California Suit Questions Tax Payments

A lawsuit has been filed in the Superior Court of California in Los Angeles against the state Board of Equalization, Lexington Insurance Company and 500 unnamed firms regarding the nonpayment an annual tax traditionally imposed on admitted insurers.

In the case, Stephen F. Silvers and Steven J. Gold vs. State Board of Equalization, Ramon J. Hirsig, Lexington Insurance Company, and Does 1 through 500, the plaintiffs seek a judgment that Lexington and the other nonadmitted insurers included on California's List of Eligible Surplus Line Insurers are obligated to pay an annual tax that is imposed upon insurers doing business in the state.

The State Board of Equalization in California is responsible for assessing certain taxes against insurers doing business in California. In the court filing the plaintiffs allege that Lexington has owes more than $88 million in Section 28 taxes for the period 2003-2007.

A surplus lines tax applies to all surplus lines transactions and as a result surplus lines insurers have not had to pay the annual tax in question. The suit would require nonadmitted insurers to also pay the Section 28 tax, notwithstanding the fact that a surplus lines tax has already been paid.

NAPSLO visits Capitol Hill to promote S. 929

More than 20 NAPSLO representatives visited with members of the Senate Committee on Banking, Housing and Urban Affairs Tuesday regarding surplus lines issues and urged members to approve S. 929 (the Nonadmitted and Reinsurance Reform Act of 2007) and forward it to the full Senate.

The visits were part of NAPSLO’s annual “Day on the Hill” and members representing NAPSLO brokers and insurers met with Senators or staff from virtually all members of the Senate Banking Committee regarding surplus lines issues.

“Our meetings were very beneficial to NAPSLO and the Senators in reviewing current issues and we are hopeful that the discussions will lead to the approval of S. 929,” said NAPSLO Executive Director Richard Bouhan. “Passage of the bill would lead to improving the operation, efficiency, and regulation of the surplus lines market and also benefit consumers by making property/liability insurance more readily available and reduce the cost of compliance.”

Senators Mel Martinez (R-FL) and Bill Nelson (D-FL) introduced S. 929, the Nonadmitted and Reinsurance Act of 2007 in March 2007 and the bill was assigned to the Banking Committee. S. 929 is cosponsored by Sen. Mike Crapo (R-ID) of the Banking Committee and Sen. David Vitter (R-LA). The House of Representatives passed a similar bill (H.R. 1065) in 2007.

“Based on our discussions, we are hopeful that the Senate will hold hearings on surplus lines regulatory reform in the very near future,” said Mr. Bouhan.

The Nonadmitted and Reinsurance Act measure is aimed specifically at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform system, while preserving the role of the state regulator.

NAPSLO Job Portal Opens

NAPSLO is offering a new tool to help NAPSLO member firms with employee recruitment with the opening of the Jobs Portal website at jobs.napslo.org.

At the new job listing site NAPSLO members can post jobs, review applications of job seekers, and review applications. Job seekers can review openings, post their resume, and apply for jobs. There is no currently no charge to use the system, although NAPSLO will review this later this year.

NAPSLO members wanting to post a job, should go to job.napslo.org and sign up as a user. If the job title you want to post isn't listed, or you have questions on how the site works, please contact Mike Ardis at NAPSLO.

Previously NAPSLO only offered a website area where members could list their firm's name, web site and a human resources contact. NAPSLO will continue to host this page and will enable firms without current job openings to remain in front of job seekers.

NAPSLO list links to both the Job Portal and the Career Information Site on the job locator page in the Career section of the website. NAPSLO is continuing to work on the Career site - careers.napslo.org - to provide career information about the surplus lines industry and to be a site for college students and young professionals to go to look for jobs.