Nevada Division of Insurance – Required Stipulations and Disclosures

The Nevada Division of Insurance requires that Precisely discloses the following stipulations to each insurer client that may use the Wildfire Risk Model in their insurer’s rating plan in the state of Nevada.

1. If the insurer will be using the Precisely Wildfire Risk Model in their rating plan in the state of Nevada, the insurer will be required to provide appropriate and complete disclosure of the specific manner in which the Precisely Wildfire Risk Model is to be incorporated into the insurer’s rating plan. The insurer’s rating plan must be filed by the insurer in SERFF with such a disclosure and will be subject to prior approval by the Nevada Division of Insurance.
2. Precisely advises insurers that mitigation and resiliency categories are not considered within the Wildfire Risk Model. Validation of mitigation work may necessitate that onsite inspections be performed in order to gather additional information and understanding of the property’s wildfire vulnerability. Insurers need to rely on onsite inspection reports and other home-condition assessment techniques when information and understanding of the property’s wildfire vulnerability are incomplete. The Nevada Division of Insurance seeks to ensure that every consideration is given to fire-resistive materials and mitigation efforts that builders or insureds have applied or undertaken to protect their properties.
3. Insurers:
   1. need to inform insureds as to their Wildfire Risk Model RISK50 score and its potential rating impacts; and
   2. need to disclose to insureds their Wildfire Risk Model RISK50 score impacts and the information on which those impacts rely via a consumer notification/correction process; and
   3. will be required to validate the corrected information coming from the policyholder before revising the score; and
   4. will be advised to file a written description of their appeal/revision process, along with sample consumer notifications regarding the appeal process, with their rate filing, as well as any disclosure form; and
   5. should ensure that the communication/correction process is subject to some minimum requirements when managed by insurer to; (i) avoid generating more work for the Nevada Division of Insurance when dealing with consumer inquires and complaints that will arise in the absence of a thorough disclosure process; and (ii) to achieve consistency among insurers who choose to adopt such programs within their rating plans; and
   6. are prohibited from using the outputs of the Precisely Wildfire Risk Model as the sole reason to deny the issuance of any insurance policy in Nevada, or to cancel or non-renew any insurance policy in Nevada. Disallowing a risk from being written solely because of its location in a certain territory is prohibited in Nevada and would, indeed, be considered a form of redlining. A wildfire risk score methodology may not be used to disqualify a property from eligibility without consideration of individual risk mitigation being performed on the property.
4. Bulletin 24-002 https://doi.nv.gov/uploadedFiles/doinvgov/Content/News_Notices/Bulletins/24-002.pdf – states that “the Division is concerned that rejecting or not renewing risks solely based on certain location-based indices would constitute a prohibited form of imposed unavailability of Iinsurance in some areas of Nevada and would thus be unfairly discriminatory.”
5. No property may be declared ineligible for coverage solely because a wildfire risk score is within a certain range
6. Information about possible discounts that could be offered in conjunction with the use of the Precisely Wildfire Risk Model through Nevada Personal-Lines Insurance Wildfire Mitigation Incentive Program can be found at https://doi.nv.gov/uploadedFiles/doi.nv.gov/Content/Insurers/Property_and_Casualty/Wildfire_Mitigation_Incentive_Program.pdf