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

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