Tuesday, February 24, 2009

John Edack Elected Chairman of the Surplus Line Association of California

The members of the Surplus Line Association of California (SLA) elected John Edack as their Chairman during the SLA 2009 Annual Meeting held January 29 in Beverly Hills. Mr. Edack is the Executive Vice President of Arch Specialty Insurance Agency, Inc., in San Francisco, California.

Elected Vice Chairman was Les Ross of Crump Insurance Services, Inc. Elected Secretary-Treasurer was Patrick Hanley of Socius Insurance Services.

In addition, the following 10 Executive Committee members were elected: Warren Stanley of Wholesale Connection Insurance Services, Pamela Quilici of Crouse & Associates, Frank Cravens of M.J. Hall & Company, Inc., Doris Barnett of Colemont Insurance Brokers, Anne McNally of ABD Insurance Services Financial, Gerald J. Sullivan of Gerald J. Sullivan & Associates, Inc., Davis Moore of Worldwide Facilities, Inc., Chris Brown of Brown & Riding Insurance Brokers, Kris Bauer of AmWINS Insurance, and Phil Mazur of Swett & Crawford.

Thursday, February 19, 2009

Surplus Lines Law Group Meeting Set for March 26-27 in San Francisco.

The 2009 Winter Meeting of the Surplus Lines Law Group will take place on March 26-27, 2009 in San Francisco.

A welcome reception and dinner will take place on Thursday evening, March 26th and the meeting begins on the morning of Friday, March 27th at the Stanford Court Marriott, 905 California Street. The meeting will conclude after a buffet lunch at noon.

Online registration is available for the meeting through Lewis Brisbois Bisgaard & Smith LLP and an invoice will be sent out to the address provided after the event is complete. Invoice amounts will vary depending on which activities selected.

A limited number of rooms at the Stanford Court are available at a daily rate of $199 and reservations can be made through the hotel’s central reservations department at 415-989-3500. Mention the “Surplus Lines Law Group” to get the discounted rate. You can obtain additional information about the hotel is available through the hotel's website.

Thursday, February 12, 2009

Florida House Introduces Bill to Nullify Zota Decision

A bill that would nullify the Florida Supreme Court Decision in Essex vs. Zota and prevent surplus lines carriers from being subject to certain regulation has been introduced in the Florida House of Representatives.

House Bill 853 specifies that provisions of Chapter 627 do not apply to surplus lines insurance and that the act will operate retroactively to October 1, 1988.

In 2008 the Zota case ruled that a section of Chapter 627 of the Florida Insurance Code applied to surplus lines policies, notwithstanding the fact that Chapter 627 contained a provision that specifically stated “this chapter does not apply to surplus lines insurance.” Despite this plain language, the Florida Supreme Court concluded the language was a “scrivener’s error” (legal clerical error). There is some disagreement over the interpretation of the Zota case, but some believe it could be read to mean that all of Chapter 627 could applies to surplus lines insurance.

An informal industry “working group” has been working toward a legislative solution for the problems caused by the decision and the bill introduced could solve the issue.

Wednesday, February 11, 2009

NAPSLO applauds Reps. Moore & Garrett taking lead in introducing Surplus Lines Bill in House of Representatives

NAPSLO applauded Rep. Dennis Moore (D-Kan.) and Rep. Scott Garrett (R-NJ) for announcing that they would introduce the Non-Admitted and Reinsurance Reform Act of 2009 in the U.S. House of Representatives and indicated they hoped the Senate would follow suit.

“We believe that the bill would make the surplus lines marketplace more efficient by facilitating the payment of surplus lines premium taxes and eliminating unnecessary duplicative compliance requirements on surplus lines multi-state risks,” said NAPSLO President John Wood. “NAPSLO is pleased to see Rep. Moore and Rep. Garrett take the lead to have the bill introduced in the House of Representative and we are hopeful the bill will soon be introduced in the Senate.”

Rep. Moore and Rep. Garrett are members of the House Committee on Financial Services.

The Non-Admitted and Reinsurance Reform Act 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.

“We believe that once this legislation is enacted it will help provide needed uniformity and consistency in insurance regulation at the state level,” said NAPSLO Executive Director Richard Bouhan. “The problems with financial regulation uncovered last fall were not at the state level and this bill will only improve state regulation of insurance.”

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.

“We have been meeting with members of the House and Senate and hope the bill will be introduced in the Senate and that both houses will pass the bill,” said NAPSLO’s Washington D.C. representative, Maria Berthoud of B&D Consulting.

Thursday, February 05, 2009

Surplus Lines Premiums Drop 8.2% in 2008

Surplus Lines premiums dropped by 8.2% in 2008 in the 14 states with stamping offices or service offices, according to statistics from the Surplus Lines Stamping Office of Texas.

Overall premiums declined from $23.057 billion to $21,168 billion in the 14 states in 2008 (Minnesota's stamping office was operational Jan. 1, 2009). While most states reported declines in premiums, three states reported increases with Oregon seeing a 20% increase. Pennsylvania reported a 1.6% increase and Utah also saw a small increase of 1.2%.

Montana saw the largest percentage decline in premiums (-21.2%) while six states saw declines of 10 to 20 percent (Arizona -17.5%, Idaho -12.2%, Nevada -18.6%, New York -15.5%, Texas -11.9% and Washington -16.3%).

California (-2.4%), Florida (-7.9%), Illinois (-2.6%), and Mississippi (-9.1%) reported drops in premiums of less than 10%.

The number of items processed by the offices decreased by 3.6%, going from 3,431,844 in 2007 to 3,309,925 in 2008.

Tuesday, February 03, 2009

NAPSLO President Praises NAIC CEO Pick

The appointment of former Iowa Insurance commissioner and NAIC President Therese Vaughan as the Chief Executive Officer of the NAIC appears to be the “right action, with the right person, at the right time, at the right place,” stated NAPSLO president John Wood.

Vaughan, who will be based in the NAIC’s offices in Washington, D.C., holds a doctorate degree from the Wharton School of the University of Pennsylvania, is currently a professor of insurance and actuarial science at Drake University in Des Moines, Iowa. She served as Iowa Insurance Commissioner for 10 years (1995-2005) and NAIC president in 2004 and her appointment “brings credibility and knowledge to her new NAIC role and will be a strong advocate before Congress and the administration for the cause of state insurance regulation,” Mr. Wood added.

With Congress now considering a complete restructuring of the regulation of financial services, “the need for state insurance regulators to have a knowledgeable and articulate voice to educate Congress on how state regulation functions and how consumers benefit from it, has never been greater,” Mr. Wood said.

“On behalf of NAPSLO and its entire membership, I offer Dr. Vaughan our congratulations on her appointment as CEO of the NAIC and pledge NAPSLO’s best efforts to work with her and her colleagues as she advances the cause of state insurance regulation, Mr. Wood stated.