Ohio Gov. John R. Kasich has signed legislation continuing Ohio’s involvement in the surplus lines insurance market, the governor’s office announced.
House Bill 122 permits the director of the Ohio Department of Insurance to join a compact if deemed advantageous to the state and harmonizes Ohio insurance law with federal requirements imposed through the Non-Admitted and Reinsurance Reform Act (NRRA), a provision included in the Dodd-Frank legislative package passed by Congress in 2009.
State regulators and legislators have to figure out how to implement NRRA’s provisions by July 21, 2011.
Each year Ohio collects approximately $27 million from surplus lines premium taxes. Under the NRRA, only the home state of insured may require premium tax payment. The NRRA requires states to enter into either a compact or multi-state agreement in order to continue collection of surplus lines premium taxes on multi-state risks.
The surplus lines insurance market exists to ensure that hard-to-find coverage not available in the regular insurance marketplace can still be obtained. Unlike licensed insurance, the rates and forms used by surplus lines insurers are not directly regulated by the state unless Ohio is the home state of the insured.
Source: Ohio Governor’s Office
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