Payment of compensation to producer.
1. The payment of compensation to a producer in excess of 40 percent of the net charge for premiums is prima facie a violation of the maximum allowable rates as prescribed in NRS 690A.200, 690A.210 and 690A.220.
2. Any insurer who pays or proposes to pay, directly or indirectly, compensation to a producer that totals more than 40 percent of the net charge for premiums for any policy or certificate shall submit credible statistics annually to the Division to confirm that the rates for the premiums used by the insurer produce a ratio of incurred losses to premium earned of not less than 50 percent. If the insurer cannot prove that ratio to the satisfaction of the Commissioner with annual statistical information, the Commissioner shall withdraw approval of the insurer’s schedule of rates, forms or both the schedule and the forms.
3. The Commissioner may examine any agreement relating to the direct or indirect payment of primary or contingent compensation to a producer to determine whether any person is paying or receiving any form of compensation in violation of this section.
4. As used in this section, “net charge for premiums” means the amount of gross premiums received for credit insurance written, less any refund.
Last modified: February 27, 2006