Eleven states that have formed a cooperative to streamline collection and allocation of surplus lines taxes are moving ahead with its organization.
Mississippi Insurance Commissioner of Insurance Mike Chaney has been chosen chairman of the governing committee of the newly formed Non-Admitted Insurance Multi-State Agreement (NIMA).
The group, comprised of 11 member states and one territory (Mississippi, Alaska, Connecticut, Florida, Hawaii, Louisiana, Nebraska, Nevada, Puerto Rico, South Dakota, Utah and Wyoming), was formed on June 15, 2001.
NIMA plans to provide its member states with uniform procedures for the collection and allocation of surplus lines premium taxes where a policy covers risk in more than one state.
The rules will allow states to report, collect, allocate and distribute surplus lines tax revenues among states consistent with the Non-admitted and Reinsurance Reform Act (NRRA). The NRRA is part of the Dodd-Frank Wall Street Reform legislation passed last year that allows only the home state of the insured to require premium tax payments for non-admitted insurance in the absence of an agreement among states. NIMA will allow participating states to continue to collect surplus lines premium taxes according to state laws consistent with the agreement.
The vice chairman of NIMA will be South Dakota’s Director of Insurance Merle Scheiber, while the Florida Insurance Commissioner Kevin McCarty will serve as secretary
States have been scrambling to comply with NRRA, which went into effect July 21. But they are not all in agreement on how to do so. While the NIMA organization represents one option, another group of states has signed onto the Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT) approach that is supported by the National Conference of Insurance Legislators and several industry groups. The NIMA approach is supported by the National Association of Insurance Commissioners.