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.

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.

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.