Nebraska's insurance law is Chapter 44 of the Nebraska Revised Statutes (Neb. Rev. Stat.). Rules are in Title 210 of the Nebraska Administrative Code (NAC). Nebraska declares insurance to be public in character, so everyone involved must act in good faith and avoid deceptive practices (44-101). General regulatory concepts are covered in the national Insurance Regulation guide. This guide covers Nebraska's own rules, with citations.

About the exam

Nebraska's licensing exams are given by PSI. The passing score is 70% on every exam.

• Combined exams are offered for both life/health and P&C. Each exam also carries 5 unscored pretest items.
• About 15% of the life and health exams covers insurance regulation.
• The exam tests the lines applied for, producer duties, and Nebraska insurance law (44-4052).
• After passing:
  • PSI uploads your results to the Department.
  • You apply through NIPR.
  • Application materials must be submitted within one year of passing.
• An applicant who fails or misses the exam must reapply and pay the fees again before rescheduling.
• Variable life and variable annuity applicants need a life license (held or applied for) and passing scores on FINRA Series 6 and 63, or 7 and 66. There's no separate Nebraska exam for that line.

The regulator

• Nebraska's regulator is the Director of Insurance, the chief administrative officer of the Department of Insurance (44-101.01). The Governor appoints the Director, subject to confirmation by the Legislature (81-102).
• The Director enforces Chapter 44 and adopts rules. The Department supervises insurers and the business of insurance, including companies still being organized.
• Insurer types (44-103):
  • domestic: formed in Nebraska
  • foreign: formed in another U.S. state
  • alien: formed in another country. An alien insurer must keep at least $200,000 in approved securities on deposit in a U.S. state (44-305).
• Certificate of authority. An insurer needs a certificate of authority to do business. It expires the last day of April each year and is renewed if the insurer complies (44-303).
• Market conduct. Insurers give examiners free access to their records and keep market conduct records five years (44-5905).

Producer licensing

Definitions (44-4049)

• Sell means exchanging a contract of insurance for money on behalf of an insurer.
• Solicit means attempting to sell, or urging a person to apply for a particular kind of insurance from a particular company.
• Negotiate means conferring with or advising a buyer about the substantive terms of a contract.
• The license itself gives no authority to bind an insurer.

Lines of authority (44-4054(1))

• Life includes annuities, and may include AD&D and disability income benefits.
• Accident and health or sickness may include disability income.
• Property covers direct or consequential loss.
• Casualty covers legal liability.
• Personal lines covers P&C sold to individuals and families for noncommercial purposes.
• Variable products are their own line.

Qualifications (44-4053)

• Age 18, and passing the exam for each line.
• Nebraska's age of majority is 19, but a licensed producer's minority ends when the license is issued.
• A business entity designates a licensed producer responsible for compliance.

Who doesn't need a license (44-4051). Salaried insurer employees who handle claims or clerical work without commission. Employers administering their own employee benefit programs. Nonresidents selling multistate commercial P&C who are licensed where the insured has its principal place of business.

License term (44-4054)

• An individual license expires on the last day of the birth month in each year the producer's age is divisible by two. That means a renewal every two years, in even-age years.
• You may renew in the 90 days before expiration, or within 30 days after with a late fee. A late renewal is treated as made on time.
• A lapsed license may be reinstated within 12 months without an exam by paying a reinstatement fee plus the renewal fee.
• Business entity licenses expire April 30 of each even-numbered year.
• The Director may waive renewal requirements, fines and exams for producers in military service or with other extenuating circumstances, such as long-term medical disability.

Moving

• Into Nebraska: apply within 90 days of establishing residence. No exam is needed for lines already held (44-4056).
• Out of Nebraska: report the move and send certification from the new home state within 30 days. No fee is needed (44-4055).
• Licensed elsewhere: an applicant previously licensed for the same lines in another state is exempt from the exam if still licensed there, or if applying within 90 days of that license's cancellation.

Nonresidents (44-4055, 44-4063)

• They're licensed on reciprocity.
• They meet CE by meeting their home state's requirement.
• A nonresident license is automatically revoked if the home-state license is revoked.

Temporary licenses (44-4058) last up to 180 days without an exam. They go to:

• a surviving spouse or personal representative of a producer who dies or becomes disabled
• the designee of a producer called to military duty

The Director may require a sponsor who takes responsibility for the temporary licensee. The Department also describes an apprentice license for residents. It lasts no more than 120 days and requires sponsorship by an active Nebraska producer.

Continuing education (44-3901 to 44-3907)

• Hours. 21 hours of line coursework plus 3 hours of ethics every two years. No licensee must complete more than 24 hours in total, however many lines are held.
• Active participation in an insurance association can earn up to 6 hours, but never toward ethics.
• No repeats or carryover. A course can't be repeated for credit within two years. Extra credits don't carry over to the next period.
• Exemptions:
  • licensees in a first license period that ends less than a year after licensing
  • producers selling only credit life and credit A&H, travel or self-storage insurance
• Extensions for good cause are capped at one year.
• Missing CE. The Director won't renew a license until CE is complete.
• Product training:
  • Annuities: a one-time 4-hour course (44-8108). Producers licensed on or after July 1, 2021 can't sell annuities until it's done.
  • Long-term care: 8 hours once, then 4 hours every 24 months.

Appointments and terminations (44-4061, 44-4062)

• A producer may not act as an insurer's agent unless appointed. A producer who isn't acting as an insurer's agent needn't be appointed.
• The insurer files the appointment within 15 days of the agency contract or the first application, and pays the appointment and renewal fees.
• Terminations:
  • The insurer notifies the Director within 30 days after the effective date, with or without cause.
  • The insurer sends the producer a copy within 15 days. For-cause copies go by certified mail or overnight delivery.
  • The producer may file written comments within 30 days.
• An insurer that accepts business from an unlicensed or unappointed producer commits an unfair trade practice (44-1525(12)).

Reporting and conduct

• "Administrative action" is broad. It includes civil actions, arbitration and mediation awards involving the producer.
• Assumed names must be reported to the Director before use (44-4057).
• Commissions go only to licensed persons. Renewal commissions may go to a person licensed at the time of sale (44-4060).
• Premium funds. Misappropriating or converting money received in the business is a ground for discipline. Converting premium money to your own use is a fraudulent insurance act (44-4059(1)(d), 44-6604(5)).
• Fees not stated in the policy may not be charged (44-354).

Discipline (44-4059)

• Grounds include:
  • false information on the application
  • forgery
  • using notes on the exam
  • knowingly accepting business from unlicensed persons
  • a felony or Class I–III misdemeanor conviction
  • failing to follow a child support order
  • failing to pay state income tax
• Fines run up to $1,000 per violation.
• A denied applicant may demand a hearing within 30 days. It's held within 30 days.
• No disciplinary proceeding may start more than three years after the license ended.
• An unlicensed person may be stopped by injunction (44-4050).

Rebating and controlled business

• Rebating (44-361). Both the producer who gives a rebate and the insured who accepts one violate the law. These aren't rebates:
  • Interest-free credit on life and liability premiums
  • Noncash gifts up to a reasonable amount set by the Director, offered without discrimination and without requiring a purchase
  • Value-added services related to the coverage
• Controlled business (44-361.01, 44-361.02):
  • A producer is presumed to have gotten a license mainly to rebate their own business when commissions on their own, relatives', employer's or employees' business exceed 10%.
  • Above 30% the presumption is conclusive. For crop insurance the thresholds are 30% and 50%.
  • It's a Class V misdemeanor.

Unfair trade practices (44-1521 to 44-1534)

• When an act is a violation (44-1524). A listed act is an unfair trade practice if done flagrantly in conscious disregard of the Act or often enough to show a general business practice.
• "Insurer" here includes agents, brokers, consultants and adjusters.
• The listed practices (44-1525) include:
  • misrepresentation, including intentionally misquoting a premium and twisting
  • false advertising in any medium, including the internet
  • defamation
  • boycott, coercion and intimidation
  • false financial statements
  • stock as an inducement
  • unfair discrimination, including by sex or marital status, age of home, geography or impairment, unless there's a non-pretextual business reason
  • false statements on an application to get a commission
• Complaint register. Insurers keep one covering everything since the last exam. A complaint is any written communication primarily expressing a grievance.
• Department inquiries. Insurers answer within 15 working days.
• Lenders can't require insurance through a particular insurer or agent, and may reject a policy only under reasonable, uniformly applied standards. A lender may force-place coverage if the borrower doesn't provide it (44-1526).
• Penalties (44-1529, 44-1532):
  • up to $1,000 per violation and $30,000 in total
  • $15,000 per violation and $150,000 in total if flagrant
  • violating a cease and desist order: up to $30,000 per violation and $150,000 in total
  • hearings are set at least 10 days after service

Claims practices (44-1536 to 44-1544; 210 NAC 60 and 61)

• A denial must be in writing and cite the policy provision relied on. The claimant must be told the Department may review it.
• Lowball offers that force a lawsuit are prohibited.
• Claims-practice penalties match the unfair trade practice penalties: $1,000/$30,000, or $15,000/$150,000 if flagrant.

Fraud

• Criminal fraud (28-631) is graded by amount:
  • Class III felony at $5,000 or more
  • Class IV felony from $1,500 to under $5,000
  • Class II misdemeanor under $500
• Civil penalties (44-6607) are $5,000, $10,000 and $15,000 for first, second and later violations. A civil action is brought instead of prosecution.
• The Department's Insurance Fraud Prevention Division investigates. Certified investigators have peace officer powers. The Attorney General prosecutes cases with legal merit.
• People who report suspected fraud without malice are immune from civil liability (44-6605).

Privacy (44-901 to 44-925)

• Privacy notices. An initial notice is due when the customer relationship begins. After that, at least once every 12 months. Former customers don't get annual notices.
• Opt-out methods may include a toll-free number.
• Health information authorizations last no longer than 24 months and may be revoked at any time.

Consultants, public adjusters and surplus lines

• Insurance consultants give advice for a fee and need a consultant license. Acting without one is a Class IV misdemeanor. To qualify:

  • three years of prior licensure, or a recognized program of study
  • a written agreement kept five years
  • no commission on insurance sold within the consulting subject

  A licensed agent's incidental advice paid only by commission isn't consulting.

• Nebraska licenses public adjusters, not independent adjusters. A public adjuster represents the insured for compensation. Requirements:

  • a $20,000 bond
  • 24 CE credits including 3 ethics
  • records kept five years
  • funds held in a non-interest-bearing escrow account

  A public adjuster may not solicit during a loss-producing event, or charge 10% or more of a catastrophe settlement.

• Surplus lines (44-5501 and following):

  • A surplus lines license requires a producer license.
  • Placement is allowed when coverage can't be procured from an admitted insurer.
  • The tax is 3% of premium, and no part of it may be rebated. Records are kept five years, and filings are made quarterly.
  • The policy must say it isn't covered by the guaranty association.
  • Exempt commercial purchasers may skip the diligent search if they request the placement in writing.

Guaranty associations

Common exam traps

• Nebraska's regulator is the Director of Insurance, appointed by the Governor.
• The vendor is PSI, and combined LAH and P&C exams exist.
• CE: 21 + 3 ethics = 24 hours, with no carryover.
• Licenses expire in the birth month of even-age years.
• Appointments are filed within 15 days. Termination reports are due within 30 days.
• Controlled business is presumed above 10% and conclusive above 30%.
• Nebraska licenses public adjusters only.