1. Except as otherwise provided for domestic mutual insurers in NRS 692B.200, an insurer shall not retain any risk on any one subject of insurance, whether located or to be performed in this state or elsewhere, in an amount exceeding 10 percent of its surplus to policyholders.

2. A “subject of insurance” for the purposes of this section, as to insurance against fire and hazard other than windstorm, earthquake and other catastrophic hazards, includes all properties insured by the same insurer which are customarily considered by underwriters to be subject to loss or damage from the same fire or the same occurrence of any other hazard insured against.

3. Reinsurance ceded as authorized by NRS 681A.110 must be deducted in determining the risk retained, except that as to surety risks, reinsurance must be allowed as a deduction only if the reinsurance is with an insurer authorized to transact that insurance in this state, and is in such form as to enable the obligee or beneficiary to maintain an action thereon against the reinsured jointly with the reinsurer, and upon recovering judgment against the reinsured, to have recovery against the reinsurer for payment to the extent to which it may be liable under the reinsurance and in discharge thereof. As to surety risks, deduction must also be made of the amount assumed by any authorized cosurety and the value of any security deposited, pledged or held subject to the surety’s consent and for the surety’s protection.

4. As to alien insurers, this section relates only to risks and surplus to policyholders of the insurer’s branch in the United States.

5. “Surplus to policyholders” for the purposes of this section, in addition to the insurer’s capital and surplus, includes any voluntary reserves which are not required pursuant to law, and must be determined from the last sworn statement of the insurer on file with the Commissioner, or by the last report of examination of the insurer, whichever is the more recent at time of assumption of risk.

6. This section does not apply to life or health insurance, annuities, title insurance, insurance of wet marine and transportation risks, workers’ compensation insurance, financial guaranty insurance, or to any policy or type of coverage as to which the maximum possible loss to the insurer is not readily ascertainable on issuance of the policy.

(Added to NRS by 1971, 1605; A 1977, 620; 1993, 2385; 1995, 1767)