Nevada Administrative Code Chapter 690A - Credit Insurance
✅ Nevada Administrative Code Chapter 690A – Credit Insurance
1. Overview and Purpose
NAC Chapter 690A governs the regulation of credit insurance in Nevada. Credit insurance is a type of insurance designed to pay off a borrower's debt in certain circumstances such as death, disability, or unemployment.
The chapter supplements the Nevada Revised Statutes (NRS) Chapter 690A, which sets the statutory framework for credit insurance regulation. The administrative code provides detailed rules regarding:
Licensing and conduct of insurers offering credit insurance.
Disclosure requirements and consumer protections.
Policy terms and marketing practices.
Filing and approval of forms and rates.
Enforcement of compliance with state law.
The purpose is to protect consumers by ensuring transparency, fairness, and proper regulation of credit insurance products.
2. Scope and Applicability
Applies to all insurers, agents, and brokers offering or selling credit insurance in Nevada.
Includes various types of credit insurance products such as:
Credit life insurance.
Credit disability insurance.
Credit unemployment insurance.
Applies to all credit insurance policies issued in Nevada regardless of the lending institution.
3. Key Provisions
a) Licensing Requirements
Insurers must be licensed to offer credit insurance in Nevada.
Agents and brokers selling credit insurance must hold appropriate licenses.
Licensees must comply with continuing education and ethical standards.
b) Policy Forms and Filing
All credit insurance policy forms must be filed with and approved by the Nevada Division of Insurance before use.
Forms must clearly state coverage terms, exclusions, and conditions.
Rates must also be filed and justified, ensuring they are not excessive, inadequate, or unfairly discriminatory.
c) Disclosure and Consumer Protections
Clear and conspicuous disclosure to consumers is required before sale, including:
Explanation of coverage.
Cost of the insurance.
Cancellation rights.
Limits and exclusions.
Insurers must provide written notice to consumers about:
Their right to cancel.
Conditions under which benefits are payable.
Prohibited practices include misrepresentation or deceptive marketing.
d) Policy Cancellation and Refunds
Policies may be canceled by the insured within a specified "free-look" period with a full refund.
Refunds for cancellations after the free-look period must be calculated on a pro-rata basis.
Insurers must comply with specific rules about handling refunds and policy terminations.
e) Claims Handling
Insurers must process claims promptly and fairly.
Requirements for documentation, proof of loss, and dispute resolution are specified.
Insurers must maintain records to demonstrate compliance.
f) Marketing and Sales Practices
Marketing materials and sales scripts must be approved and accurate.
Agents must avoid high-pressure sales tactics.
Solicitation through lenders must comply with transparency rules.
g) Penalties and Enforcement
Violations of NAC Chapter 690A can result in fines, license suspension, or revocation.
The Nevada Division of Insurance enforces compliance through audits and investigations.
4. Relevant Case Law and Legal Principles
While there are limited Nevada appellate cases focused exclusively on NAC 690A, general principles from insurance law and consumer protection cases apply:
📌 Case Principle: Duty of Disclosure
Insurers and agents have a legal obligation to disclose material facts to the insured.
Failure to disclose or misrepresentation can lead to rescission of the policy or damages for consumer fraud.
📌 Case Principle: Policy Interpretation
Courts interpret credit insurance policies using standard principles of contract law.
Ambiguities are typically construed in favor of the insured.
Clear policy language governs the scope of coverage and exclusions.
📌 Case Principle: Good Faith and Fair Dealing
Insurers owe a duty of good faith and fair dealing in claims handling.
Bad faith denials or delays in payment can lead to liability beyond the policy terms.
📌 Case Example: Cancellation and Refund Rights
Courts uphold consumer rights to cancel within the free-look period.
Disputes over refunds are resolved by applying the pro-rata refund rules under the administrative code.
5. Practical Implications
| Stakeholder | Responsibilities / Impact |
|---|---|
| Insurers | Must file and obtain approval of forms and rates; comply with disclosure and claims rules. |
| Agents/Brokers | Must be licensed and provide truthful, clear information; avoid deceptive practices. |
| Consumers/Borrowers | Entitled to clear disclosures, cancellation rights, and fair claims handling. |
| Nevada Division of Insurance | Oversees enforcement, licensing, and consumer protection. |
6. Summary
NAC Chapter 690A establishes a comprehensive regulatory framework to:
Ensure credit insurance products are clearly explained and fairly priced.
Protect consumers from deceptive sales practices.
Guarantee prompt and fair claims handling.
Provide licensing and enforcement mechanisms to maintain industry integrity.
Nevada courts support these regulations by emphasizing consumer protection, insurer disclosure duties, and the need for good faith in insurance transactions.
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