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Service Contract Provider

An entity that wishes to issue, sell or offer for sale a service contract in the state of Nevada must first obtain a certificate of registration, as provided in chapter 690C of the Nevada Revised Statutes ("NRS").

A provider is a business entity that is obligated to the purchaser, or holder, pursuant to the terms of a service contract.

A service contract is a contract in which a provider is obligated to a holder to repair, replace or perform maintenance, or indemnify or reimburse for such, on goods described in the contract because of a defect in materials, workmanship or normal wear and tear.

All questions related to service contract provider applications and renewals should be directed to ServiceContracts@doi.nv.gov, or 775-687-0763.

Certificate Required

A certificate of registration to act as a service contract provider must be obtained prior to offering, selling or issuing a service contract. This certificate is only available to business entities.

Form Approval

All documents used in the course of business must be approved by the Division prior to use. These documents must be submitted via the System for Electronic Rate and Form Filing (SERFF). Service charges may apply.

These documents include copies of each type of service contract proposed for issue or sale, including all documents that are part of the service contract and copies of all riders and endorsements. The fees for submission are available on the Filing Information page.

Exceptions

The following are not subject to the requirements for service contract providers:

  • Contracts in which a provider is obligated for a specified period to a holder to repair or replace any physical component of the manufactured home;
  • Contracts for motor club;
  • Contracts of Insurance issued by an insurer;
  • Warranties provided by a manufacturer, importer, or seller of goods that is not separate from the sale of goods;
  • Maintenance agreements that provide for limited, scheduled maintenance;
  • Service contracts regulated by the Public Utilities Commission of Nevada;
  • Service contracts sold or offered for sale to a person who is not a consumer;
  • Service contracts for goods if the purchase price of the goods is less than $250; or
  • Service contracts issued, sold or offered for sale by a vehicle dealer obligated to provide all services under the service contract.

Certificate Term

Each certificate is valid for two years after the date of issuance and must be renewed prior to expiration.

Name Restriction

The name of the provider may not contain words “insurance,” “casualty,” “surety,” “mutual” or any other word or term that implies that the provider is engaged in the business of insurance or is a surety company; however, the name may include the word “guaranty.” Likewise, a provider may not have a name that is deceptively similar to the name or description of an insurer or surety company or the name of another provider.

How to Apply

An executive officer of the provider must submit the completed application for a certificate of registration. Each application must be verified for accuracy by an executive officer of the provider or, if there is no executive officer, by a controlling officer. A controlling person is anyone who possesses the authority to set the policy and direct the management of the service contract business.
All supporting documentation must be submitted with the application. An applicant must upload documents for any application background question for which the answer is “Yes;”
The following must be submitted via Sircon:

  • The completed application for a certificate of registration;
  • Proof of financial security (see Financial Security below);
  • All applicable fees (see Fees below)
  • The name, address and phone number of each administrator with whom the provider intends to contract. An administrator is a person responsible for administering a service contract issued, sold or offered by the provider;
  • A notarized affidavit signed by the executive or controlling officer; and
  • The following information for each controlling person:
    • Whether there are any pending criminal actions against the person other than moving traffic violations;
    • Whether the person, in the last 10 years, has been:
      • Convicted of a felony or misdemeanor of which an essential element is fraud;
      • Insolvent or adjudged bankrupt;
      • Refused a license or registration as a service contract provider or had an existing license or registration as a service contract provider suspended or revoked by any state or governmental agency or authority; or
      • Fined by any state or governmental agency or authority in any matter regarding service contracts.   
       
     

Financial Security

A provider must supply proof of financial security upon application. Financial security must be maintained in one of the three formats below:

  • A contractual liability insurance policy (CLIP) that insures the obligations of the service contract provider. The policy must:
    • Be issued by an insurer authorized in this state; and
    • Prohibit the insurer from terminating the policy until a notice has been delivered to the Commissioner at least 60 days prior to termination. Any such termination does not release the insurer from responsibility for service contracts already issued.
     
  • A reserve account in this State and a deposit with the Commissioner.
    • The reserve account must amount to at least 40 percent of the unearned gross consideration received by the provider for any unexpired service contracts. This account must be kept separate from the operating accounts of the provider and must be identified as “(Provider’s Name) Nevada Service Contracts Funded Reserve Account.”
    • The provider must also deposit with the Commissioner security in the amount of $25,000 or 10 percent of the unearned gross consideration, whichever is greater. The security must be:
      • A surety bond issued by a surety company authorized in this State;
      • Securities of the type eligible for deposit pursuant to NRS 682B.030;
      • Cash. If the provider chooses to deposit cash, it must complete the Incoming Funds Deposit Notification form. Please contact ifn@doi.nv.gov for this form.
      • An irrevocable letter of credit issued by a financial institution approved by the Commissioner; or
      • In any other form prescribed by the Commissioner.    
       
     
  • A net worth or stockholders’ equity, or that of a parent company, of at least $100,000,000. At application and upon request, a provider shall provide to the Commissioner a copy of the most recent Form 10-K report or Form 20-F report filed by the provider or parent company with the Securities and Exchange Commission (SEC) within the previous year. If not required to file those reports with the SEC, the provider must submit copy of the most recently audited financial statements. If the net worth or stockholders’ equity of the parent company is used to confirm financial security, the parent company must guarantee to carry out the duties of the provider.

Fees

All fees paid to the Nevada Division of Insurance are nonrefundable. Fees for electronic submission of documents through Sircon and SERFF may apply.
Initial Application total: $4,600 

  • This fee consists of the $1,300 Administration and Enforcement fee (x2) and the $2,000 application fee. 

Biennial Renewal total: $4,600

  • This fee consists of the $1,300 Administration and Enforcement fee (x2) and the $2,000 application fee.

See the Filing Information page for SERFF filing fees.

How to Print your Certificate

Once the certificate has been issued or renewed, the information will be available on the Division’s website under Verify a License. First ensure that the registration has been approved, and then print your certificate through Sircon.
Firms may sign up for AgencyEDGE through Sircon. Service charges may apply.

How to Renew the Certificate

No later than 60 days prior to expiration, in addition to all applicable fees, an executive officer of the provider must submit a completed application for the renewal of registration. Each renewal application must be verified for accuracy by an executive officer of the provider or, if there is no executive officer, by a controlling officer. All supporting documentation must be submitted with the application. An applicant must upload documents for any application background question for which the answer is “Yes."
All forms and contracts must be submitted via SERFF. Please see the Filing Information page for more detail.
Note: These documents must not be used in the course of business until they have been approved by the Division.
The following must be submitted via Sircon:

  • The completed renewal application for a certificate of registration; A notarized affidavit signed by the executive or controlling officer; and
  • The following information for each controlling person, if not previously submitted or if changed from the previous year:
  • Whether the person, in the last 10 years, has been:
    • Convicted of a felony or misdemeanor of which an essential element is fraud;
    • Insolvent or adjudged bankrupt;
    • Refused a license or registration as a service contract provider or had an existing license or registration as a service contract provider suspended or revoked by any state or governmental agency or authority; or
    • Fined by any state or governmental agency or authority in any matter regarding service contracts; and
    • Whether there are any pending criminal actions against the person other than moving traffic violations.   
     

Failure to Timely Renew

There is no grace period for renewal. If a provider fails to timely renew, the certificate of registration will expire.

Additional Requirements

A provider must maintain records of all transactions under the certificate for at least 1 year after the expiration of the contract. Those records must include:

  • A copy of each type of service contract that the provider issues, sells or offers for sale;
  • The name and address of each holder who possesses a service contract under which the provider has a duty to perform, to the extent that the provider knows the name and address of each holder;
  • A list that includes each location where the provider issues, sells or offers for sale service contracts; and
  • The date and a description of each claim made by a holder under a service contract.

A provider who intends to cease doing business in this state must provide sufficient proof that all duties to the contract holders in this state have been fulfilled. Such a provider shall not destroy their records without the prior approval of the Commissioner. Within 30 days after cessation, the provider must notify the Division and each holder of an unexpired service contract, in writing, of the fact that the provider has ceased doing business in this state. This does not render a contract void, cancelled, or release the provider from any liability imposed by a violation of law.

Legal Authority

For additional information regarding service contracts and providers, please see chapter 690C of the Nevada Revised Statutes (NRS) and chapter 690C of the Nevada Administrative Code (NAC).