The 9th U.S. Circuit Court of Appeals has ruled that Nevada’s countersignature statute violates two clauses of the United States Constitution. The unanimous decision striking down the statute affirms an earlier U.S. District Court ruling in a lawsuit brought against Insurance Commissioner Alice Molasky-Arman.  Once common throughout the United States, countersignature laws typically allow a resident agent to collect portions of the commissions negotiated by nonresident agents whom the resident agent has agreed to sponsor as a countersignatory.

The department still may seek to appeal the decision to the U.S. Supreme Court within the next 90 days. A Molasky-Arman spokeswoman said the department is still reviewing whether an appeal would be filed.

Nevada is one of just two U.S. jurisdictions where countersignature requirements remain in effect, along with the Virgin Islands, which currently is appealing a U.S. District Court ruling striking down its own law. Federal courts also have struck down laws in Florida, South Dakota and Puerto Rico, while the West Virginia Legislature moved in April 2004 to repeal its own countersignature law.

Federal Appeals Court Strikes Down Nevada Countersignature Law (BestWire 4/11/08)

April 15, 2008