles workers' comp, life, health, annuity and employer benefit programs, not property insurance by definition. It needs registration and a written insurer agreement, and it operates under the insurer's control.
• Adjuster: Handles claims for one side. There are four types, and a person holds only one at a time. Adjusting is not selling.
• Consultant: Gives fee-based advice to the public and is licensed separately unless exempt. A licensed consultant takes no pay from producers, surplus-lines brokers or insurers for consulting work.
• Surplus-lines broker: Needs its own license, qualifying through 6 months of Nevada general-lines licensing or a continuing other-state surplus-lines license. Coverage may be exported only when it is unavailable from authorized insurers after diligent effort, and never for price alone.
• Bail: The bail agent writes bail for a surety insurer. The bail enforcement agent enforces release terms. Both are outside producer licensing.

Next, follow a producer license from first application through renewal in From application to renewal: a producer's licensing lifecycle.