Legislation aimed at making access to the surplus lines market more efficient and help standardize state insurance regulation has been introduced again in the U.S. House of Representatives.
Reps. Dennis Moore, D-Kan., and Scott Garrett, R-N.J., members of the House Committee on Financial Services, reintroduced the Non-Admitted and Reinsurance Reform Act of 2009 (NRRA), or HR 2571, yesterday. The measure has 20 other cosponsors.
Senators Evan Bayh, D-Ind., and Mel Martinez, R-Fla., members of the Senate Committee on Banking, Housing and Urban Affairs, have also announced that they plan on introducing a version of the bill in the Senate.
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.
The insurance industry appears unanimous in its support of the bill.
The National Association of Professional Surplus Lines Offices Ltd. (NAPSLO), the Independent Insurance Agents & Brokers of America (Big “I”), and the Property Casualty Insurers Association of America, issued statements in support of the legislation, which has passed the House of Representatives in previous Congresses including last year with support from both Democrats and Republicans. The Senate took up similar legislation in 2007 but took no action last session, which required that the bill be reintroduced in the 111th Congress in order to be considered again this year.
“We believe that this legislation will bring efficiency and reduce the cost of regulatory compliance in surplus lines placements with multi-state exposures,” said NAPSLO Executive Director Richard Bouhan. “Consumers will benefit because the costs related to the inefficiencies and redundancies, which they bear, will be eliminated.”
Independent insurance agents and the property/casualty insurance carriers with which they do business have long supported the legislation as well.
“The surplus lines bill (or NRRA) is an excellent example of a pragmatic approach to help bring needed targeted reform to the state insurance regulatory system,” said Charles E. Symington Jr., Big “I” senior vice president for government affairs.
The would reduce overlapping, multiple-state regulation of both reinsurer financial conditions and credit-for-reinsurance on the balance sheets of ceding insurers.
“This legislation is a vital step toward reforming and streamlining our current insurance regulatory system,” said David A. Sampson, PCI’s president and CEO. “This bill, if enacted, will create greater legal and regulatory certainty for surplus lines consumers, which will benefit insurers, businesses and the economy.”
Source: NAPSLO, Big “I”, PCI
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