A Nevada state law that was recently signed by the Governor could have significant implications on the state’s commercial insurance markets. Nevada recently enacted a new insurance policy limitation that bars defense costs from being included within the limits of a policy. Some carriers are therefore reading it essentially as an unlimited right to defense costs and debating withdrawal from significant components of the state’s market. The bill has been signed into law with a required effective date of October 1.
This issue quickly escalated to a top priority for The Council. We partnered with the Wholesale & Specialty Insurance Association (“WSIA”) to pressure the Nevada Insurance Commissioner Scott J. Kipper to clarify — in no uncertain terms — that the act does not apply to the non-admitted market and non-admitted carriers. Our communications with the Commissioner and the Nevada Department of Insurance have been productive and we believe they’re working in good faith to minimize market disruptions. We anticipate guidance from the Department in the coming days.