Car Insurance Provider Plans to Sue for Right to Sell Policies in Nev.

Gavel on top of American flag

The Alliance of Nonprofits for Insurance (ANI) continues its contentious battle with Nevada Insurance Commissioner Brett Barratt over its selling of “first dollar” auto insurance coverage — policies that may pay up to the full coverage amounts without requiring payment of a deductible — in the state.

While ANI had been issuing policies in the state for almost 10 years, it wasn’t until this year that the Nevada Department of Motor Vehicles refused to register vehicles that were insured through the “risk retention” group because it was not listed as authorized to sell first-dollar policies.

Barratt’s office has ordered that ANI can, however, sell such policies through “a fronting arrangement with a certified Nevada insurer,” according to Insurance News Net.

The Las Vegas Sun reports that ANI is opposed to using a fronting arrangement because it would then be charged money for the ability to sell coverage in the state.

Nevada’s deputy commissioner, Michael Lynch, says the department is merely abiding by existing laws.

“What had happened in 2009 and 2010 is the Department of Motor Vehicles had obtained a new method of auditing their insurance providers, and through that new method they caught ANI as an unauthorized insurance provider,” Lynch told Business Insurance.

One issue in the case is risk retention groups’ ability to write such policies in the state, considering that the groups are unable to participate in the Nevada Guaranty Association and therefore do not have the policies they write backed by the fund in the case of an insolvency.

ANI asserts that the department was aware of its practice of writing auto policies in the state.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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