Pennsylvania Offers Tax Amnesty Program

The state of Pennsylvania has approved a Tax Amnesty Program which will run April 26, 2010, to June 18, 2010. All taxes owed to the Commonwealth administered by the Department of Revenue are eligible for Amnesty.

Among the taxes covered are unpaid surplus lines taxes for the 2008 calendar year. To participate, taxpayers will need to file an online Amnesty return, file all delinquent tax returns and make the required payment within the Amnesty Period. All penalties and one-half of the interest due will be waived.

If additional liabilities unknown to the Department are owed by a taxpayer, the taxpayer will need to register and complete an online Amnesty Return which includes a line item summarizing tax owed for each newly-reported or amended period, calculate the applicable interest, and remit payment of the balance due reflected on the Amnesty Return no later than the last day of the Amnesty Period.

Along with the payment for all taxes and one-half of the interest, all missing tax returns or reports must be filed electronically or on paper no later than June 18, 2010.

For complete details, please see the Pennsylavania website.

House Passes H.R. 4173

The Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), which included language on surplus lines, was approved on Friday by the U.S. House of Representatives.

The language, part of an amendment offered by Rep. Dennis Moore (D-KS) and Scott Garrett (R-NJ), establishes that the tax policies, licensing and other regulatory requirements of the home state of policyholders govern surplus lines transactions. The amendment, and several others, were approved to be included in the bill, which the House approved on Friday by a vote of 223-202.

Surplus Lines Amendment Included in House Reform Bill

NAPSLO is applauding the inclusion of surplus lines reform language in the Wall Street Reform and Consumer Protection Act of 2009, which is currently under debate by the U.S. House of Representatives

The language, part of an amendment offered by Rep. Dennis Moore (D-KS) and Scott Garrett (R-NJ), establishes that the tax policies, licensing and other regulatory requirements of the home state of policyholders govern surplus lines transactions. The amendment, and several others, were approved to be included in the bill, which the House is expected to approve on Friday.

The bill (H.R. 4173) would reform financial services regulation and create a Federal Insurance Office, a Consumer Financial Protection Agency (CFPA) and Financial Stability Council. Rep. Moore and Garrett’s amendment specifies that surplus lines transactions be governed by the home state of the policyholder.

Recently the Senate Banking Committee also began looking at Financial Services Reform under a bill entitled "American Financial Stability Act of 2009," and Banking Committee Chair Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) also worked to incorporate similar surplus lines reform language in the Senate financial services modernization legislation.

Registration Open for Mid-Year Leadership Forum

Members can now register on-line for the 2010 NAPSLO Mid-Year Leadership Forum, scheduled for March 3-6 at the Fairmont Scottsdale (Ariz.) Resort.

The format of the Mid-Year meeting was overhauled this year in response to members’ requests, with the goal of focusing the meeting on the leadership challenges of our industry and our association.

The meeting format was changed to have the Opening Reception on Wednesday, rather than on Thursday as in the past. In addition, programs are scheduled for early in the day on Thursday and Friday to allow members the rest of the day to meet with others and to take part in activities. Thursday and Friday nights are open for dinners and private parties.

Thursday morning’s program will feature a Town Hall meeting with the NAPSLO Board of Directors following a buffet breakfast. Friday’s program will also follow a buffet breakfast and will feature leaders of several of the top surplus lines insurance carriers in our industry. They will share their vision of leadership and the challenges they face, as well as the accountability they feel in order to achieve superior results in these chaotic times.

Both days’ programs are scheduled to finish before 10:00 a.m. to allow members more time to network and plan other activities. In addition to the programs, several optional activities are planned, including a Hummer Tour, a Spouse Breakfast program on "Caring for the Caregiver," and Spa Treatments.

In addition, the annual Derek Hughes/NAPSLO Educational Foundation Golf Invitational is scheduled for Friday, March 5th and members can register for the tournament on-line or download golf registration materials.

Mid-Year registration fees are $795 for delegates and $425 for spouses until January 25. Members can reserve a hotel room at the Fairmont Scottsdale at the end of the registration process.

Connecticut Recinds Several Bulletins Because of Changes

The Connecticut Insurance Department has issued a Bulletin announcing that several bulletins have been rescinded because they have become obsolete as a result of changes in legislation, regulation, or changes in Department procedures.

The Insurance Department noted that they have rescinded Bulletins EL-1 through EL-6 (Affidavits and Tax information) and Bulletins SL-15-96 through SL-15-99 (Exportable Lists).

The Bulletin also provides updated guidance to surplus lines brokers and insurers concerning compliance with affidavit, tax payment and other insurance requirements applicable to surplus lines insurers and brokers. Current information can be found on the Department’s website concerning:
• surplus lines applications and broker licensing fees
• surplus lines premium taxes
• the Exportable List for which coverages are believed to be generally unavailable from licensed insurers
• a listing of surplus lines insurers (the “White List”)

The Department also noted that surplus lines brokers must fully complete and file the affidavit form (Form SL-8) with the Department within 45 days after the policies have been procured.

Arkansas Proposes Changes to Surplus Lines Rule

The Arkansas Insurance Department has proposed changes to Rule 24 to clarify existing legislation regarding surplus lines insurance "in order to provide clear guidance to originating producers and brokers and surplus line brokers in Arkansas licensed."

A hearing has been set for December 16 at 10:00 a.m. at the department's office in Little Rock and the proposed revised regulation can be downloaded from the insurance department's website.

According to the department, Rule 24 provides direction regarding forms and documents necessary for proper reporting and accounting on property, casualty, surety and marine insurance issued by surplus line insurers through surplus line brokers.

NAPSLO Applauds Senate Banking Committee Action on Surplus Lines Reform

The National Association of Professional Surplus Lines Offices (NAPSLO) applauds the inclusion of the surplus lines reform language in the Senate Banking Committee’s Financial Services Reform legislation, entitled "American Financial Stability Act of 2009", which was released, today. NAPSLO thanks Banking Committee Chair Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) and all of the members of the Committee for their work in incorporating the surplus lines reform language in this important financial services modernization legislation. NAPSLO also recognizes Senator Evan Bayh (D-IN) and Senator Mike Crapo (R-ID) as well as Senators Bill Nelson (D-FL) and former Senator Mel Martinez (R-FL) for their leadership and support in sponsoring this surplus lines reform legislation in the Senate.

The surplus lines reform language has already passed the House three times, most recently on September 9, 2009, without a single negative vote. NAPSLO expects these provisions to become law, shortly.When enacted the surplus lines modernization language will make the payment of surplus lines taxes, particularly on multi-state risks, more efficient and less burdensome to the surplus lines broker and will benefit the insurance consumer who ultimately pays the price of the current dysfunctional and costly tax remittance system. In addition, multiple, duplicative and overlapping compliance requirements will be eliminated on surplus lines policies that insure risks across state lines. The legislation also allows many commercial buyers easier access to the surplus lines market where coverage for difficult and hard to insure risks can be found.

“The Senate Banking Committee’s action is a giant step toward realizing the goal of a more efficient process for transacting surplus lines business for both consumers and insurance professionals,” NAPSLO President Marshall Kath stated.

Richard Bouhan, NAPSLO Executive Director said, “NAPSLO has been in the forefront of the effort to streamline the surplus lines marketplace for a number of years and we are beginning to see the ‘light at the end of the tunnel’ from this effort with today’s Banking Committee action.”

“We still have some distance to go, legislatively, before surplus lines regulatory reform is a reality, but we are well on the way to enacting this important insurance modernization legislation,” said Maria Berthoud of B&D Consulting who represents NAPSLO in Washington, D.C.

The bill contains a whole host of changes regarding the regulation of insurance and other financial services and NAPSLO will be reviewing those from the surplus lines perspective and commenting on them shortly.

California Stamping Fee to Increase in 2010

The Surplus Lines Association of California announced that the Executive Committee and Stamping Committee approved an increase in the stamping fee from .225% to .250% effective February 1, 2010.

All new policies, renewal policies, and extension endorsements with an effective date on or after February 1, 2010 will incur a stamping fee of .250%

The stamping fee for endorsements, audits, installments or cancellations (excluding extension endorsements) will be the same percentage as the inception date of the policy/certificate being endorsed.

If you have any questions please call Joy Erven, Director Stamping Office, at 415-434-4900 Ext. 105. You can also contact Pat McAuley, Data Processing Manager or Vienna Murray, Education Manager.

Third Data Transfer Webinar Scheduled for Tuesday

The GA Interface Subgroup will be hosting the third in its series of Proof of Concept demonstrations showing the importation of data to GA Systems on Tuesday, Oct. 20 from 2:30-3:30 p.m. Eastern.

This webinar will feature technology available through Vertafore and the presenters will be Joe Benson and Dennis Hank of Vertafore and Tammie Miller of CRC/Southern Cross. Also participating will be GA Interface Subgroup Chair Mike Roy, CRC Insurance and Retail Agent E&S WG Co-Chair, Angelyn Treutel, Treutel Insurance Agency.

Please reserve your Webinar seat in advance by clicking this link: https://www1.gotomeeting.com/register/353666336. After registering you will receive a confirmation email containing information about joining the Webinar.

There is no charge to attend this Webinar. After you logon to the Internet session, you will be able to listen to the audio through your computer headset or speakers. If you would prefer, you will also be provided with a toll number you can call to listen to the audio. Because of the number of participants, we will address written questions submitted online during the session.

System Requirements for PC-based attendees are Windows® 2000, XP Home, XP Pro, 2003 Server, or Vista. For Macintosh®-based attendees, system requirements are Mac OS® X 10.4 (Tiger®) or newer.

Convention Starts on Wednesday

The 2009 NAPSLO Annual Convention starts on Wednesday at the Orlando World Marriott Resort and more than 2,800 people are expected to attend the meeting.

Registration opens on Wednesday and the Opening Reception will be that night. Thursday is open for meeting with member and programs are on Friday and Saturday morning.

The phone number for the on-site registration desk is 407-238-4120.

A.M. Best Webcast on Friday

Registration is still open for the A .M. Best Co. and NAPSLO Webcast entitled, "State of the Excess and Surplus Market" on Friday, September 25, from 11 a.m. to Noon (Eastern).

Registration is free and can be done online at Best's Conference Center.

Company leaders and experts in the specialty insurance market will discuss the findings of the annual report from A.M. Best and the Derek Hughes/NAPSLO Educational Foundation on the issues shaping the excess and surplus market and how companies are faring within it.

Speakers scheduled include:

• Steve DeCarlo, CEO, AmWins
• Neil Abernathy, CEO & President, Swett & Crawford
• Matt Power, EVP, Lexington Insurance Co.
• Joseph Roethel, Assistant Vice President, A.M. Best Co.
  

Topics will include:

• An analysis of the performance of the leading excess and surplus insurance coverage writers.
• An exploration of changes in the distribution environment and the roles of agents and brokers.
  

Attendees can submit questions or comments for the discussion by e-mailing news@ambest.com. Questions and comments will be discussed before and during the live event. Coverage of the Webcast will be featured in an upcoming issue of Best's Review.

Online Registration for Convention Ends on Friday

Online registration for the 2009 NAPSLO Annual Convention ends on Friday and members interested in attending the meeting, Oct. 7-10 in Orlando, will have to register on site after Sept. 18.

Nearly 2,700 people have registered for the meeting, which will take place at the Orlando World Center Marriott. Hotel rooms at the Marriott are sold out but rooms are still available at the Caribe Resort, located nearby. NAPSLO will operate a shuttle between the two hotels during the convention.

The convention's Opening Reception will take place on Wednesday, Oct. 7 and programs are scheduled for Friday and Saturday morning. Among the programs will be a speech Dr. Robert Hartwig of the Insurance Information Institute, a industry panel and a game show type of program featuring representatives of Baby Boomers and members of NAPSLO's Next Generation discussing workplace issues.

NAPSLO Encouraged About NRRA Prospects following House Passage

NAPSLO officials are encouraged about Senate prospects for the NonAdmitted and Reinsurance Reform Act of 2009 following unanimous approval by the U.S. House of Representatives on Wednesday.

"We are very pleased to see the strong support the House members gave the bill and we hope the Senate will follow suit," said NAPSLO President John Wood. "This is an important piece of regulatory reform that will help both consumers and the industry."

The NRRA (HR 2571, S 1363) is aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform regulatory system, while preserving the role of the state regulator. The House overwhelmingly passed similar versions of the bill in the last two sessions of Congress. The Senate considered a similar bill in 2007 but it took no action prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress.

"This is the third time the House has passed this legislation. We are hoping the third time is the charm and the bill will be signed into law," said NAPSLO Executive Director Richard Bouhan. "These reforms and efficiencies are needed now."

Senators Evan Bayh (D-IN) and Mel Martinez (R-FL) introduced the Senate companion to the House-approved NRRA in early June. NAPSLO representatives have working closely with these leaders and other members of the Senate Banking, Housing and Urban Affairs Committee to encourage Senate action on the bill.

"We are encouraged by our discussions and look forward to the Senate passing the bill soon, whether as a stand-alone bill or in connection with other financial services & insurance reform proposals," said Maria Berthoud, Partner, B&D Consulting. "A number of proposals are being considered by the Senate and we believe the NRRA will be included as part of these reforms. Senator leaders know how important this bill is and recognize that it has broad industry support and the unanimous endorsement of the House."

House Expected to Approve NRRA on Wednesday

The House of Representatives is scheduled to vote on the NonAdmitted and Reinsurance Reform Act of 2009 on Wednesday and NAPSLO officials are hopeful the Senate will take positive action following the House's expected approval.

The House version of the NRRA (HR 2571) is one of 15 bills listed on the House of Representatives Suspension Calendar, which is generally used to quickly pass non-controversial bills. The vote is expected to be carried live on C-Span on cable and on its website at http://www.c-span.org/.

The NRRA (S 1363 in the Senate) is aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform regulatory system, while preserving the role of the state regulator. In May, Reps. Dennis Moore (D-KS) and Scott Garrett (R-NJ), members of the House Financial Services Committee, introduced the bill, which has more than 20 cosponsors.

The House overwhelmingly passed similar versions of the NRRA in the last two sessions of Congress. The Senate considered a similar bill in 2008 but it took no action prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress.

Senator Evan Bayh (D-IN) and Senator Mel Martinez (R-FL) introduced the Senate companion to the House bill in June. NAPSLO representatives have been working closely with Senate leaders and other members of the Senate Banking, Housing and Urban Affairs Committee to encourage Senate action on the bill.

California court rejects submitting E&S carriers to double taxation

A California court released its ruling on Wednesday in Silvers v. State Board of Equalization that surplus lines insurers should not be subject to both surplus lines taxes and gross premium taxes. In the decision, Judge Holly Kendig rejected arguments to require surplus lines insurers with California insureds to pay both the 2.35% tax on gross premiums written and the 3.0% surplus lines premium.

The case involved a claim that, based upon a constitutional provision that imposed a tax on companies "doing business" in California, the State Board of Equalization should have been collecting from Lexington Insurance Co. and numerous other unnamed surplus lines carriers both the gross premium and surplus lines premium taxes as they were doing business in California.

Lexington argued that the legislative history and case law showed that the surplus lines premium tax was in lieu of gross premium tax. NAPSLO, the Surplus Lines Association of California, and others submitted amicus briefs supporting Lexington's position.

In a decision reached on Aug. 28, the Court rejected the plaintiffs' argument and held that the 2.35% tax only applies to admitted insurers doing business in the state and does not apply to surplus lines insurers such as Lexington.

AM Best to host webinar on state of E&S Market

A.M. Best Co. is working with NAPSLO to host a Webcast entitled, "State of the Excess and Surplus Market" on Friday, September 25, from 11 a.m. to Noon (Eastern). Registration is free and can be done online at Best's Conference Center.

Company leaders and experts in the specialty insurance market will discuss the findings of a soon to be published report from A.M. Best and the Derek Hughes/NAPSLO Educational Foundation on the issues shaping the excess and surplus market and how companies are faring within it.

Speakers scheduled include:

• Steve DeCarlo, CEO, AmWins
• Neil Abernathy, CEO & President, Swett & Crawford
• Peter Eastwood, CEO, Lexington Insurance Co.
• Joseph Roethel, Assistant Vice President, A.M. Best Co.
  

Topics will include:

• An analysis of the performance of the leading excess and surplus insurance coverage writers.
• An exploration of changes in the distribution environment and the roles of agents and brokers.

Attendees can submit questions or comments for the discussion by e-mailing news@ambest.com. Questions and comments will be discussed before and during the live event. Coverage of the Webcast will be featured in an upcoming issue of Best's Review.

Nominating Committee Releases Report

The NAPSLO Nominating Committee has released their report with proposed slates of director and officer nominees for 2009-2010.

NAPSLO member firms will vote on the proposed slate of officers and directors during the Annual Business Meeting, scheduled for Friday, October 9 at the 2009 Annual Convention in Orlando.

Nominated for officer positions were:

President - Marshall P. Kath, Colemont Brokerage Group, Inc., Dallas, Texas
Vice President - Timothy P. Makowski, Specialty Lines Underwriters, Milwaukee, Wisconsin.
Secretary - Letha E. Heaton, Admiral Insurance Co., Cherry Hill, New Jersey
Treasurer - Robert T. Sargent, CPCU, RPLU, ARM, Mercator Risk Services, Inc., Hartford, Connecticut

Nominated for three-year terms on the Board were:

Gregory T. Crouse, Crouse & Associates Insurance Brokers, Inc., San Francisco, California
Gilbert C. Hine, Jr., McClelland & Hine, Inc., San Antonio, Texas
Matthew D. Nichols, ASLI, All Risks, Ltd., Hunt Valley, Maryland
Michael P. Fujii, Endurance American Specialty Insurance Company, New York, New York
Letha E. Heaton, Admiral Insurance Company, Cherry Hill, New Jersey

Directors are nominated for three-year terms on the Board. Officers are nominated for a one-year term. Mr. Fujii is new to the Board and Ms. Heaton recently changed NAPSLO member affiliations.

NAPSLO contests Montana assuming collection of stamping fees

NAPSLO is submitting a letter and will take part in hearings on August 21 to contest the decision by the state of Montana to take over collection of stamping fees from the Montana Surplus Lines Agents Association (MSLAA).

Effective July 1, 2009 the Montana Commissioner of Securities and Insurance announced it would review and process surplus lines insurance submissions, determine applicable stamping fees owed, and send surplus lines agents tax and fee statements.

NAPSLO is questioning the basis for the state to take over the MSLAA’s duties in collecting the stamping fee. Under Montana state law “if a surplus lines advisory organization is not operating as set forth in this section, the stamping fee may be collected by the commissioner and placed in a state special revenue account for the expenses of regulating surplus lines” however the MSLAA was in operation at the time of the take over.

“NAPSLO’s view is that the state can step in only if there isn’t a surplus lines advisory organization collecting the fees, and there was an organization in place collecting the fees,” said NAPSLO Director of Government Relations Steve Stephan. “We believe under state law Montana must allow the MSLLAA to resume its role in collecting the stamping fees and processing submissions.”

In addition, Mr. Stephan noted in the letter to the department that it can only take over the stamping fee collection duties from an existing organization if there is a finding that the organization is not operating pursuant to Montana law. To date Mr. Stephan said there has been no examination by the commissioner finding a violation of law and no hearing has been provided to the MSLAA and as a result there is no basis to conclude that the advisory organization was not operating as required.

According to statistics from the Surplus Lines Stamping Office of Texas, $54.2 million in surplus lines premiums were written in Montana in 2008, and approximately $1.5 million would have been collected in surplus lines taxes and $542,000 in stamping fees.

Second Agent to Broker/MGA Data Transfer Demo Set

The General Agent Interface Subgroup will be hosting the second in the series of Proof of Concept demonstrations showing the importation of data from retail agent systems to MGA/Broker Systems on Wednesday, Sept. 2 from 11:00 a.m. to Noon (Eastern).

This webinar will feature technology provided by Appulate and the presenter will be Dimitri Nikouline, assisted by Subgroup Chair Mike Roy of CRC Insurance Services, Scott Montney of Cochrane & Company and Retail Agent E&S Working Group Co-Chair Angelyn Treutel.

Please reserve your Webinar seat in advance by clicking the registration link. After registering you will receive a confirmation email containing information about joining the Webinar. There is no charge to attend the Webinar.

A replay of the first webinar demonstration with ADTS is available online.

Committee Volunteer Deadline is August 21

NAPSLO members interested in volunteering for a committee need to contact the NAPSLO office by August 21. Interested people should e-mail your request, or fax the NAPSLO office at (816) 741-5409 to volunteer for a committee assignment.

In the correspondence, potential volunteers need to provide background information on yourself (including name and address information), areas of interest and any current or past involvement with other industry associations.

In addition, you should indicate your availability to attend Committee Day, which is scheduled for Nov. 16-17 at the Grand Hyatt DFW at the Dallas-Fort Worth Airport.

NAPSLO committees are as follows: Budget, Finance, Audit & Investment; Career Awareness; Communications & Technology; Convention; Education; International; Internship; Legislative; Membership & Ethics; Mid-Year Educational Workshop, and PAC. Please see the NAPSLO website for additional information on the committees

First Retailer to MGA/Broker Data Transfer Demo is Aug. 11

The first in a series of demonstrations of technologies that enable the import of data from retail agent systems to general agent/broker systems is set for Tuesday, August 11 from 2:00-3:00 PM (Eastern) and the webinar is open to NAPSLO members.

The General Agent Interface subgroup of the Retail Agent - E&S Working Group is putting on the demonstrations and the first webinar will feature technology provided by ADTS/Insurance Technologies Corporation. The presenter will be Dave Huff of ADTS, assisted by Subgroup Chair Mike Roy and Tammie Miller of CRC Insurance Services and Retail Agent E&S WG co-Chair Angelyn Treutel.

Reserve your spot at the demonstration by registering at: https://www1.gotomeeting.com/register/459995457. After registering you will receive a confirmation email containing information about joining the Webinar.

There is no charge to attend this Webinar. After you logon to the Internet session, you will be able to listen to the audio through your computer headset or speakers. If you would prefer, you will also be provided with a toll number you can call to listen to the audio.

Webinar System Requirements
PC-based attendees: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista
Macintosh®-based attendees: Mac OS® X 10.4 (Tiger®) or newer

The Retail Agent - E&S Working Group was formed by ACT, AAMGA, and NAPSLO in 2008 to improve the efficiencies for retail agents interacting with managing general agents and wholesale brokers in the E&S market and to promote the electronic exchange of data between the parties. The working group also has three sub-groups addressing retail agent interface (including applications and supplementals), electronic interfaces between the parties, and general agent Web site functionality.

Hotel Rooms at Main Hotel Are Sold Out; Rooms Available at Caribe

Hotel rooms at the Orlando World Center Marriott for the 2009 NAPSLO Annual Convention are sold out, however rooms are still available at the Caribe Royale Resort.

Update - a few rooms are now available at the Marriott because of cancellations, however all dates may not be available. A few suites are available - contact vicky@napslo.org for details.

More than 2,350 people are registered for the convention, set for October 7-10. Representatives of NAPSLO member firms may registered for the convention, and reserve a hotel room, through the NAPSLO Convention site - http://annual.napslo.org. Registration rates rise on September 1.

The convention will open on Wednesday evening, October 7, with the Opening Reception. Programs start on Friday with the Derek Hughes/NAPSLO Educational Foundation Lecture featuring Dr. Robert Hartwig of the Insurance Information Institute. There will also be a panel discussion on Friday featuring company and broker representatives discussing the current state of the industry. The Next Generation Rendezvous, second annual Cocktail Party will be held on Friday, October 9. A special discussion panel with the Next Generation of E&S vs. the Baby Boomers on current workplace issues will take place on Saturday morning from 9:00 a.m. - 10:30 a.m.

Registration Underway for Advanced School

Registration for the NAPSLO Advanced School is now underway and materials are being mailed or are available to download from the NAPSLO website.

The 2009 Advanced School is set for November 7-10, 2009 in St. Louis, MO and offers a comprehensive look at surplus lines and provides the opportunity to meet with others in the industry. Up to 12 hours of continuing education credit, depending on course, will be available.

The sessions will take place at the Eric P. Newman Education Center, which is located within walking distance of the Parkway Hotel, where attendees stay.

The Advanced School is designed for insurance professionals with more than five years experience in the surplus lines industry. Persons with less than five years surplus lines experience are encouraged to attend the NAPSLO E&S School, offered each Summer, however completion of the NAPSLO E&S School is not a prerequisite.

Registration deadline is October 1 and applicants must work for a NAPSLO or AAMGA member firm.

NAPSLO, PLUS Working Together to Offer Educational Programs to Each Other's Members

The Professional Liability Underwriting Society (PLUS) and the NAPSLO are working together to offer unique opportunities for members of both organizations. PLUS is a nonprofit organization established to support and enrich the careers of people involved in the field of professional liability underwriting.

“PLUS and NAPSLO are two of the most highly respected associations in the insurance industry; both with unique missions and membership, and we have a common interest in providing education and information to our members. This new initiative is designed to enhance both organizations and the value we bring to our members. It once again demonstrates how our industry responds to challenges with the type of innovation that leads to a brighter, more successful future,” said PLUS President, David Bell, Chief Operating and Administrative Officer of Allied World Assurance Company, Ltd.

“NAPSLO is known as the authoritative voice of the surplus lines industry. We are always looking for relationships with other segments of the insurance industry, particularly when it comes to providing educational information, promoting the professionalism of our members and sharing information about the vital role of the excess and surplus lines insurance industry,” said NAPSLO President, John F. Wood, III, President of Specialty Risk Associates. “Our partnership with PLUS will allow for new ways to accomplish our mission and provide value to our members.”

Through this partnership, NAPSLO member companies and their employees will gain access to the PLUS Curriculum, a 23-module collection of professional liability training modules designed for adult learners, and other educational opportunities at its conference and seminars. Concurrently, PLUS will gain the benefit of NAPSLO’s surplus lines expertise through shared presentations, regulatory information, and access to NAPSLO’s educational schools.

The 2009 PLUS Annual International Conference, being held November 11-13 in Chicago, will host a panel presentation featuring a number of experts in the excess and surplus lines industry.
Visit www.plusweb.org or www.napslo.org for more information about efforts to better each organization’s sector of the insurance industry

Director Candidate Suggestions Sought

Director candidate nominations are still being accepted by the NAPSLO Nominating Committee in order to assist the Committee in developing the slate of directors to be presented for a vote at the next Annual Business Meeting to be held in conjunction with the 2009 Annual Convention in Orlando, Florida on October 9.

NAPSLO members must submit the candidate names for consideration as director nominees no later than August 26, 2009, but members are encouraged to submit such names as soon as possible. Suggested candidate names may be submitted by NAPSLO members to the committee, in writing, by e-mail at nominations@napslo.org; by postal mail to the NAPSLO office; or directly to members of the Nominating Committee.

The Nominating Committee is chaired by former Past President Bill Newton of RPS Los Angeles (Lemac & Assoc.) and members of the committee are: Dave Leonard, RSUI Group; Hank Haldeman, The Sullivan Group; Tim Makowski, Specialty Lines Underwriters, and Steve Vaccaro, MAX Specialty Insurance Co.

As required by the Association's Bylaws, the Nominating Committee will prepare slates of nominees and submit them to the NAPSLO membership at least 30 days prior to the Annual Business Meeting.

Annual Convention Registration Passes 2,000

More than 2,000 people have registered for the 2009 NAPSLO Annual Convention, October 7-10 at the Orlando World Center Marriott, and hotel rooms at the Marriott are nearly sold out. A number of rooms are available at the Caribe Royale Resort, located near the Marriott.

Representatives of NAPSLO member firms may registered for the convention, and reserve a hotel room, through using the link on the NAPSLO Convention site - http://annual.napslo.org.

Washington Changes Surplus Lines Code

The state of Washington has made changes to the states surplus lines codes, effective July 1, 2009. EHB 1568—Producer Licensing, which was signed into law by the governor, addresses surplus lines brokers in the context of on-going producer licensing reforms that have been approved in recent years. The bill makes the following changes:

• The measure prohibits certain practices for surplus line brokers.
• It applies a number of statutes to surplus line brokers, and makes a number of language and grammatical changes the provisions relating to surplus lines brokers.
• Minimum bonding amounts in the name of the state or a named insured for liability are modified.
• A surplus line broker must have bonds in the amount of $2,500, or 5 percent of premiums in the previous year—whichever is greater. This amount is capped at a maximum of $100,000.
  
• Additional methods to satisfy the bonding requirements are created.
• Provisions regarding the renewal of a license and the impact of late renewal or of renewing a lapsed license are added.
• A number of sections that currently apply to producers are also specifically applied to surplus line brokers.
  

Surplus Lines Stamping Offices Report 9.4% Premium Drop in First Half of 2009

Surplus lines premiums dropped more than 9 percent in the first half of 2009 among states with stamping offices, according to a new report by the Surplus Lines Stamping Office of Texas.

The report showed that premiums dropped from $11.3 billion in 2008 to $10.3 billion in 2009, with California reporting the largest drop, going from $3.1 billion in 2008 to $2.25 in 2009. As a result Florida, which only saw a 9.1% decline to $2.35 billion, took over as the largest premium volume state.

In additional to California's 27.7% decline, other states reporting double digit declines were Arizona (-17.7%), Idaho (-24.9%), Illinois (-13.5%), Nevada (-27.2%), Oregon (-29.2%), and Pennsylvania (-10.1%).

On the positive side, property increases helped Texas reported a 12.2% increase. Other states with positive numbers were: Montana (44.2%), Mississippi (9.1%), and Utah (2.7%). Montana's increase reflects the closing of the stamping office as of July 1 2,009 when the state took over collection responsibilities.

New York reported a small decline of 1.6%, dropping from $1,811 billion from $1,841 billion and Washington reported a decline of 2.5%. Minnesota's stamping office opened Jan. 1, 2009 and reported $114 million in premium.

While there was a large decline in premiums, the number of policies processed dropped only 2.9% in the first half of the year.

NJ Increases Surplus Lines Premium Tax

The New Jersey Department of Banking and Insurance announced that premium tax rate on surplus lines insurance increased from three percent to five percent on June 29.

In addition, three percent of the premium receipts tax covering fire insurance will be paid to the Treasurer of the New Jersey State Firemen’s Association and the remaining two percent of the premium receipts tax will be forwarded to the Commissioner of Banking and Insurance.

This changes requires changes to the surplus lines premium receipts tax forms and instructions related for submission of quarterly surplus lines premium taxes by producers, and for out-of State placements.

The state said that surplus lines agents and insureds required to submit premium receipts tax should utilize the revised forms and instructions for the submission of premium taxes beginning with the 3rd quarter (July 1, 2009 through September 30, 2009). The Department is developing proposed amendments to N.J.A.C. 11:19-3 to reflect the current statutory requirements. Filings not conforming with the new rates and forms will be returned to filer.

Questions may be directed to the Surplus Lines Examining Office at: (609) 292-5350 x50088 or x50106, or by e-mail to william.leach@dobi.state.nj.us or
steven.zalewitz@dobi.state.nj.us.

July Newsletter Available!

The July issue of the NAPSLO newsletter has been sent to members and a copy is also available on the NAPSLO website.

The full newsletter, or individual stories, can be viewed online on the NAPSLO website.

Convention Registration Passes 1,600

More than 1,600 people have registered for NAPSLO’s 2009 Annual Convention, scheduled for October 7-10 in Orlando, Florida, taking advantage of the improved online registration process. This year's convention theme is “Achieve Through Partnership” and the meeting will focus on current business topics.

Online registration began June 15 and members can register at http://annual.napslo.org by clicking on the Register Online link. After registering, members can reserve a hotel room through the hotel reservation link. Attendees must be registered for the Convention to reserve a room.

Convention programs include Dr. Robert Hartwig of the Insurance Information Institute presenting the ’s Derek Hughes/NAPSLO Educational Foundation Lecture; a panel discussion featuring company and broker representatives discussing the current state of the industry, and a special discussion panel with the Next Generation of E&S vs. the Baby Boomers on current workplace issues.

B&D Reviews Impact of CFPA on Industry

NAPSLO's Washington D.C. representative has reviewed the proposed Consumer Financial Protection Agency (CFPC) Act of 2009 , and based on its analysis, if passed, would have the following impact on the insurance industry:

• The business of insurance is specifically excluded from the CFPC’s authority to regulate consumer financial products or services under the Act.
• Entities engaged in the business of insurance would not be subject to the Agency's reporting requirements for "nondepository” entities.
• The authority over consumer financial protection currently vested in the state insurance regulators will not be transferred to the CFPC.
• The Act recognizes the authority of state insurance regulators' over insurance products and Annuities which is to be separate and apart from the Agency's authority.

NAPSLO Applauds Senate for Introducing the Surplus Lines & Reinsurance Bill

NAPSLO officials applaud Senators Evan Bayh (D-Ind.), Mel Martinez (R-Fla.) for introducing, and Senators Bill Nelson (D-Fla) and Mike Crapo (R-Id) for cosponsoring, the Nonadmitted and Reinsurance Reform Act of 2009 in the Senate. The bill, which was also recently introduced in the House of Representatives, was introduced in the Senate on Thursday.

“We are pleased to see Senators Bayh and Martinez taking the lead on the surplus lines bill and look forward to Senate consideration of this needed piece of insurance reform legislation,” said NAPSLO President John Wood. “This bill would help consumers by making property/liability insurance more readily available and improving the efficiency of the surplus lines insurance market.”

The NRRA (HR 2571 in the House and S 1363 in the Senate), is aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform regulatory system, while preserving the role of the state regulator.

“This bill would simplify the tax remittance and compliance responsibilities surplus lines brokers must discharge and bring efficiency and cost reduction of regulatory compliance in placements with multi-state exposures,” said NAPSLO Executive Director Richard Bouhan. “Such reform would benefit not only the brokers and underwriters who provide surplus lines insurance but also consumers who ultimately pay the price for the inefficiencies.”

In May, Representatives Dennis Moore (D-Kan.) and Scott Garrett (R-NJ), introduced H.R. 2571 in the House. The House passed similar versions of the bill in the last two sessions of Congress and the Senate took up a similar bill in 2007 but it took no action prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress. NAPSLO has been informed that H.R. 2571 will be passed under suspension in the House in early July. NAPSLO officials said they are hoping to see action take place soon on the surplus line reforms and believe there will be wide support for the legislation, noting that NAPSLO and other industry organizations have worked together in advocating enactment of this type of legislation.

“With the introduction of the bill in both the House and Senate, and wide support from the industry, we believe that this bill will be approved and signed into law,” said Maria Berthoud, Partner, B&D Consulting. “Financial services reform is currently front and center in Washington which gives us an excellent opportunity to have this bill included and passed in any larger reform measure.”

In addition to congressional action, insurance regulatory reforms are also under review by the White House. In early June NAPSLO was among a select group of insurance trade associations attending a Listening Discussion with White House officials on regulation of the financial industry Ms. Berthoud and other industry representatives met with Diana Farrell, Deputy Director of the National Economic Council and Deputy Assistant to the President, and Michael Barr, Assistant Secretary for Financial Institutions at the Department of Treasury. On June 26, NAPSLO will attend another White House meeting to discuss how this surplus lines fits into the Administration’s regulatory reform plans.

Montana CSI to assume stamping office functions

Effective July 1, 2009 the Montana Commissioner of Securities and Insurance will review and process surplus lines insurance submissions, determine applicable stamping fees owed, and send surplus lines agents tax and fee statements.

All of these functions were previously performed by the Montana Surplus Lines Agents Association (MSLAA).

In a letter to surplus lines agents, the department said the "decision to bring these functions under the direct control of the CSI from the MSLAA was a difficult process and was brought about by many factors, including the uncertainty of the surplus lines insurance market and proposed federal legislation."

In addition, the CSI noted that it had revised the surplus lines submission/endorsement forms for all surplus lines transactions reported after July 1, 2009. The updated surplus lines forms can be obtained at http://csi.mt.gov. In the near future, the CSI said it would implement an electronic filing system for surplus lines submissions.

Reinsurance Courses Available to NAPSLO Members at a Discount

Two upcoming Reinsurance Association of America programs, The Art of Designing Reinsurance Contracts and Programs and ReUnderwriting: An Educational Forum for Underwriting Professionals, are available to NAPSLO members at a discounted rate.

The Art of Designing Reinsurance Contracts and Programs is set for July 14-17 in New York City and will be a four-day seminar for professionals who need an in-depth treatment of reinsurance contracts. The program will focus on:

• Design property and casualty reinsurance contracts from the perspective of the insurer, reinsurer, and intermediary;
• Learn the impact of different contract clauses;
• Structure a contract to avoid gaps in coverage;
• Determine risk transfer and its implications on the financial statement;
• Experience the consequences of line decisions by playing Gen Re's PRIME game, a simulated management exercise.
  

The course is designed for Underwriters, contract writers, claims and accounting professionals, attorneys specializing in reinsurance, intermediaries, regulatory staff, and insurance company professionals. The 2008 program was awarded 28.5 CLE credits (can vary depending on state), including one credit hour for ethics. CPCU, CPD and CPA, CPE credits are also awarded. Hotel Accommodations are just $200 per night at the New York Helmsley Hotel.

You can review the Agenda, Brochure, and Register online. NAPSLO members qualify for the Association Partner registration rate.

The second program, ReUnderwriting: An Educational Forum for Underwriting Professionals is set for July 30 in New York City and will be a one-day program focusing on relevant topics and concerns to (re)insurance underwriting professionals.

• A reinsurance buyer's perspective about the drivers of a company's decision to purchase reinsurance;
  
• Practical hands-on session to enhance business practices, including an underwriting workshop to analyze and take active steps to improve a company's net results;
• Challenges facing underwriters and actuaries in the dynamic insurance and reinsurance market;
• V.J. Dowling's perspective on market trends;
• Panel discussion on underwriting hot topics.
  

The program is for mid-to-senior level underwriters, chief underwriting officers, brokers, actuaries, claims professionals, attorneys, and other professionals from the reinsurance and primary insurance sectors.

Hotel Accommodations are available at $200 per night at the New York Helmsley Hotel and the 2007 program awarded 6 CLE credits. CPCU, CPD and CPA, CPE credits are also awarded.

You can review the Agenda, Brochure, and Register online.

NAPSLO encouraged by proposed financial services reforms

Representatives of NAPSLO are encouraged that the initial draft of the financial services reform package outlined by the Treasury Department proposes the continued use of state regulation of the insurance industry.

The Treasury Department proposal is consistent with the outline of regulatory reform NAPSLO presented to the administration after it, along with other national groups, met with representatives of the White House and Treasury Department officials earlier this month.

"During our discussions, the Treasury asked for additional information on surplus lines and how it is regulated and NAPSLO’s views toward financial services regulation reform. We submitted the information and we are delighted that the report is in line with the views we presented, particularly in regard to insurance regulation,” said Maria Berthoud, NAPSLO's Washington Representative with B & D Consulting.

"We believe state regulation offers consumers better protections and stronger regulation and are encouraged that the Treasury Department proposal incorporates the continuation of state insurance regulation,” stated NAPSLO President John Wood. “We agree that adding enhancements to state regulation is the best approach and are pleased that the Treasury took into consideration our recent comments," Wood added.

"While the structure of the regulation of the financial services industry will be altered under the Treasury proposal, insurance regulation will remain the responsibility of the states, as it is now," Richard Bouhan Executive Director of NAPSLO stated. "We are further encouraged that with the report’s emphasis on regulatory reform, the passage of HR 2571 ---- the Nonadmitted and Reinsurance Reform Act (NRRA) ---- is even more critical. When enacted, the NRRA will facilitate the efficient placement and taxation of surplus lines insurance and would work well with the Treasury Department’s proposals,” Mr. Bouhan added.

Director Candidate Suggestions Sought

Director candidate nominations are now being accepted by the NAPSLO Nominating Committee in order to assist the Committee in developing the slate of directors to be presented for a vote at the next Annual Business Meeting to be held in conjunction with the 2009 NAPSLO Annual Convention in Orlando, Florida on October 9, 2009.

NAPSLO members must submit the candidate names for consideration as director nominees no later than August 26, 2009, but members are encouraged to submit such names as soon as possible. Suggested candidate names may be submitted to the committee, in writing, by e-mail at nominations@napslo.org; by postal mail to the NAPSLO office; or directly to members of the Nominating Committee.

The Nominating Committee is chaired by former Past President Bill Newton of RPS Los Angeles (Lemac & Assoc.) and members of the committee are: Dave Leonard, RSUI Group; Hank Haldeman, The Sullivan Group; Tim Makowski, Specialty Lines Underwriters, and Steve Vaccaro, MAX Specialty Insurance Co.

As required by the Association's Bylaws, the Nominating Committee will prepare slates of nominees and submit them to the NAPSLO membership at least 30 days prior to the Annual Business Meeting.

Members will vote at the Annual Business Meeting on the slate of five directors, who serve three year terms.
Characteristics the Nominating Committee considers in candidates include: integrity; personal character; willingness and ability to devote considerable time to the Association; ability to serve three to 10 years on the Board; a history of service to the industry, including NAPSLO committee work, involvement in state associations, active involvement in NAPSLO meetings or the NAPSLO schools; performing a leadership role in their own organization; and demonstrated leadership in the industry.

Convention Registration Now Open!

Registration for the 2009 NAPSLO Annual Convention is now open and members can register online for the meeting, set for October 7-10 at the Orlando World Center Marriott, by using the Registration link on the Convention webpage at http://annual.napslo.org. You will need your firm's Member ID for your office to register.

Please note the following items regarding the convention:

• Hotel rooms are available at the Orlando World Center Marriott ($225) and Caribe Royale Orlando ($154). NAPSLO will provide transportation between the hotels during convention hours.
• A large block of rooms is available on Tuesday for early arrivals.
• Complimentary wireless internet access will be available in the Brokers’ Lounge.
• Dr. Robert P. Hartwig, CPCU, president of the Insurance Information Institute, will present the Derek Hughes/NAPSLO Educational Foundation Lecture Series.
• A panel of company and broker members will review the current landscape in our industry.
• A panel pitting Generation X and Baby Boomers will review industry and workplace expectations and attitudes during a “Family Feud” type of program.
• NAPSLO will offer a Friday night activity for attendees under 40.

Webinar on E&S Market Available to View

A replay of the June 11 A.M. Best webinar organized by NAPSLO on the Pricing and Availability in the Excess & Surplus Lines market is now available to view on the A.M. Best website. More than 1,000 people signed up to view the webcast live.

Participants in the one-hour discussion were:

• Paul Springman, President and COO, Markel Corp.
• Marla Donovan, Vice President, Burns & Wilcox
• Kevin Westrope, President and CEO, Westrope
• Richard Kerr, Chairman and CEO, MarketScout Corporation
• Duncan McColl and Lee McDonald, A.M. Best Company
  

The panel examined today's market, including pricing and availability, for specialty insurance, and changes in the financial strength of the specialty insurance sector of the property/casualty industry.

Florida Governor Signs HB 853, Provides Remedy to Zota Ruling

Florida Gov. Charlie Crist today signed into law HB 853, which clarifies the surplus lines industry's status regarding forms and policy regulation that was challenged by the Florida Supreme Court’s ruling in 2008 in the Essex v. Zota opinion.

The Florida House of Representatives and Senate unanimously passed the legislation in May and sent the bill to the governor. On Wednesday representatives of the surplus lines industry met with the Governor to explain the importance of the legislation to Florida consumers and encouraged him to sign the bill.

The bill restores the industry's exemption from regulation of surplus lines forms and policies that was put into question by the court ruling which said that surplus lines was only exempt from the rating section of Chapter 627 of Florida’s statute (Insurance Rates and Contracts) but was subject to the chapter’s other provisions.

The new law affirms the industry's regulatory exemption retroactive to Oct. 1, 1988, the date the Florida Supreme Court’s decision ruled previous legislation initiated the exemption of rate, but not form regulation.

“We are pleased to see that the Governor signed the bill," said NAPSLO Executive Director Richard Bouhan. "This is was an important victory for the industry and for the Working Group that had drafted and steered the legislation to unanimous approvals in the Florida House and Senate."

Dale Pilkington Steps Down from NAPSLO Board

Dale Pilkington recently stepped down from the NAPSLO Board of Directors and as Vice President. Mr. Pilkington is not currently affiliated with a NAPSLO member firm and based on NAPSLO Bylaws he tendered his resignation from the Board and as Vice President.

Mr. Pilkington also served as Convention Chair and Secretary Marshall Kath will now handle the duties as Convention Chair for the 2009 NAPSLO Annual Convention in Orlando.

“I would like to thank Dale for all of his work on the Convention Committee, his past service on the NAPSLO Board, his visionary leadership, and his contributions to the NAPSLO membership,” said President John Wood.

NAPSLO Takes Part in White House Discussions on Financial Regulation

NAPSLO was among a select group of insurance trade associations attending a Listening Discussion on Thursday with White House officials on regulation of the financial industry.

NAPSLO's Washington Representative, Maria Berthoud of B&D Consulting, and other industry representatives met with Diana Farrell, Deputy Director of the National Economic Council and Deputy Assistant to the President, and Michael Barr, Assistant Secretary for Financial Institutions at the Department of Treasury.

Other groups attending included the PCI, IIABA, AIA, ACLI, CIAB, NAMIC, NAIC, NAIFA and the Financial Roundtable.

"These are significant discussions on the future of financial services regulation and it is important that NAPSLO is able to explain the role of surplus lines insurance," said NAPSLO President John Wood.

NAPSLO has been asked by Administration officials for detailed positions on federal regulation and information on the surplus lines industry and is in the process of submitting the information.

Based on discussion from Thursday, the Obama Administration is committed to setting up a systemic risk regulator that would cover any entities that are determined to be too big to fail. The biggest unresolved issue is whether the systemic risk regulator authority is given to the Federal Reserve, or if a Council is established.

The other key tenet of the Administrations proposal will deal with consumer protections. They are considering developing a super regulator for Consumer Protections, or giving all current principal regulators an enhanced office of consumer protection.

There was spirited discussion regarding if insurance should be included in a federal charter, or if states could continue their supervisory role. NAPSLO urged for Federal Standards to be examined such as the NonAdmitted Reinsurance Reform Act of 2009 (HR 2571), and NARAB as ways to help the inefficiencies of state regulation without losing a high level of consumer protection. The NRRA was recently introduced in the House of Representatives and a number of other bills are under consideration.

NAPSLO invited to attend White House Listening Discussion on Financial Regulation

NAPSLO is among a select group of insurance trade associations invited to attend a Listening Discussion on Thursday with White House officials.

The representatives are scheduled to meet with Diana Farrell, Deputy Director of the National Economic Council and Deputy Assistant to the President, and Michael Barr, Assistant Secretary for Financial Institutions at the Department of Treasury, for a small group discussion on regulatory reform issues. Maria Berthoud of B&D Consulting, NAPSLO's Washington Representative, will represent NAPSLO at the meeting.

The NonAdmitted Reinsurance Reform Act of 2009 (HR 2571) was recently introduced in the House of Representatives and a number of other bills are under consideration. The Obama administration is looking at options to overhaul the regulatory system.

NAPSLO Survey Finds Specialty Lines Capacity Unchanged and Submissions Up in 2009

Despite an economic slowdown, the majority of wholesale brokers and E&S carriers are not seeing a decline in capacity or a tightening of terms along specialty lines, but are seeing an increase in submission activity, according to the results of a recent survey of members of NAPSLO.

The survey, which was conducted in mid-May 2009, compared results of the first quarter in 2009 to the same period of 2008.

“NAPSLO members confirmed that pricing, capacity and terms in specialty lines remain relatively flat, but recognized that a major catastrophic event or changes in the economy could have a significant impact on capacity,” said John Wood, NAPSLO president. “During these uncertain times, wholesale brokers and surplus lines carriers remain strong with ample capacity to meet specialty lines needs in any market cycle.”

Nearly half of the respondents to the survey said that they were not seeing a change in the availability of specialty insurance coverage; 38% said they were seeing an increase in coverage availability and only 12% said they were seeing a decline in availability.

Regarding terms, 44% said the limitations on coverage were about the same as in the first quarter of 2008, while 31% said terms were loosening, and 22% said terms were either tightening or tightening slightly.

More than half of the respondents reported submission activity increasing, with 32% reporting a slight increase and 22% reporting consistent increases. Only 23% reported declining submissions and 22% reported submissions were about the same as in the first quarter of 2008. Specialty lines where respondents reported seeing the greatest increase in submission activity in 2009 were Property, General Liability, Casualty, and Cat Exposed Property.

When asked what factors would have the potential to have the greatest impact on availability and pricing on specialty lines in the remainder of 2009, respondents most frequently cited the economy, catastrophic losses and declining capacity among carriers and reinsurers.

Respondents were also asked about pricing and retention level changes along 10 specialty lines of business: Property, Cat Exposed Property, Casualty, Professional Liability, D&O-Private, D&O-Public, Healthcare and Medical Malpractice, Excess & Umbrella, Environmental, and Transportation. Of the 10 areas, Cat Exposed property was the main area where respondents consistently saw increases in pricing while respondents saw decreases in Property, Casualty, Professional Liability, Excess and Umbrella, and Transportation.

While availability, terms, pricing, and submission activity were comparable to 2008, respondents reported decreased retention levels in many of the 10 specialty lines surveyed, led by Casualty, Property, Excess & Umbrella and Transportation. While significant decreases were reported along these lines, the majority of respondents reported retention levels were about the same along all lines.

Results are available on the website.

Webinar on State of Industry Set for June 11

Industry leaders will review the state of the market for specialty insurance in light of a new survey conducted by NAPSLO. The special online live presentation is set for Thursday, June 11, at 11 a.m. EDT. The event is free, visit www.ambest.com/excess09 to register.

Participants in the one-hour discussion include:
--Paul Springman, President and Chief Operating Officer, Markel Corp.
--Marla Donovan, Vice President, Burns & Wilcox
--Kevin Westrope, President and CEO, Westrope
--Richard Kerr, Chairman and CEO, MarketScout Corporation
--A member of the A.M. Best Co.'s specialty lines rating group

The panel will examine today's market, including pricing and availability, for specialty insurance, known in various forms as surplus lines, excess & surplus or non-admitted coverage. They will also survey changes in the financial strength of the specialty insurance sector of the property/casualty industry. Specialty insurance includes coverages typically not available through standard commercial or personal insurance products. Best's Review, A.M. Best Co.'s monthly news magazine, will cover this topic in the September issue and will include content from the Webcast.

Topics to be covered in the panel discussion include:
--The state of insurance capacity and the availability of various lines of coverage
--How terms and limitations may be changing for various lines of specialty coverage
--How pricing, availability and retention experience have been affected for these lines of insurance coverage: property, catastrophe-exposed property, casualty, professional liability, directors and officers (both public and private), healthcare and medical liability, excess and umbrella, and environmental and transportation
--Financial strength of insurers serving the specialty lines industry

Registration for this event is free. Participants are encouraged to send in comments and questions for the discussion portion of the presentation. The Webcast will be available worldwide via a link provided upon registration.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.

NAPSLO Applauds Introduction of Surplus Lines Bill in House

NAPSLO applauded the introduction of the Non-Admitted and Reinsurance Reform Act of 2009 in the U.S. House of Representatives by Reps. Dennis Moore (D-Kan.) and Scott Garrett (R-NJ), and indicated they hoped the bill would be introduced soon in the Senate.

“NAPSLO is pleased to see Rep. Moore and Garrett introduce the bill in the House and we look forward to working with them to get the bill passed,” said NAPSLO President John Wood. “We are also encouraged regarding prospects for the bill being introduced in the Senate shortly. Passage of this bill would help streamline and reduce barriers in state regulation of surplus lines insurance”

The NRRA is, in part, aimed at making access to the surplus lines market more efficient for consumers and the brokers and agents who assist them. In addition the bill could help standardize state regulations facing the industry.

Reps. Moore and Garrett, members of the House Committee on Financial Services, submitted the bill on Thursday. Senators Evan Bayh (D-IN) and Mel Martinez (R-FL), members of the Senate Committee on Banking, Housing and Urban Affairs, have also announced that they plan on introducing a version of the bill in the Senate.

“We believe that this legislation will bring efficiency and reduce the cost of regulatory compliance in surplus lines placements with multi-state exposures,” said NAPSLO Executive Director Richard Bouhan. “Consumers will benefit because the costs related to the inefficiencies and redundancies, which they bear, will be eliminated.”

The bill 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 few years.

The House passed similar versions of the bill in the last two sessions of Congress and the Senate took up a similar bill in 2007 but no action was taken in the Senate prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress in order to be considered.

“Rep. Moore’s leadership has been important in getting the bill approved in the past two sessions and with the addition of Rep. Garrett as the lead Republican sponsor, we believe the prospects for passage are excellent,” said NAPSLO’s Washington D.C. representative, Maria Berthoud of B&D Consulting. “We are also encouraged by the interest in the bill by the Senate and are hopeful it will be passed in that chamber this year.”

NAPSLO Marketplace Survey Deadline Friday

NAPSLO is currently conducting a survey amongst its members on current market conditions and the deadline to complete the survey is Friday, May 22.

The survey, conducted by the NAPSLO Communications & Technology Committee, gauges current conditions in the marketplace. The survey conclusions will be published on the NAPSLO website, distributed to the insurance trade press, and discussed at an A.M. Best/NAPSLO webinar tentatively scheduled for June 11.

NAPSLO members who have not completed the survey can click on the link below to access the survey.

Surplus Lines Marketplace Survey

ELANY Clarifies License Authority

Resident surplus lines brokers in Missouri, Montana and Florida applying for an excess line broker license in New York will not receive full license authority to write business in New York state because those states do not issue an unlimited license for New York resident licenses, according to a recent bulletin from ELANY.

Under Bulletin 2009-10 released on May 11, ELANY reviewed the state’s position regarding reciprocity and the issuance of “full” or “limited” non-resident excess/surplus lines broker licenses. The bulletin said that brokers from Florida and Montana will receive a limited license, which permits them only to write purchasing group business in New York.

New York will issue an unlimited license for Missouri licenses for individuals, however corporate entities will receive the limited license. In addition, while not limiting what they can write, the state will require a bond for California and Washington resident brokers because those states require a bond for New York resident brokers

NAPSLO E&S School Sold Out

The NAPSLO E&S School, set for June 23-26 a the Eric P. Newman Education Center in St. Louis, has sold out.

The NAPSLO Advanced School, designed for people with more than 5 years experience in the surplus lines industry, is set for Nov. 7-10 in St. Louis and registration forms will be sent in the summer.

Rhode Island Eliminates Surplus Lines Broker Affidavit Filings

The Rhode Island Department of Business Regulation, Insurance Division, is reminding surplus lines brokers that Insurance Bulletin Number 2008-8 states that as of July 1, 2008, Rhode Island laws were amended to eliminate the filing of surplus lines affidavits.

The affidavits are still required to be executed by the insured and surplus lines broker – the change is only with regard to the filing of those affidavits with the Department. As a result the Department no longer accepts broker affidavits.

In lieu of the filing of affidavits, all surplus lines licensees must file a yearly report with the Department showing the business procured under the surplus lines license for the preceding calendar year.

Surplus Lines Brokers should use the form under Insurance Regulation 11, Exhibit C as a guide and add information such as the company name and contact information where appropriate. The first Surplus Lines Broker Annual Report filing is due April 1, 2010. There is no annual filing for 2009.

Surplus Lines Brokers who do not write any Rhode Island business in a calendar year are required to either complete the form included in Insurance Regulation 11, Exhibit C indicating that they are reporting zero premium or file a letter to that effect on letterhead.

E&S School Nearly Sold Out

The NAPSLO E&S School, set for June 23-26 in St. Louis, is nearly sold out and only a few spaces remain.

The school is designed for insurance professionals with less than five years experience in the surplus lines industry. Persons with more than five years surplus lines experience are encouraged to attend the NAPSLO Advanced School, offered each Fall

The E&S school's curriculum will focus this year on five segments: Risk Takers-and various markets; Distribution System - purpose & variations; MGA's and Brokers-managing the business; Market Dynamics-changing environments; and Cops - regulatory agencies.

Registration materials are available to download from the NAPSLO website.

Rhode Island Requiring Companies to Provide Emergency Contact Information

As part of developing an emergency adjuster access and coordination plan, the Rhode Island Department of Business Regulation, Insurance Division, has issued a bulletin requiring all Property & Casualty insurers (including surplus lines insurers) licensed or approved to do business in Rhode Island to immediately provide the Department with emergency contact information.

The department is requiring companies to designate a Primary Contact Person (“PCP”), and an Alternate Contact Person (“ACP”) in the event the PCP is not available, and provide contact information for the individuals. The contact person will serve as the primary conduit between the insurer, and the Department before, during and after a catastrophic event.

The Department said that the PCP and ACP should have the authority to provide assistance and information to the Department at all times during such event. Also included within the Plan is a Vehicle Identification Placard system that will allow vehicle access into disaster areas for vehicles carrying insurance company personnel and firms can order placards as part of registering.

The Department said it would make every effort to issue Bulletins before, during and/or after a disaster is declared in Rhode Island to offer guidance and assistance to the industry during such event. In the event of extended power outages, efforts to reach the PCP will be made via cellular phone.

The Department's liaison for catastrophic events in RI is Paula Pallozzi, Chief Property & Casualty Rate Analyst who may be reached at paula_pallozzi@dbr.state.ri.us or 401-462-9616.

Companies should visit the state's website to furnish emergency company contact information. Alien Surplus Line Insurers that do not have NAIC/FEIN numbers should contact Ms. Pallozzi directly. For more information about the information required, please download a copy of the bulletin.

Florida House, Senate Pass Bill to Remedy Zota Ruling

The Florida House and Senate approved legislation this week clarifying the surplus lines industry's status regarding forms and policy regulation that was challenged by the Florida Supreme Court’s ruling in 2008 in Essex v. Zota.

The Florida House of Representatives passed legislation on Tuesday by a vote of 116-0 and the Senate passed it 38-0 on Friday. The bill now goes to the Governor for signature.

The bill restores the industry's exemption from regulation of surplus lines forms and policies that was put into question by the court ruling which said that surplus lines was only exempt from the rating section of Chapter 627 of Florida’s statute (Insurance Rates and Contracts) but was subject to the chapter’s other provisions.

The new legislation affirms the industry's regulatory exemption retroactive to Oct. 1, 1988, the date the court’s decision ruled previous legislation initiated the exemption of rate, but not form regulation.

"We are pleased to see that the Florida legislature has passed this bill and are hopeful that the Governor will sign the bill," said Executive Director Richard Bouhan. "Led by the work of the Florida Surplus Lines Association, the Florida Insurance Council, PCIAA, AIA, Lloyd's, NAPSLO and the Florida Surplus Lines Service Office this legislation affirms the industry’s freedom from regulation of rate and forms."

Florida House Passes Bill to Fix Zota Problem

On a vote of 116-0 the Florida House of Representatives passed HB 853 this morning. The bill would clarify the surplus lines regulatory status in Florida put into question following the Florida Supreme Court's 2008 decision in Essex v. Zota.

A similar Senate bill (SB 1894) may be reviewed today by the Florida Senate.

Pennsylvania Considers Expanding Export List

The Insurance Commissioner of Pennsylvania is soliciting comments regarding expanding the export list. The Commissioner proposes to amend the May 24, 2008, list to add the following:

• Animal rides
• Crane and rigging contractors (liability and physical damage only)
• Crop dusters (aircraft liability and aircraft hull coverage only)
• Fuel and explosive haulers (excess auto liability and auto physical damage only)
• Hazardous waste haulers (excess auto liability and auto physical damage only)
• Hazardous waste storage and disposal (liability only)
• Products liability (monoline) for the manufacturing of: Pharmaceuticals, Aircraft and component parts, Automotive and component parts, Farm and industrial equipment, Petrochemicals, Firearms, Medical equipment
• Products recall (monoline) for the manufacturing of: Pharmaceuticals, Aircraft and component parts, Automotive and component parts, Farm and industrial equipment, Petrochemicals, Firearms, Medical equipment

Persons wishing to comment on the Commissioner's proposal may submit a written statement by May 3, 2009. Each written statement must include sufficient detail and relevant facts to inform the Insurance Department of the exact basis of the statement.

Written statements should be directed to Cressinda Bybee, Office of Corporate and Financial Regulation, Insurance Department, 1345 Strawberry Square, Harrisburg, PA 17120, fax (717) 787-8557, cbybee@state.pa.us.

Formal notification of any changes will be published in the Pennsylvania Bulletin after the 15-day comment period ends on May 1, or a notice will be published stating that the May 24, 2008, list remains in effect.

Zota Fix Moves Forward in Florida

Legislation to clarify the surplus lines regulatory status in Florida appears headed toward a full vote in the Florida House this week and the Florida Senate next week.

House and Senate committees acted favorably on bills that would restore the industry's exemption from state regulation of its forms and policies that was put in questions following the 2008 Florida Supreme Court's decision in Essex v. Zota.

The House bill (HB 853) and Senate bill (SB 1894) are now expected to be voted on by next week. While the bills would restore the industry's regulatory exemption retroactive to Oct. 1, 1988 some new requirements would be imposed, according to the Insurance Journal.

Spots Remain in E&S School

There are still spots available in the NAPSLO E&S School, scheduled for June 23-26 in St. Louis. The cost of the school is $1,200 and the registration deadline is May 15. Forms are available to download from the website.

The curriculum focuses on five segments: Risk Takers-and various markets; Distribution System - purpose & variations; MGAs and Brokers - managing the business; Market Dynamics - changing environments; and Cops - regulatory agencies.

In addition to the above topics, Steven DeCarlo of AmWins will present Perspectives From the Top, and there will an Executive Panel featuring:

• Ron Helveston - CRC Alabama
• Letha E. Heaton - Markel
• Tim Makowski - Specialty Lines Underwriters
• Robert Lala - Liberty International Underwriters

Registration Requirements
The NAPSLO E&S School is designed for insurance professionals with less than five years experience in the surplus lines industry. Persons with more than five years surplus lines experience are encouraged to attend the NAPSLO Advanced School, offered each Fall.

Hotel Accommodations
Attendees will stay at The Parkway Hotel, 4550 Forest Park Blvd., located on the campus of Washington University Medical Center.

Session Location
The Eric P. Newman Education Center is within walking distance of the hotel. After hotel check-in, attendees should stop by the NAPSLO registration desk (in the hotel lobby) to pick up class materials. All sessions will take place at the Newman Education Center.

NAPSLO Launches New Website

NAPSLO has unveiled its redesigned web site (www.napslo.org), featuring richer content, more timely news and additional resources designed to position the site as a central source of information about the Excess and Surplus Lines industry.

Web site improvements begin on the home page where visitors and members can find the latest NAPSLO and E&S news, an event “Schedule at a Glance” and a Video Center, which currently includes a video on recent legislative activity and U.S. Senate Banking Committee testimony by NAPSLO Executive Director Richard Bouhan. In addition to the current content, a redesigned “Careers” section is due in coming months.

“With richer content and more dynamic navigation, the new web site is and will continue to grow as a source of information not only for our members, but also for everyone in the insurance industry looking for information on NAPSLO and the E&S Lines industry,” said John Wood, NAPSLO President. “With everything from legislative updates to career information, this web site will help position NAPSLO as the industry leader.”

The web site features new subject areas on NAPSLO education and schools, legislation and regulation, upcoming events and the NAPSLO blog. An enhanced Newsroom features NAPSLO newsletters, E-news, news releases, breaking news, legislative and Derek Hughes/NAPSLO Educational Foundations news, as well as video and the organization’s annual report.

The site also includes a section on NAPSLO’s “Wholesaler Value” education and awareness campaign launched in the latter half of 2008 to increase awareness of the value that wholesalers bring to retail insurance agents and corporate risk managers in placing E&S lines coverage.

“Given the current market, it’s more important than ever that retail agents and brokers, and risk managers understand that wholesale brokers have the expertise, experience and knowledge to place E&S lines,” Wood said. “We expect the new NAPSLO web site to bring even more attention to our Wholesaler Value campaign and give our members information on how they can get involved.”

NAPSLO Optimistic About NRRA Passage After Capitol Hill Visit

NAPSLO leaders said they were optimistic about passage of the Nonadmitted and Reinsurance Reform Act (NRRA) after more than 20 NAPSLO representatives visited with Members of the Senate Committee on Banking, Housing and Urban Affairs on Tuesday to discuss surplus lines issues.

During the meetings, NAPSLO representatives spoke with Senator Evan Bayh (D-IN), who along with Sen. Mel Martinez (R-FL), plan on introducing a version of NRRA. The visits were part of NAPSLO’s fourth annual “Day on the Hill” and members representing NAPSLO brokers and insurers met with almost all Members or staff on the Senate Banking Committee, and also with Leadership on the House Financial Services Committee.

"With the leadership of Senators Bayh and Martinez on surplus lines reform, there is tremendous hope that this important piece of legislation will pass," said NAPSLO President John Wood. “This bill was approved unanimously by the House of Representatives the past two sessions and based our discussions with Senators and Representatives this week we are encouraged that the bill will be introduced and passed by Congress.”

The Nonadmitted and Reinsurance Reform Act (NRRA) 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.

“We believe this bill will solve a number of regulatory problems by establishing federal standards for state regulation, while retaining the state regulation that avoided many of the problems seen in the recent crisis,” said NAPSLO Executive Director Richard Bouhan. “The bill enjoys broad support within the industry and we look forward to its passage.”

In February, Rep. Dennis Moore (D-KS) and Rep. Scott Garrett (R-NJ) of the House Committee on Financial Services announced that they would take the lead in introducing the NRRA in the House. The NRRA is similar to bills passed by the House in the 109th and 110th Congress. The NRRA was also introduced in the Senate in the 110th Congress and the Senate Banking Committee discussed the bill in a hearing on insurance regulation in July of 2008. Chairman Dodd indicated his intent to move the bill at last summer's hearing but the financial crisis prevented further consideration of the bill by the Senate in 2008.

“We are encouraged by our discussions with Members of Congress and believe the bill has a good chance to be approved,” said Maria Berthoud of B&D Consulting, which represents NAPSLO in Washington. Berthoud added “the new leadership of Senator Bayh has given the bill added momentum."

NAPSLO encouraged by planned reintroduction of NRRA in Senate

NAPSLO officials said they are encouraged by the planned early reintroduction of the Nonadmitted and Reinsurance Reform Act of 2009 in the Senate and hope that the bill will be approved by the 111th Congress.

Senators Evan Bayh (D-IN) and Mel Martinez (R-FL), members of the Senate Committee on Banking, Housing and Urban Affairs, announced today that they will introduce a version of the Nonadmitted and Reinsurance Reform Act (NRRA) of 2009.

"We are thrilled to have garnered the leadership of Senator Bayh, a senior Democratic member of the Senate Banking Committee, to help lead the effort on surplus lines reform this year along with the continued excellent leadership of Senator Martinez," said Maria Berthoud of B&D Consulting, who represents NAPSLO in Washington, D.C.

"The new leadership of Senator Bayh shows the momentum the NRRA has this year. With the leadership of Senators Bayh and Martinez, we are optimistic about the bill's chances for passage." said NAPSLO President John Wood. “This bill was approved unanimously by the House of Representatives the past two sessions and the early introduction in the Senate offers encouragement that the bill will be approved by the 111th Congress and signed into law.”

The Nonadmitted and Reinsurance Reform Act (NRRA) 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.

In February, Rep. Dennis Moore (D-KS) and Rep. Scott Garrett (R-NJ) of the House Committee on Financial Services announced that they would take the lead in introducing the NRRA in the House. The NRRA is similar to bills passed by the House in the 109th and 110th Congress. The NRRA was also introduced in the Senate in the 110th Congress and the Senate Banking Committee reviewed the bill during hearings on insurance regulation in late July of 2008. The bill received a favorable hearing however legislation regarding the financial crisis prevented further consideration of the bill by the Senate in 2008.

NAPSLO officials said they hope to see the bill introduced soon and believe there is continued strong industry support for the bill, as was stated during the Senate Banking Committee hearings in 2008.

“The bill enjoys broad support within the industry and we believe it will solve a number of regulatory problems by establishing federal standards for state regulation, yet will retain state regulation which avoided many of the problems seen in the recent crisis,” said NAPSLO Executive Director Richard Bouhan.