Nevada Administrative Code Chapter 683C - Insurance Consultants
Background
NAC Chapter 683C regulates:
Licensing of insurance consultants
Standards of conduct and ethical obligations
Continuing education requirements
Fees and compensation
Disciplinary procedures
The Insurance Division of Nevada enforces these rules to protect the public and maintain professional standards.
Case 1: Unlicensed Insurance Consulting
Issue
An individual provided insurance advice and charged fees without a consultant license.
Facts
Conducted risk assessments and recommended policies.
Accepted fees for consultation.
Did not hold a Nevada insurance consultant license.
Rules Applied
NAC 683C.030 – License required to practice
NAC 683C.100 – Prohibited acts without license
Board’s Analysis
Any individual providing paid insurance advice must be licensed.
Advertising as an “insurance consultant” without licensure violates the rules.
Public protection is paramount; knowledge alone does not grant authority.
Outcome
Cease-and-desist order issued
Administrative fine imposed
Individual barred from licensing for a set period
Key Lesson
Licensure is mandatory for compensation, not just for credibility.
Case 2: Failure to Disclose Conflicts of Interest
Issue
A licensed insurance consultant failed to disclose financial ties to certain insurers.
Facts
Recommended policies from a company in which they had a financial stake.
Clients were unaware of the relationship.
Received commissions in addition to consultation fees.
Rules Applied
NAC 683C.160 – Duty to disclose conflicts
NAC 683C.170 – Prohibition of unfair practices
Board’s Analysis
Consultants must provide impartial advice.
Undisclosed financial relationships constitute a breach of fiduciary duty.
Clients rely on the consultant’s recommendations to be objective.
Outcome
License suspension for 6 months
Requirement to notify affected clients and return improperly received fees
Ethics and compliance course mandated
Key Lesson
Transparency is a core principle of insurance consulting.
Case 3: Misrepresentation of Qualifications
Issue
Consultant misrepresented credentials on marketing materials.
Facts
Claimed advanced designations or continuing education hours not earned.
Clients hired consultant based on those claims.
Rules Applied
NAC 683C.150 – Misrepresentation prohibited
NAC 683C.200 – Grounds for disciplinary action
Board’s Analysis
Misrepresentation undermines trust and public confidence.
Even exaggeration of education or experience counts as a violation.
Outcome
Formal reprimand
Fine imposed
Corrective advertising required to clarify actual credentials
Key Lesson
Accuracy in credentials and advertising is mandatory.
Case 4: Improper Fee Practices
Issue
Consultant charged fees that were inconsistent with the NAC rules.
Facts
Billed clients in advance for services not yet rendered.
Refused to refund overpayments when contracts were canceled.
Rules Applied
NAC 683C.190 – Fee agreements must be fair and transparent
NAC 683C.200 – Prohibition on unethical practices
Board’s Analysis
Fees must be reasonable, clearly disclosed, and refundable if the service is not delivered.
Exploitative fee structures violate the public interest standard.
Outcome
Fine assessed for each affected client
Refunds ordered
Mandatory training on fee disclosure and ethical billing
Key Lesson
Ethical fee practices are strictly enforced to protect clients.
Case 5: Failure to Complete Continuing Education
Issue
Consultant did not complete required continuing education (CE) before license renewal.
Facts
Licensee renewed license without submitting proof of CE.
CE audit revealed missing credits for two renewal cycles.
Rules Applied
NAC 683C.070 – Continuing education requirement
NAC 683C.200 – Grounds for disciplinary action
Board’s Analysis
Continuing education ensures up-to-date knowledge of insurance law and products.
Failure to comply is a violation regardless of actual competence.
Outcome
License placed on probation
Required to complete CE hours within 90 days
Renewal delayed until compliance verified
Key Lesson
Compliance with CE requirements is a licensing condition, not optional.
Case 6: Inadequate Record-Keeping
Issue
Consultant failed to maintain proper records of client recommendations and transactions.
Facts
Audit revealed missing contracts, fee receipts, and policy recommendations.
Clients complained they could not verify advice given.
Rules Applied
NAC 683C.180 – Records must be maintained for a defined period
NAC 683C.200 – Violations constitute grounds for disciplinary action
Board’s Analysis
Record-keeping is essential for accountability and client protection.
Absence of records obstructs audits and investigations.
Outcome
Fine imposed
Required to implement a formal record-keeping system
Follow-up audit scheduled in six months
Key Lesson
Proper documentation is not just administrative—it protects both consultant and client.
Case 7: Misleading Marketing of Insurance Products
Issue
Consultant promoted certain policies as “guaranteed” without disclosure of exclusions.
Facts
Clients relied on statements of guaranteed returns.
Actual policies had limitations and risk that were not explained.
Rules Applied
NAC 683C.150 – Misrepresentation prohibited
NAC 683C.200 – Unfair or deceptive acts
Board’s Analysis
Marketing must be truthful and not misleading.
Exaggerated claims constitute a violation of the public trust.
Outcome
Cease-and-desist order for marketing materials
Required revised disclosures for all clients
Ethics and compliance course mandated
Key Lesson
Marketing must accurately reflect policy terms to avoid misleading clients.
Overall Themes from NAC 683C Cases
Licensing is mandatory for practice.
Ethical conduct is central: conflicts, transparency, honesty, and fees.
Continuing education and record-keeping are not optional.
Violations are treated seriously, regardless of intent.
RELATED Blog
comments