NAC683A.716. Self-dealing; disclosures concerning compensation and certain quotes.

A broker who represents a client in an insurance transaction:

     1. Shall not unreasonably place his or her own interest above the interest of the client.

     2. Shall, before or simultaneously with a client’s purchase of insurance, or the consummation of any other insurance transaction that would entitle the broker to compensation as a result of his or her representation of the client, disclose to the client:

     (a) That the broker may receive compensation in some form from an insurer or other source as a result of his or her representation of the client in the transaction.

     (b) The name and identity of the source of the compensation and whether the broker has any ownership interest in, or is under common control with, the person providing the compensation.

     (c) That the compensation received by the broker may differ depending upon the product and insurer.

     (d) The identity of any other person that the broker knows, or reasonably ought to know, will receive compensation from the insurer for assisting the broker in the insurance transaction. As used in this paragraph, “person” does not include an intermediary, managing general agent or wholesale broker acting in the normal course of production.

Ê These disclosures must be followed by a documented acknowledgment by the client and the broker that clearly indicates the client’s understanding of the contents of the disclosure statement before or simultaneously with the consummation of the insurance transaction. In the case of a transaction consummated over the telephone or by electronic means, the client’s understanding of the disclosure must be documented by the broker at the time of the transaction and followed by a documented acknowledgment by the client and the broker.

     3. Shall, before a client’s purchase of insurance, disclose to the client the name of each insurer or other person that supplied the broker with a quote that would reasonably meet the client’s needs.

     (Added to NAC by Comm’r of Insurance by R009-05, eff. 10-31-2005)—(Substituted in revision for NAC 686A.368)