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Nevada is famous for rolling out the red carpet to welcome visitors from all over the world. But until a few years ago, that welcome sign was not shining brightly for out-of-state insurance agents or adjusters.
Consider that Nevada would allow non-resident agents to get Nevada insurance agent licenses. However, NRS 680A.300 obligated a resident insurance agent to countersign the insurance contract entitling that resident agent to up to 5% cut of the total premium.
Well along came the U.S. Constitution putting an end to all that. The Council of Insurance Agents and Brokers sued the Nevada Insurance Commissioner claiming that NRS 680A.300 violated the Privileges and Immunities Clause of Article IV of the U.S. Constitution. Council of Ins. Agents & Brokers v. Molasky-Arman, 522 F.3d 925 (9th Cir. 2008). That section of the U.S. Constitution was meant to help fuse into one Nation a collection of independent states. Toomer v. Witsell, 334 U.S. 385, 68 S.Ct. 1156, 92 L.Ed. 1460 (1948) In Molasky-Arman case, the Ninth Circuit found that the Nevada law discriminated against non-resident agents where there was no substantial reason for the discrimination beyond the mere fact that they were citizens of other states. The court struck down the law to the extent it violated the U.S. Constitution.
Life was even worse for out-of-state adjusters. Back in 2009, NRS 684A.070 said that you had to live in Nevada or meet at least one of the three exceptions to even get a Nevada Adjuster’s license. That type of discrimination would ultimately come to an end as well. Non-resident adjuster Ronald Reitz wanted to be a Nevada Public Adjuster. He saw the success that the out-of-state agents had had in their suit. He decided to follow their lead.
Reitz lived in California and didn’t meet any of the exceptions. When he applied, the Nevada Insurance Commissioner refused to grant him a license. Like the out-of-state agents, Mr. Reitz argued that the Nevada Adjusters Licensing law unconstitutionally discriminated against out-of-state adjusters. He too argued that the law violated the Privileges and Immunities clause of the U.S. Constitution. It was no surprise when the U.S. District Court, District of Nevada found that the adjuster’s law was also unconstitutional. Reitz v. Kipper, 674 F.Sup.2d 1194 (D. Nev. 2009).
So now Nevadans can say “Welcome to Fabulous Las Vegas” even when they’re talking to out-of-state insurance agents and adjusters.
If you have questions about Nevada Insurance Law, please contact Mike Mills at Mills & Associates who will be glad to give you a hand.
About Michael Mills
