NAPSLO Prepares for Record Attendance at Annual Conference

Leadership Says Surplus Lines Industry in Good Shape; Ready for Softer Market

As the National Association of Professional Surplus Lines Offices gathers in San Francisco this month (Sept. 14-18) for its annual national conference, Insurance Journal recently caught up with the outgoing President Richard Polizzi and his successor, Mac Wesson, to talk about the organization, the state of the surplus lines market, and more.

Insurance Journal: What has your year been like as president of NAPSLO?

Richard Polizzi: My year as president has been both very enjoyable and very busy. The obvious overriding issue the association had to be concerned with this past year was the ongoing discussion about state verses federal regulation. In addition, contingency commissions came under scrutiny with the investigations by Attorney General (Eliot) Spitzer.

These two issues demanded a response by NAPSLO and we stated our preference for federal standards, as outlined in the proposed State Modernization and Regulatory Transparency Act (SMART), as opposed to federal regulation, believing that a state-based system is preferable.

In addition, we issued a statement defending contingency commissions when they are profit-based and where the wholesaler is simply responding to a retailer’s request to find coverage acceptable to the producer’s customer. The customer’s decision to buy the offered coverage is not related to, and is independent of, any contingent arrangement the wholesaler may have with a carrier. Simply stated, the wholesaler is not part of the insurance-buying decision. That is solely between the retail producer and the insured.

IJ: How do you view the overall health of the surplus lines market?

Polizzi: The surplus lines industry is healthy and vibrant. It has performed its primary function in this recent hard market, taking up the slack in the marketplace when the standard, admitted carriers pull back or pull out of certain classes or territories. This industry has grown dramatically over the past 25 years and today writes approximately $35 billion in annual premiums, which represents about 13 percent of the total U. S. P/C premium volume.
IJ: What has your role of president taught you in your dealings in the industry?

Polizzi: I’ve spent seven years on the NAPSLO board and Executive Committee and after spending eleven months as president, I frankly feel I’m just now learning how to properly function in this position.

IJ: Talk a little bit about the upcoming conference in San Francisco and its importance.

Polizzi: The upcoming convention in San Francisco will be the largest in our history. Here we are a month away (August) and we already have over 3,200 registered members. That presents one of the problems this association has struggled with over the past several years. There are only a limited number of cities with hotel and meeting facilities that can accommodate a group as large and complex as NAPSLO.

Mac Wesson, the president-elect, has put together a great program for the convention and a major reason for the large attendance numbers.

IJ: What advice would you have for Mac (Wesson) as he takes over as president of NAPSLO?

Polizzi: What advice would I give Mac as he assumes the presidency? Get lots of rest between now and September 16th.!

IJ: Talk a little bit about the upcoming year as president and what you see as your goals, challenges you may face, etc.

Mac Wesson: NAPSLO has a great deal of momentum behind us right now, thanks in large part to the inspired leadership of Richard Polizzi and the outstanding work of our board of directors, committees, and especially our staff. One of my challenges, and goals, is to maintain that momentum.

This has been a very active year for NAPSLO. We have tackled a number of issues that have bubbled up in recent months and have tried to do so with our members’ best interests in mind. As you probably know we have retained the services of B&D Sagamore, a lobbyist firm in Washington D.C., to help us keep a finger on the pulse of federal legislative issues that could affect the surplus lines industry. We have responded to a variety of state specific legislative and regulatory issues that have put the well being of our industry at risk. And we have responded to questions about compensation to wholesalers, and the transparency thereof, created out of recent investigations of the insurance industry as a whole.

All the while we remain committed to offering educational opportunities to our members and coordinating our annual conventions and mid-year workshops.

We do a lot of good work for our members and for our industry. A great deal of it is behind the scenes. I think a lot of people know us more for our annual convention than for the advocacy work we do. We’re very proud of our convention, so that’s fine. But another of my goals is to more effectively communicate to our members that NAPSLO is working for them in ways they may not fully realize or appreciate. We want to stop short of pounding our chest, but I think it’s important that our membership knows that their association is active, engaged, and looking out for their best interests.

IJ: Talk a little bit about the surplus lines industry in general, and where do you see the surplus lines market going over the next year?

Wesson: As an industry we are in very good shape. We know our place and I am proud that the surplus lines industry stepped up in a time of greater need, meaning the most recent hard market, and did our job. Now that the market is experiencing a softening, our job is to respond to opportunities that remain in our sector, of which there are plenty, and to create new ones. To use a treadmill analogy, we have to run a little faster to stay where we want to be. But that’s okay. It keeps us in shape.

IJ: What do you foresee at the upcoming conference in San Francisco?

Wesson: This year’s annual convention is another record-setter. We have processed over 3,000 registrations and will probably see total registrations eclipse 3,200 by the time the convention begins. We have modified the structure a little bit this year. On Friday morning noted columnist and broadcast journalist George Will is scheduled to address the convention as our Derek Hughes/NAPSLO Educational Foundation Lecture Series speaker. I’m one of his biggest fans so I’m really looking forward to that. Then on Saturday morning we are having our first ever Legislative Breakfast and inviting all members to meet our new lead lobbyist, Maria Berthoud, and listen to her and our own executive director, Dick Bouhan, who is an expert on these matters in his own right, bring everyone up to speed on what’s happening on the legislative and regulatory front. The convention is shaping up to be the best ever.

Topics Legislation Excess Surplus Market Training Development