Surplus Lines Legislation

RIMS supports the passage of the “Non-Admitted and Reinsurance Reform Act”, which has been reintroduced in the House by Rep. Dennis Moore (D-KS).  The Senate version (S.1363) has been introduced by Sen. Evan Bayh (D-IN), Sen. Bill Nelson (D-FL), and Sen. Mike Crapo (R-ID). 

 Legislative Outlook:

The House version of this legislation passed unanimously on September 9, 2009.  However, no action has yet been taken in the Senate. 

 

• prohibit any state other than the home state of an insured from requiring a premium tax payment for non-admitted insurance;
• authorize states to establish procedures to allocate among themselves the premium taxes paid to an insured's home state;
• permit states to require surplus lines brokers and certain insureds to file annual tax-allocation reports detailing the portion of non-admitted insurance premiums attributable to properties, risk, or exposures located in each state;
• subject non-admitted insurance solely to the regulatory requirements of the insured's home state
• declare that only an insured's home state may require a surplus lines broker to be licensed to conduct non-admitted insurance business with respect to an insured;
• prohibit a state from collecting fees relating to licensure of a surplus lines broker unless it has a regulatory mechanism for participating in the national insurance producer database of the National Associate of Insurance Commissioners (nAIC
• prohibit a state from denying credit for reinsurance if the state of domicile of an insurer purchasing reinsurance (ceding insurer) recognizes credit for reinsurance for the insured's ceded risk
• reserve to the state of domicile of a reinsurer sole responsibility for regulating the reinsurer's financial solvency, if the state is NAIC-accredited or has financial solvency requirements substantially similar to the NAIC
• prohibit a non-domiciliary state from requiring a reinsurer to provide financial information other than that required to be filed with its NAIC-compliant domiciliary state