Two members of the U.S. House of Representatives’ Committee on Financial Services have announced plans they will introduce legislation that will create national standards for how states regulate the surplus lines market and reinsurance as well as a uniform system of surplus lines premium tax allocation and remittance.
The Non-Admitted and Reinsurance Reform Act of 2009, to be introduced by Rep. Scott Garrett (R-NJ) and Rep. Dennis Moore (D-Kan.), will be introduced in the U.S. House of Representatives and both legislators stated they hoped the Senate would follow suit.
“We believe that the bill would make the surplus lines marketplace more efficient by facilitating the payment of surplus lines premium taxes and eliminating unnecessary duplicative compliance requirements on surplus lines multi-state risks,” said John Wood, president of the National Association of Professional Surplus Lines Offices Ltd. “NAPSLO is pleased to see Rep. Garrett and Rep. Moore take the lead to have the bill introduced in the House of Representative and we are hopeful the bill will soon be introduced in the Senate.”
NAPSLO, a national trade association representing the surplus lines insurance industry, has been a supporter of the NRRA legislation since the beginning.
“We believe that once this legislation is enacted it will help provide needed uniformity and consistency in insurance regulation at the state level,” said NAPSLO Executive Director Richard Bouhan. “The problems with financial regulation uncovered last fall were not at the state level and this bill will only improve state regulation of insurance.”
The Non-Admitted and Reinsurance Reform Act is, in part, aimed at making access to the surplus lines market more efficient for consumers and the brokers and agents who assist them. In addition the bill could help standardize state regulations facing the industry.
The bill would establish national standards for how states regulate the surplus lines market and reinsurance and would create a uniform system of surplus lines premium tax allocation and remittance, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated commercial purchasers. These are concepts long endorsed by NAPSLO and promoted with members of Congress during meetings over the past few years.
The House passed similar versions of the bill in the last two sessions of Congress and the Senate took up a similar bill in 2007 but no action was taken in the Senate prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress in order to be considered.
“We have been meeting with members of the House and Senate and hope the bill will be introduced in the Senate and that both houses will pass the bill,” said NAPSLO’s Washington D.C. representative, Maria Berthoud of B&D Consulting.
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