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Newsbriefs

THE NONADMITTED INSURANCE AND REINSURANCE REFORM ACT OF 2007 (HR 1065)

The bill would establish national standards for how states regulate the surplus lines market and reinsurance.

HR 1065 creates:


  • a uniform system of premium tax allocation and remittance for surplus lines premium taxes;

  • uniform national standards for surplus lines insurer eligibility;

  • one-state compliance on multi-state surplus lines risks;

  • direct access to the surplus lines market for sophisticated commercial purchasers;

  • more efficiency in licensing surplus lines brokers through use of a national data base, and;

  • authority for states to enter into a compact or create procedures to allocate surplus lines premium tax among themselves.

The bill also contains reinsurance provisions which charge the ceding insurer's home state regulator with making the so-called "credit for reinsurance" determinations. It also would prohibit state insurance regulators from applying their laws to reinsurance agreements of ceding insurers domiciled in other states.

U.S. P/C INSURERS PAY $2.1 BILLION IN CAT LOSSES

U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $2.175 billion for second-quarter property losses resulting from a total of six catastrophes in 25 states -- tying the record for the second-lowest number of catastrophes in a second quarter in the past 10 years, according to preliminary analysis by ISO's Property Claim Services (PCS) unit.

PCS estimates the six catastrophes of second-quarter 2007 generated 504,000 claims. Year to date, the estimated number of claims is 709,000.

At $435 million, Texas topped the list of the five most severely affected states, followed by Minnesota at $322 million, Kansas at $210 million, New Jersey at $160 million, and New York at $130 million.

The costliest event of the quarter -- caused by strong winds, large hail, tornadoes, and flooding -- occurred in mid-April and affected 18 states and the District of Columbia. The current PCS estimate of insured property damage for this event is $1.225 billion.

ISO's PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and insurers. PCS estimates represent anticipated insured loss and exclude loss adjustment expenses.