Dispute between ANI and Nevada’s Commissioner Heats Up

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29The Alliance of Non-profits for Insurance (ANI) plans to sue Nevada’s Insurance Commissioner, Brett Barratt for ordering the company to stop sale of ‘first dollar’ insurance to ANI.  The disputing parties are the ANI and the Nevada Division of Insurance.  It was an upsetting incident for Alliance of Non-profits for Insurance, when the state department rejected registration applications of the vehicles that were insured by ANI.  The insurance company also insisted that ANI could get ‘first dollar’ auto insurance policies if it had a ‘fronting company’ that was authorized.  While regular insurance companies can sell these policies, “captive” insurance companies and ‘risk retention groups’ such as ANI can serve the niche markets.

Since the year 2001, ANI had been involved in the sale of auto liability insurance in Nevada.  While the minimum coverage requirement by the state was $30,000 per accident for bodily injuries sustained and $15,000 per individual and $10,000 for damage to property, ANI could continue to sell insurance exceeding the minimum required by the state.  The list of approved first dollar insurance companies did not have ANI enlisted this year by the Insurance Division.  An electronic registration system for vehicles has been launched this year by DMV and there it was found that ANI was not listed.

While Barratt had feigned lack of knowledge of ANI’s selling of first dollar insurance, he stated that “risk retention groups” such as ANI cannot sell first dollar insurance policies in Nevada due to the legal issues and regulations in the state.  Since ANI is a body of Non-Profit Alliance groups that has been registered with the state of Nevada, it is not authorized to sell first dollar insurance.

ANI’s financial feasibility or abilities to settle claims are the least of the worries stated Barratt, other companies such as ANI (risk retention groups) are not in a position to participate in the Nevada Insurance Guaranty Association which would in case of failure by a NIGA insurer, cover not only the claims but also collect assessments from other member insurance firms.

The authorization to write first-dollar automobile liability insurance lies with the insurers and companies that hold a Nevada authorization and subject to NIGA, wherein NIGA settles claims via its statutory authorities.  In case the consumers have claims that have become insolvent with an insurer that is subject to NIGA, the claims are settled by NIGA.

The lawsuit filed by ANI has challenged Barratt with regard to the conflicting situations and clarifications with respect to these laws and the suggestions with regard to having a fronting company.