NRS689.325. Prepaid contracts: Distributions to seller from trust fund; financial reports of trustee.

      1.  Not more than 75 percent of the earnings of such investments, including capital gains, as they accrue and are received, may be disbursed by the trustee to the seller or the designee of the seller. The remainder of any earnings must be held by the trustee to establish a reserve for securities valuation until the reserve equals 25 percent of the total trust liabilities.

      2.  The trustee shall maintain in the trust fund an amount of money equal to 125 percent of the total trust liabilities.

      3.  If money in the trust fund is invested or reinvested in:

      (a) Securities which are issued or guaranteed by the United States of America;

      (b) Bonds of this state or the bonds of any other state;

      (c) Bonds of counties or municipalities of any state;

      (d) Deposits in any bank, credit union or savings and loan association that is federally insured or insured by a private insurer approved pursuant to NRS 678.755; or

      (e) With the written approval of the Commissioner, any investment which would have guaranteed liquidity,

Ê then no earnings of those investments, including capital gains, if any, as such earnings accrue and are received, may be disbursed by the trustee to the seller or the designee of the seller which would reduce the corpus of the trust fund below 100 percent of the required value of the trust. Earnings in excess of 100 percent of the required value of the trust or 125 percent of the total trust liability, whichever is appropriate, may be distributed annually.

      4.  Earnings are defined as any sum remaining in the trust fund after deducting costs of administration over and above 100 percent of the required value of the trust.

      5.  Every trustee handling money in a trust fund pursuant to NRS 689.150 to 689.375, inclusive, shall file with the Commissioner, within 15 days after the first day of each calendar quarter, a financial statement showing the activity of all trusts required to be maintained by any seller and the total market value of each trust as of the first day of the calendar quarter. The statement must be on forms prescribed and adopted by the Commissioner. Every quarterly report must be accompanied by a fee of $10. If the statement is not received by the Commissioner as required, the Commissioner may, after giving the seller 10 days’ written notice, revoke the seller’s certificate of authority.

      6.  The trust must be valued quarterly and averaged annually to determine the total value of the trust. If the average market value as of December 31 of each year is below 100 percent of the required value of the trust or 125 percent of the total trust liability, the Commissioner may suspend the seller’s certificate of authority until the deficiency is made up.

      (Added to NRS by 1971, 1399; A 1987, 1267; 1999, 1551)