Legislation aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance has been introduced in the U.S. Senate.
The Nonadmitted and Reinsurance Reform Act (NRRA) of 2009, or S 1363, would create a uniform regulatory system, while preserving the role of the state regulator, supporters say. The bill was introduced by Senators Evan Bayh, D-Ind. and Sen. Mel Martinez, R-Fla., and cosponsored by Senators Bill Nelson, D-Fla., and Mike Crapo, R-Idaho.
“This bill would help consumers by making property/liability insurance more readily available and improving the efficiency of the surplus lines insurance market,” said National Association of Professional Surplus Lines Offices’ President John Wood.
In May, Representatives Dennis Moore, D-Kan., and Scott Garrett, R-N.J., introduced the same legislation (HR 2571) in the House of Representatives.
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 it took no action prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress.
According to NAPSLO, HR 2571 will be passed under suspension in the House in early July.
“This bill would simplify the tax remittance and compliance responsibilities surplus lines brokers must discharge and bring efficiency and cost reduction of regulatory compliance in placements with multi-state exposures,” said Richard Bouhan, executive director of NAPSLO. “Such reform would benefit not only the brokers and underwriters who provide surplus lines insurance but also consumers who ultimately pay the price for the inefficiencies.”
NAPSLO officials said they are hoping to see action take place soon on the surplus line reforms and believe there will be wide support for the legislation, noting that NAPSLO and other industry organizations have worked together in advocating enactment of this type of legislation.
“With the introduction of the bill in both the House and Senate, and wide support from the industry, we believe that this bill will be approved and signed into law,” said Maria Berthoud, partner, B&D Consulting, who lobbies for NAPSLO. “Financial services reform is currently front and center in Washington which gives us an excellent opportunity to have this bill included and passed in any larger reform measure.”
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