689.185 - Certificate of authority: Surety bond.
689.185 Certificate of authority: Surety bond.
1. Except as otherwise provided in subsection 2:
(a) Before the issuance of a certificate of authority, the seller shall post with the Commissioner and thereafter maintain in force a bond in the principal sum of $50,000 issued by an authorized corporate surety in favor of the State of Nevada, or a deposit of cash or negotiable securities or a combination of cash and negotiable securities. If a deposit is made in lieu of a bond, the deposit must at all times have a market value of not less than the amount of the bond required by the Commissioner.
(b) The bond or deposit must be held for the benefit of buyers of prepaid contracts, and other persons as their interests may appear, who may be damaged by misuse or diversion of money by the seller or the agents of the seller, or to satisfy any judgments against the seller for failure to perform a prepaid contract. The aggregate liability of the surety for all breaches of the conditions of the bond must not exceed the sum of the bond. The surety on the bond has the right to cancel the bond upon giving 30 days’ notice to the Commissioner and thereafter is relieved of liability for any breach of condition occurring after the effective date of the cancellation.
(c) The Commissioner shall release the bond or deposit after the seller has ceased doing business as such and the Commissioner is satisfied of the nonexistence of any obligation or liability of the seller for which the bond or deposit was held.
2. The Commissioner may waive the requirements of subsection 1 if the seller agrees:
(a) To offer for sale only prepaid contracts that are payable solely from the proceeds of a policy of life insurance; and
(b) Not to collect any money from the purchaser of a prepaid contract.
(Added to NRS by 1971, 1395; A 1987, 1262; 2007, 3323)