Thursday, December 14, 2006

Nevada Revises Surplus Lines Regulations

The Nevada Department of Insurance recently updated the regulations involving surplus lines premium tax rate, when affidavits must be filed and when annual surveys of transactions must be completed.

Effective December 7, the changes:
  • Require brokers file an affidavit and report of coverage with the Nevada Surplus Lines Association upon "extension of coverage" of a contract of insurance.
  • Adjusts the fee paid to the stamping office to 0.4 percent of the amount subject to the fee.
  • No longer require the stamping office to perform an annual survey of surplus lines insurance transactions involving major risks. The survey now only must be performed if requested by the Commissioner.
Additional information is available using the Legislative Tracker page of the NAPSLO website.

Wednesday, November 22, 2006

Mid-Year Registration Material Available

Registration forms and the brochure for the 2007 Mid-Year Educational Workshop, March 1-3 at the Renaissance Esmeralda Resort in Indian Wells, California, may be download from the NAPSLO web site by going to the Registration page on the NAPSLO web site.

Member ID and password are required to access the materials. The registration materials are in Adobe Acrobat format and Adobe Acrobat Reader is required to view the documents.

Completed materials must include the firm's Member ID or Login ID in order to be processed. All correspondence will be sent to the firm's address on file. The registration deadline is December 27.

Monday, October 16, 2006

Missouri clarifies surplus lines tax issue

The Missouri Department of Insurance recently clarified its view that surplus lines taxes apply to policy fees as well as premium taxes.

The change appears in Missouri's Reguation, section 20 CSR 200-6.300 Surplus Lines Insurance Fees and Taxes.

The department’s explanation of the amendments to sections (1), (2) and (3) of this rule is as follows:

"This amendment clarifies that any fee charged in connection with the placement of surplus lines insurance is subject to the surplus lines insurance premium tax, regardless of whether the fee is charged by the surplus lines insurer or the surplus lines licensee. As such the amendment is consistent with current practice of the department and is intended to halt the avoidance of tax by merely shifting the stated source of fees from the insurer to the licensee."

Monday, October 09, 2006

California Approves Changes to Insurance Law

California recently signed into law a bill making numerous changes in the law regulating insurance, including a small change to surplus lines.

The change for the surplus lines industry is a requirement requiring surplus lines brokers who make late monthly payments of premium taxes to pay interest. Under the law, surplus lines brokers granted an extension of the time in which to remit the 3% payment must pay a fee of 1% per month, or fraction thereof.

Also, the bill would revise provisions relating to cancellation and reinstatement of financed insurance, codify current policy of the Department of Insurance regarding agents of nonresident licensees, as specified, modify insurer liquidation procedure, and change the definition of "commercially domiciled insurer" for purposes of regulating insurance holding companies. There are also provisions allowing the merger of foreign and domestic mutual holding companies.

The bill also makes numerous changes to the State Compensation Insurance Fund The bill revises provisions relating to the authority of the Insurance Commissioner to revoke or suspend the State Compensation Insurance Fund's authority to transact workers' compensation insurance.

Additional information on the bill can be found through the NAPSLO Legislation Bill Tracking Service.

Friday, October 06, 2006

Steven R. Gross named to NAPSLO Board

Steven R. Gross, Chairman and Chief Executive Officer of Metro Insurance Services, Inc. located in Springfield, NJ, has been appointed to the NAPSLO Board of Directors.

President William Newton appointed Mr. Gross to fill the remaining year of a term on the Board. He will serve as Co-chair of the Communications & Technology Committee. Previously he had served as a member of the Mid-Year Educational Workshop Committee.

Metro Insurance Services was formed in 1983 and prior to forming Metro, Mr. Gross was employed as a claims adjuster at Continental Insurance Companies and a producer for United General Agency.

He has a bachelor’s degree from Fairleigh Dickinson University. He serves as President of the New Jersey Surplus Lines Association as well as on the Advisory board of Valley National Bank.

Thursday, October 05, 2006

NAPSLO objects to Massachusetts Wind Storm Fund Bill including surplus lines carriers

NAPSLO has notified the Massachusetts Senate Committee on Ways and Means that it is objecting to the proposed Massachusetts Windstorm Catastrophe Fund legislation (SB2179) currently under review that would include surplus lines carriers in emergency assessments.

The act applies to policies issued by an "authorized insurer" and NAPSLO wrote the committee that since surplus lines company are not an "authorized insurer," a policy issued by a surplus lines insurer would not be protected by the reimbursement provisions of the act.

NAPSLO added that despite the fact that surplus lines insurers would receive no benefit from the act, the insurance commissioner could include surplus lines insurers in an emergency assessment on direct written premiums for all property and casualty lines of business.

NAPSLO also said that Surplus lines companies have been traditionally unregulated to fulfill their purpose as an insurance "safety valve" and to impose an assessment establishes a dangerous precedent. In addition, under the proposed act it is unclear who is subject to the assessment - the insured, the broker or the company. It is also unclear what happens if the assessment is not paid.

The bill has been referred to the Senate Committee on Ethics and Rules and NAPSLO is hopes to have a response to the objections.

Tuesday, October 03, 2006

Louisiana Extends Emergency Rule 23

The Louisiana Department of Insurance has given notice that it has promulgated a second extension of Emergency Rule 23 to regulate all insurance matters between insureds and insurers affected by Hurricane Katrina or its aftermath, or Hurricane Rita or its aftermath.

The second extension of Emergency Rule 23 is applicable statewide to any insured who had a personal residential, commercial residential or commercial property insurance policy covering a dwelling, residential property or commercial property located in Louisiana if said policy of insurance was in effect as of 12:01 a.m. on August 26, 2005 with regard to a claim filed as a result of any damage caused by Hurricane Katrina or its aftermath, or if said policy of insurance was in effect as of 12:01 a.m. on September 20, 2005 with regard to a claim filed as a result of any damage caused by Hurricane Rita or its aftermath.

A copy of the second extension of Emergency Rule 23 may be obtained from the Department of Insurance by contacting Warren Byrd, Executive Counsel, in writing c/o the Louisiana Department of Insurance, 1702 N. Third Street, Baton Rouge, LA 70802, or by telephone at (225) 219-7841, or by electronic mail at wbyrd@ldi.state.la.us.

Additional information is available through NetScan, NAPSLO's legislative tracking service.

Thursday, September 28, 2006

NAPSLO Applauds Passage of Surplus Lines Bill

NAPSLO applauded Wednesday’s passage of the Non-Admitted and Reinsurance Reform Act of 2006 (H.R. 5637) by the U.S. House of Representatives and expressed optimism that a Senate sponsor of the bill will be found and that the Senate will consider the bill.

“This is an important milestone toward ultimately improving the operation and regulation of the surplus lines market,” said NAPSLO President William Newton. “And a step that NAPSLO has been working on for several years with members of Congress. We are pleased to see that many of the critical items that NAPSLO first raised in meetings with House members and staff were part of the final bill approved by the House.”

The legislation is in part aimed at making access to the surplus lines market more efficient for consumers and the brokers and agents who assist them.

“Insurance consumers are indebted to Reps. Ginny Brown-Waite (FL) and Dennis Moore (KS) who introduced the bill in June,” said NAPSLO Executive Director Richard Bouhan. “If enacted into law, this legislation will help ease the insurance crisis in states still suffering from the impact of natural disasters.”

H.R. 5637 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 two years.

H.R. 5637 was approved Wednesday evening by a vote of 417-0. The bill has not been introduced in the Senate and NAPSLO and its Washington, D.C. representative, Maria Berthoud of B&D Consulting, is working on securing a Senate sponsor.

“We are hopeful that a sponsor will be found and that the Senate will consider the bill this year,” said Ms. Berthoud. “We believe the bill includes a number of items that will improve the way the insurance industry operates and will also benefit consumers.”

Saturday, September 16, 2006

NAPSLO Members Elect New Officers, Directors

NAPSLO elected a slate of officers and directors for 2006-07 at the Annual Business Meeting, on Friday, September 15, at the Annual Convention in Chicago.

Elected officer positions were:
President - William H. Newton, Lemac & Associates, Los Angeles, Calif.
Vice President - Mary Ellen Rozzell, Continental/Marmorstein & Malone, Paramus, NJ.
Secretary - John F. Wood, III, CIC, CIW, Specialty Risk Associates, Inc., Shreveport, La.
Treasurer - Dale H. Pilkington, Colony Insurance Company, Richmond, Va.

Elected for new three-year terms on the Board were Gregory T. Crouse, Crouse & Associates Insurance Brokers, Inc., San Francisco; and Gilbert C. Hine, Jr., CPCU, McClelland & Hine, Inc., San Antonio, Texas. Letha Heaton, Evanston Insurance Company, Deerfield, Ill.; Matthew D. Nichols, All Risks, Ltd., Hunt Valley, Md.; and Mr. Pilkington, were elected for new three-year terms.

Directors are elected for three-year terms on the Board. Officers are elected for a one-year term.

Tuesday, August 15, 2006

2006-07 Slate of Officers, Directors announced

The NAPSLO Nominating Committee recently issued its proposed slate of officers and directors for 2006-07. Member firms will vote on the proposed slate during the Annual Business Meeting, scheduled for Friday, September 15, at the Annual Convention in Chicago.

Nominated for officer positions were:
President - William H. Newton, Lemac & Associates, Los Angeles, Calif.
Vice President - Mary Ellen Rozzell, Continental/Marmorstein & Malone, Paramus, NJ.
Secretary - John F. Wood, III, CIC, CIW, Specialty Risk Associates, Inc., Shreveport, La.
Treasurer - Dale H. Pilkington, Colony Insurance Company, Richmond, Va.

Nominated for new three-year terms on the Board were Gregory T. Crouse, Crouse & Associates Insurance Brokers, Inc., San Francisco; and Gilbert C. Hine, Jr., CPCU, McClelland & Hine, Inc., San Antonio, Texas. Letha Heaton, Evanston Insurance Company, Deerfield, Ill.; Matthew D. Nichols, All Risks, Ltd., Hunt Valley, Md.; and Mr. Pilkington, were renominated for new three-year terms.

Directors are nominated for three-year terms on the Board. Officers are nominated for a one-year term.

Monday, August 14, 2006

Advanced School set for Nov. 4-7, in Dallas

Registration materials for the Advanced School, set for November 4-7 in the Dallas area, have been mailed to NAPSLO members in August. Materials are also available on the web site.

The Advanced School will include sessions on claims, finance, recognizing scams, reinsurance & alternative risk, and brokering. A new session on understanding exposures, emerging trends and specialty marketplace responses to E-business has been added this year.

The cost for the three-day school is $1,250, which includes room and board and course materials. The registration deadline is October 5. People with more than five years experience in the surplus lines industry are encouraged to apply.

The school offers a comprehensive look at surplus lines, and provides the opportunity to meet with others in the industry. Completion of the NAPSLO E&S School is not a prerequisite.

Wednesday, August 09, 2006

NAPSLO seeking committee volunteers

Employees of NAPSLO member firms interested in volunteering for a NAPSLO committee and attending Committee Day in late November in Dallas should notify NAPSLO by the end of August.

Members should e-mail the request to info@napslo.org, or write or fax, the NAPSLO office by August 31 to volunteer for a committee assignment. In the correspondence, provide background information and any areas of interest. (If e-mailed, please include firm name and firm address.)

If you are willing to volunteer for a committee assignment, indicate availability to attend Committee Day, which is scheduled for November 13-14 at the Hyatt Regency Hotel at the Dallas-Fort Worth Airport.

NAPSLO has nine committees and approximately 100 volunteer committee members. Each year a number of the committee members leave committee service, making room for new volunteers to join the committees.

Current NAPSLO committees are as follows: Budget, Finance, Audit & Investment; Communications & Technology; Convention; Education; International; Internship; Legislative; Membership & Ethics; and Mid-Year Educational Workshop.

There are usually more volunteers than committee positions and everyone may not be selected. However, members are urged to continue to apply in the future.

Thursday, July 20, 2006

NAPSLO Applauds Surplus Lines Reform Bill Approval

The National Association of Professional Surplus Lines Offices -- NAPSLO -- the nation's leading trade association for surplus lines brokers and companies, applauded the passage of the Non-Admitted and Reinsurance Reform Act of 2006 (H.R. 5637), by the House Financial Services Committee, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and NAPSLO hopes that the next step is swift floor action on the bill.

The Subcommittee passed the bill on Wednesday, sending it to the full committee for review. The bill, introduced by Reps. Ginny Brown-Waite (FL) and Dennis Moore (KS) on June 19, would improve and streamline the regulation of non-admitted insurance and reinsurance. In June, Richard Bouhan, Executive Director and General Counsel for NAPSLO, testified in support of the bill and on Wednesday said he was happy to see the bill moved out of the subcommittee.

“NAPSLO is pleased to see that the HR 5637 has been passed out of the subcommittee and hopes it will be passed by the full committee and Congress,” Mr. Bouhan said. “We believe it is the right bill at the right time. This legislation will bring much-needed relief to the complex and confusing surplus lines regulatory process, and we are grateful that many of NAPSLO's concerns are directly addressed in the bill.”

Many of the bill's provisions, including the creation of a uniform system of premium tax allocation and remittance, uniform standards for producer licenses, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated purchasers are concepts long endorsed by NAPSLO.

"We believe that this legislation will significantly increase the level of efficiency for surplus lines insurance, particularly across multiple jurisdictions, for everyone involved in the non-admitted market, from the companies down to the consumers,” Mr. Bouhan said. We appreciate the efforts of Rep. Brown-Waite and Rep. Moore and also Chairman Richard Baker’s leadership on this issue, for making insurance regulatory reform a priority."


A complete copy of Mr. Bouhan’s testimony is available on the Legislation/Regulation section of the NAPSLO website (www.napslo.org), under the NEWS heading.

Monday, July 10, 2006

Connecticut Sends Market Conduct Exam Survey

The Connecticut Insurance Department recently sent a "market conduct examination survey" to many insurance companies, including some surplus lines companies. The survey required the companies to respond to 48 separate questions by Aug 11, 2006.

Many of the questions appeared to be applicable only to an admitted company so NAPSLO has asked the Insurance Department to clarify whether they intended to send it to surplus lines companies as well. The Department has confirmed that, in its view, the survey applies to surplus lines companies.

In response to Connecticut’s confirmation, NAPSLO has submitted a letter objecting that the survey should not apply to surplus lines companies; that many of the survey questions are tailored to admitted companies, and that surplus lines companies are more appropriately examined by their state of domicile.

NAPSLO explained that the surplus lines laws generally regulate brokers (not companies) and the Connecticut laws specifically state that surplus lines companies are not considered to be "doing business" in the state.

It is not clear why Connecticut decided to submit the market conduct surveys to surplus lines companies, when they are traditionally examined only by the state of domicile. A copy of NAPSLO's letter may be downloaded from the NAPSLO web site.

Friday, July 07, 2006

Convention Hotel Rooms Sold Out

All rooms NAPSLO booked at the Hilton Chicago, Palmer House Hilton, and the Sheraton Chicago Hotel & Towers have been filled and NAPSLO requests that members who have not mailed their registration and hotel forms to NAPSLO should make hotel arrangements on their own.
NAPSLO will locate rooms for registrations received as of July 7 however NAPSLO will not be able to accommodate any past that date. NAPSLO confirmation letters will list the hotel where attendees have been placed.


Because of other conventions in Chicago, the major hotel chains were not able to assign any additional blocks of rooms to NAPSLO but attendees can find individual rooms at a number of hotel locations in Chicago. New registrants should check the various hotel chain web sites or hotels.com to secure a room.

To see the location of the convention hotels, and find other hotels in the area of the Hilton, please see the Hotels section of the NAPSLO website or use the "Search by Address" feature at hotels.com. (The Hilton Chicago zip code is 60605.)

In addition, meeting space at the Hilton Chicago has been filled but some remains available at the Palmer House. Space for cocktail parties for less than 100 people is available at both locations.

Monday, June 26, 2006

NAPSLO praises introduction of NARRA

The National Association of Professional Surplus Lines Offices, Ltd. (NAPSLO) the nation's leading trade association for surplus lines brokers and companies, praised the introduction of the Non-Admitted and Reinsurance Reform Act of 2006 (H.R. 5637), during a congressional hearing on June 21.

In testimony before the House Financial Services Committee, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, Richard Bouhan, Executive Director and General Counsel for NAPSLO, praised Subcommittee Richard Baker and Representatives Ginny Brown-Waite (R-FL) and Dennis Moore (D-KS) for introducing this important regulatory reform legislation.


Many of the bill's provisions, including the creation of a uniform system of premium tax allocation and remittance, uniform standards for producer licenses, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated purchasers are concepts long endorsed by NAPSLO.

For more information, read NAPSLO's press release.

Thursday, June 01, 2006

Convention Registration Materials Mailed

Registration materials for the 2006 NAPSLO Annual Convention in Chicago have been mailed to all NAPSLO members. In addition, the material may be downloaded from the NAPSLO website, under the Meetings section.

The convention is set for September 13-16 at the Hilton Chicago and rooms are also available at the Palmer House Hotel. The convention will open on Wednesday, September 13, with the Opening Reception. Programs start on Friday morning and Thursday is open for meetings with members.

CBS Newsman Mike Wallace will present the Derek Hughes/NAPSLO Educational Foundation Lecture Series presentation on Friday and there will be a Legislative Breakfast on Saturday.

Registration fees are $695 for the first five people from the same firm and $575 for the sixth or more delegate from the same firm. Spouse fees are $375.

The housing deadline is July 26 and registration fees increase to $765 for delegates and $400 for spouses as of July 27.

Reminder: NAPSLO has moved to new offices
NAPSLO
200 N.E. 54th St. #200
Kansas City, MO 64118

Monday, May 15, 2006

NAPSLO's New Address

As of June 1 the NAPSLO office will be moved to a new location in Kansas City, however the phone (816-741-3910) and fax (816-741-5409) will remain the same.

As of June 1, 2006 NAPSLO's address will be:
NAPSLO
200 NE 54th St. Ste 200
Kansas City, MO 64118

NAPSLO will move to the new office on Tuesday, May 30 and phone and e-mail may be down for a short time.

NOTE: E-mail to the NAPSLO office also may be delayed May 17-18 during upgrades and maintenance to the computer network.

Wednesday, April 12, 2006

NAPSLO disapointed with OFC proposal

NAPSLO has expressed disappointment that the long awaited Optional Federal Chartering Proposal (OFC) which was recently introduced in the United States Senate, did not address the premium tax remittance and licensing concerns of the surplus lines industry.

The bill, The National Insurance Act (NIA), was introduced by Senators John Sununu (R-NH) and Tim Johnson (D-SD). The NIA provides for a parallel system of state and federal supervision of insurers and insurance producers. The proposed system of insurance regulation is modeled after the current dual system of state and federal banking regulation.

“Unfortunately, NAPSLO’s proposals to solve the current tax remittance and licensing problems of the industry were not included in the NIA legislation,” said NAPSLO Executive Director Richard Bouhan. “As a result, the NIA remains incomplete by not addressing the concerns of the $35 billion surplus lines industry. NAPSLO will continue to work with Senator Sununu and Johnson and their staffs to have the NAPSLO proposals included in any future versions of the bill.”

The NIA provides for two types of federal insurance company charters - one for national life companies and another for national property/casualty companies. Insurers can opt to be either federally or state chartered and can convert freely between federal and state charters.

NAPSLO had worked with the drafters of the NIA and offered ways in which the NIA could be improved by addressing surplus lines concerns on tax remittance and licensing issues.

Specifically, NAPSLO offered proposals that would create a national/federal surplus lines license that would allow the holder of the license to procure or place surplus lines insurance in any state consistent with state surplus lines laws.

Although the premium tax remittance, multi-state compliance and “level playing field” concerns are not included in the NIA, they are addressed, positively, in SMART Act which remains NAPSLO’s preferred approach in regard to federal insurance regulatory reform legislation. The House Financial Services Committee is currently considering the SMART Act.

More information on NAPSLO's views is availabe on the website.

Tuesday, March 28, 2006

NAPSLO hires Director of Government Affairs

NAPSLO has named Steven P. Stephan, CPCU, ARe, as Director of Government Relations for the Association. In the new position Mr. Stephan will be responsible for the Association’s government affairs activities at the state level, including working with the NAIC, NCOIL, and other industry organizations and also assisting the Board on legislative and regulatory matters.

“We are glad to welcome Mr. Stephan to the NAPSLO organization and believe he will be a great addition,” said President Mac Wesson. “He will be able to assist Executive Director Dick Bouhan on the increasing amount of regulatory and legislation actions facing our industry.”

Previously Mr. Stephan was Assistant Vice President and Assistant General Counsel of Employer’s Reinsurance Corporation. He also served as Vice President and General Counsel of First Specialty Insurance Corporation, Westport Insurance Corporation and Coregis Insurance Company.

His duties included advising the organization on surplus lines statutes and regulations, agent broker and MGA laws; form and rate filing laws; data calls; monitoring new laws and regulation and evaluating the impact of new laws and regulations.

Prior to working for ERC for the past 16 years, he served as law clerk for The U.S. District Court in Kansas and also for a Missouri Supreme Court Justice. He received his law degree from the University of Missouri Law School in 1987 and his undergraduate degree from Central Missouri State University.

Thursday, March 09, 2006

NAPSLO Issues White Paper on Compliance Issues

Two of the key regulatory issues facing the surplus line industry, multi-state compliance and premium tax allocation in a remittance, could be solved by developing a system of one-state filing for nonadmitted business and adopting an interstate compact, according to a white paper released this week by the Nation Association of Professional Surplus Lines Offices (NAPSLO).

The white paper, available on the NAPSLO web site, was prompted by the growing number of multi-state risks and surplus lines transactions that are being plagued by tax allocation, tax remittance and multi-state compliance problems.

The NAPSLO Board established a special committee of brokers, surplus lines company executive and surplus lines stamping office managers to examine and recommend ways of solving the surplus lines premium tax remittance and multi-state compliance difficulties surplus lines brokers face.

The Committee completed the report entitled: Regulation of the Surplus Lines Industry after Gramm-Leach-Bliley: The Future is Now and submitted it to the NAPSLO Board of Directors, who unanimously adopted the white paper. Following its adoption, the white paper was sent to the NAIC Surplus Lines Task Force.

The Future is Now addresses the opportunities and challenges as well as the problems and issues the surplus lines industry faces in overcoming the difficulties surrounding the current irrational and dysfunctional surplus lines tax remittance procedures and the duplicative and costly multi-state compliance requirements.

Monday, March 06, 2006

Membership Directory

NAPSLO membership directories are being mailed to NAPSLO members and copies are also available for download from the web site.

NAPSLO member ID and password are required to access the Members Only content.

A limited number of additional printed copies are available from NAPSLO.

Wednesday, January 11, 2006

NAPSLO Mid-Year Room Block Sold Out

NAPSLO has filled its block of rooms at the JW Marriott Desert Ridge Resort & Spa for the 2006 NAPSLO Mid-Year Educational Workshop, February 16-18 in Phoenix.

Members can still register for the meeting but NAPSLO can not process any more hotel room reservations.

The following are hotels in the area that had indicated they had rooms available.

Fairmont Scottsdale Princess - (480) 585-4848
The Westin Kierland - (800) 354-5892
Marriott McDowell Mountain - (480) 502-3836
Scottsdale Residence Inn North - (480) 563-4120
Scottsdale SpringHill Suites - (480) 922-8700
Scottsdale TownePlace Suite - (480) 351-1100
Scottsdale North Courtyard - (480) 922-8400