NAPSLO President Letha Heaton was featured in the 2010 Business Insurance's Women to Watch in the December 6 issue of the magazine.

Ms. Heaton, Vice President of Marketing for Admiral Insurance Co. of Cherry Hill, NJ was among the women featured in the annual feature which identifies and recognize individuals doing exceptional work in risk management, benefits management, commercial insurance and related fields.

Ms. Heaton was elected President at the 2010 NAPSLO Annual Convention in Atlanta and has served on the NAPSLO Board of Directors since 2004.

Ms. Heaton was named Vice President of Marketing for Admiral Insurance Company in 2009. Previously she was with Markel since 1997.

Registration Open for NAPSLO Mid-Year

Registration is now underway for the 2011 NAPSLO Mid-Year Leadership Forum, February 23-26 at the Naples Grande Beach Resort.

To register for the meeting go to http://midyear.napslo.org and enter your NAPSLO member ID number. The registration fee for delegates is $795 and the fee for spouses is $425. Registration fees will increase on Jan. 20 to $895 and $475.

At the end of the registration process there will be a link for attendees to reserve a hotel room at the Naples Grande Beach Resorts, a Waldorf-Astoria hotel. Rooms are $259 plus a $10 daily resort fee, which includes free wireless access in the rooms.

Mid-Year meeting programs get underway on Wednesday, February 23 at 6:00 p.m. with the Opening Reception.

On Friday morning there will be an Executive Session program featuring Stephen Harvill from Creative Ventures discussing "What Keeps You Up At Night" with several industry leaders, including Joel Cavaness, Risk Placement Services; Tony Markel, Markel Corporation, and Kevin Westrope of Westrope. Mr. Harvill led the leadership panel discussion at the 2010 Mid-Year meeting.

Following the Executive Session program the annual Derek Hughes/NAPSLO Educational Foundation Golf Invitational will take place that afternoon at the Naples Grande Golf Course. In addition to the golf event there are also airboat tours of the backcountry and a catamaran sailing event. Attendees can register for all of the events online.

The Mid-Year programs end on Friday night with a cocktail hour at 6:00 p.m. to allow attendees to network with other attendees prior to going out to dinner.

NAPSLO Applauds NCOIL's Actions on Tax Compact, NRRA Compliance

NAPSLO applauds the adoption by the National Conference of Insurance Legislators (NCOIL) of a revised version of the Surplus Lines Multi-State Insurance Compact (SLIMPACT) and also the adoption of a resolution urging the states to amend their insurance laws to have them conform to the recently passed surplus lines law reforms. NCOIL took both actions at its recent 2010 annual meeting in Austin, TX.

The new compact is a smaller version of SLIMPACT, which NCOIL adopted in 2007. The new compact is designed to fulfill the compact provisions of the Nonadmitted and Reinsurance Reform Act (NRRA) which Congress passed and the President signed last July as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“NAPSLO supports NCOIL’s action in approving what is known as SLIMPACT-lite and NCOIL should be commended for responding to the concerns the NAIC expressed about SLIMPACT and creating a revised version that addresses the problems the NAIC had with SLIMPACT,” said Richard Bouhan, Executive Director of NAPSLO.

“SLIMPACT-lite is a workable compact that meets the requirements of the NRRA in ways that the NAIC compact proposal does not. NAPSLO believes it will be well received by state legislatures,” stated Steven Stephan, Government Relations Director of NAPSLO.

Also at its annual meeting, NCOIL adopted the resolution urging the states to amend their insurance laws to have them conform to the NRRA by the law’s effective date of July 21, 2011.

NAPSLO is most appreciative of NCOIL’s effort of encourage the state’s to act quickly to have their laws amended and conform to the NRRA requirements, Mr. Bouhan said.

NAPSLO, The Council, AAMGA Urge States to Bring Laws Into Compliance with NRRA

NAPSLO, the American Association of Managing General Agents (AAMGA), and The Council of Insurance Agents & Brokers (The Council), released a joint letter Tuesday urging state legislators and insurance regulators to work as swiftly as possible to bring their codes and regulations into compliance with the Nonadmitted & Reinsurance Reform Act, which is scheduled to go into effect July 21, 2011.

According to the letter, “failure to act will result in confusion for regulators and licensees alike, arising from the existence of inapplicable, inaccurate and unenforceable code and regulation.”

The NRRA language was included as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law on July 21, 2010.

“In a short eight months, many of the existing state laws and regulations addressing placements of non‐admitted insurance will be preempted by federal law,” the letter stated.

The three industry trade groups outlined six potential areas where NRRA compliance will require states to address their laws:

• Ensuring surplus lines premium tax is applicable on surplus lines policies only in the home state of the insured;
• Producer licensing and surplus lines placement laws can apply only when the state is the “home state” of the insured;
• Eligibility criteria for U.S.-based (foreign) surplus lines insurers must be amended to require the insurer to be licensed in the domiciliary state and meet the greater of $15 million or the state's capitalization requirement;
• Eligibility criteria for alien surplus lines insurers must be amended so any insurer listed on the NAIC / IID Quarterly Listing is eligible;
• The NRRA definition of an “exempt commercial purchaser” must be incorporated into state law; and
  
• States must allow surplus lines brokers to participate in the National Insurance Producer Database.

Each of the states would need to conduct a comprehensive review of its code and regulations to identify inconsistencies with the NRRA, the authors wrote.

NAPSLO, the AAMGA and The Council said they would help regulators and legislators realize the uniform and more efficient standards mandated by the NRRA as they draft and pass appropriate, consistent and efficient legislation and regulatory revisions.

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Industry Groups Say They Won't Support NIMA

In a letter to the Chair of the Surplus Lines Implementation Task Force, NAPSLO and five other insurance trade associations notified the Task Force they would not support the legislative proposals known as the Nonadmitted Insurance Multi-State Agreement (NIMA) or its predecessor, the Surplus Lines Insurance Multi-State Agreement (SLIMA).

The two surplus lines tax collection compacts are being considered by state insurance regulators as part of efforts to come into compliance with the Nonadmitted Reinsurance and Reform Act, scheduled to become effective on July 21, 2011.

NAPSLO, the American Insurance Association (AIA), Risk and Insurance Management Society, Inc., (RIMS); the National Association of Mutual Insurance Companies (NAMIC), the American Association of Managing General Agents (AAMGA), and the Excess Line Association of New York (ELANY) sent a letter on Monday to James Donelon, Louisiana Insurance Commissioner and chair of the Surplus Lines Implementation Task Force, stating the organizations would not supports the tax compact proposals.

The NIMA proposal was approved by the Task Force on Oct. 26, 2010 however the group said they could not support the proposal for four reasons: NIMA frustrates the spirit and letter of the NRRA; it violates the NRRA requirement that "no state other than the home state . . . may require any premium tax payments for nonadmitted insurance"; it would create unnecessary and burdensome data reporting by brokers; and it fails to create a clearinghouse infrastructure.

“The clear intent of the Nonadmitted and Reinsurance Reform Act (NRRA) was to create a streamlined tax system that involved uniform requirements, forms and procedures. NIMA not only fails to establish uniform requirements, forms and procedures, but instead continues, by contract, the burdensome system that Congress sought to eliminate with the NRRA,” the letter said.

Many of the industry trade organizations are urging support of the Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT) as an interstate compact which would comply with the new federal law and also ease the regulatory burdens on E&S brokers when placing multistate risks.

Lloyd's Presents Programs on Digital Risks

Digital Risks: Trends, challenges and opportunities for business will be the subject of Lloyd's 360 Risk Insight event on digital risks on Wednesday, Dec. 1, 2010 in San Francisco.

Expert speakers from government, the technology sector and the insurance industry will examine the threats posed by cyber risks and discuss how business can prepare for and manage these risks.

360 Risk Insight runs a series of informative events, covering our key themes of climate change, terrorism and liability, as well as other emerging risks such as nanotechnology and pandemics. Find details of upcoming events or review past events, including keynote speeches, speakers’ biographies and video and audio snippets of the event.

For registration and more event information see the Lloyd's website.

New Jersey Delays Change in Fees

The New Jersey Insurance Department has notified surplus lines producers that it has not completed updating rules on fees and that they should continue to adhere to the $50 fee limitation until further notice.

The department said it is continuing to work on rules to change the limitation on fees surplus lines producers may charge an originating broker from $50 to an amount specified by the Commissioner of Banking and Insurance.

In July, New Jersey law was amended to be effective October 1, 2010, to change the limitation on fees surplus lines producers may charge an originating broker from $50 to an amount set forth by the Commissioner of Banking and Insurance pursuant to regulation.

Registration Deadline Extended for NAPSLO's Advanced School

The registration deadline for the NAPSLO Advanced School, November 13-16, in St. Louis at the Eric P. Newman Education Center has been extended as a limited number of spaces remain.

The brochure and registration materials for the school can be downloaded from the NAPSLO website.

NAPSLO’s Advanced School offers a comprehensive look at surplus lines and provides the opportunity to meet with others in the industry. Completion of the NAPSLO E&S School is not a prerequisite to attend the Advanced School. The Advanced School is approved for 12 hours of CE credit in selected states.

The curriculum focuses on seven segments: The Broker/Underwriter Relationship - A discussion of the relationship between underwriters and brokers; Avoiding the Sting - Recognizing scams in the non-admitted market; Changes Following the Adoption of the Non Admitted & Reinsurance Reform Act - A discussion of the NRRA and other federal initiatives; The Claims Experience - A look at the surplus lines claims process, coverage and liability issues; Conquering Financial Statements - Reviewing financial documents, accounting and reporting procedures; The Devil's in the Details - Standards and procedures to reduce errors and omissions exposures; and Reinsurance & the Specialty Marketplace - Current issues, trends and the impact on the marketplace.

In addition, Matt Nichols, Chair of NAPSLO’s International Committee, will lead executives from the London, Bermuda and U.S. markets to discuss international issues during the International Panel; and Nicholas Cortezi, Chief Executive Officer, All Risks, Ltd. will present the Perspectives from the Top presentation.

California Increases Capital & Surplus Requirements

California Governor Arnold Schwarzenegger signed into law on Sept. 27 a bill that will increase the capital and surplus requirements for nonadmitted insurers.

Assembly Bill 1708 goes into effect on January 1 and it increases minimum capital and surplus requirements for nonadmitted insurers and insurance exchanges from $15 million to $45 million, with the amount of cash surplus increased from $15 million to $25 million.

Nonadmitted insurers on the list of eligible surplus line insurers who do not meet the capital and surplus requirements as of January 1, must have at least $30 million of capital and surplus as of December 31, 2011, and at least $45 million as of December 31, 2013.

Technology Program on Data Transfer Added to Convention

An update on current efforts to standardize data transfer between U.S. and London firms will be the subject of a special presentation added to the programming at the 2010 NAPSLO Annual Convention in Atlanta.

The program, London Technology Update – Standardizing Data Transfer Across the Pond, is set for Monday, October 11 from 1:00-2:00 p.m. (Convention registration opens that Monday at 9:00 a.m. and the Opening Reception is in the evening.)

The technology program will provide attendees a review of proposals by Lloyd’s of London to standardize data collection between U.S. and London firms; recent efforts by the Retail Agent E&S Working Group to involve London firms; and the Working Group's efforts to improve data transfer between firms in the U.S.

Adam Stafford of Lloyd’s will review current data standardization efforts in London and John Diebler & Angelyn Treutel, co-chairs of the Retail Agent E&S Initiative (a collaboration of NAPSLO, AAMGA, ACT and ACORD) will review the Joint Working Group's recent activities, including Lloyd’s joining the Joint Working Group, the establishment of a new Lloyd’s subgroup, accomplishments and goals.

A.M. Best to Review State of Industry During Sept. 20 Webinar

Availability, pricing and coverage trends will be discussed as Best's Review magazine hosts a webinar examining the current state of the excess and surplus markets on Sept. 20 from 2 p.m. to 3 p.m. EDT. Register at no charge by clicking the State of the Surplus Lines Market Link at http://www.ambest.com/conferences/webinars.html

Panelists from the specialty markets will discuss the impact of mergers and acquisitions and other developments affecting this fast-moving and important sector of the property/casualty insurance industry. The highlights of a new special report from A.M. Best Co. and the Derek Hughes/NAPSLO Educational Foundation on the state of the excess and surplus markets will also be reviewed.

The webinar will be presented in live video streaming and audio-only formats. The webinar panelists include:

• Matthew F. Power, Executive Vice President, Lexington Insurance Company
• Steven DeCarlo, Chief Executive Officer, Amwins
• J. Neal Abernathy, President & Chief Executive Officer, Swett & Crawford
• Joseph Roethel, Assistant Vice President, Property/Casualty, A.M. Best Co.
  

Topics will include:

• How companies in the excess and surplus sectors fared in the past year;
• How new federal legislation is poised to shape the sector;
• How the distribution environment is changing; and
• Emerging opportunities for agents, brokers and other insurance professionals.
  

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 webinar will be featured in an upcoming issue of Best's Review.

For more information about the webinar, please call (908) 439-2200, ext. 5561, or e-mail lee.mcdonald@ambest.com.

New Jersey Changes Limits on Fees

Effective October 1, 2010, New Jersey law was amended to change the limitation on fees surplus lines producers may charge an originating broker from $50 to an amount set forth by the Commissioner of Banking and Insurance pursuant to regulation.

The New Jersey Department recently issued a bulletin is to remind surplus lines producers that the $50 fee limitation remains in effect until October 1, 2010. The Department of Banking and Insurance said it anticipates proposing rules to implement the statute as amended later this year. The Department will issue further guidance on the implementation of the statute prior to October 1, 2010 based on the content of the rulemaking to be proposed.

Downloading Data to Retail Agents in the E&S Market Subject of Sept. 9 Webinar

The Retail Agent E&S Joint Industry Initiative is sponsoring a webinar on Thursday, September 9 on Opportunities for Downloading Data to Retail Agents in the E&S Market.

You can reserve a spot on the Webinar seat now at: https://www1.gotomeeting.com/register/588464784. The webinar will highlight developments in downloading data from MGAs/Brokers/E&S Carriers to Retail Agents and will focus on the benefits of using Download technology, how Download can work for MGAs/Brokers/E&S Carriers, how to avoid pitfalls when implementing Download, and any other questions that arise.

Sponsored by the Retail Agent E&S Joint Industry Initiative (a collaboration of AAMGA, ACORD, ACT & NAPSLO), the session will feature presentations by Neal Quiros of IVANS, Doug Johnston of Applied Systems, and Nellie Massoni of Vertafore. After registering you will receive a confirmation email containing information about joining the Webinar.

RAA offers program on Financial Reporting & Analysis

The Reinsurance Association of America's ReFinance program will be held in New York City, October 28-29, 2010, and as an Association Partner, NAPSLO members will receive an Association Partner registration rate of $1,250 for the two-day program.

The program ReFinance: the ABCs of Financial Reporting and Analysis for Property/Casualty Insurers and Reinsurers will take place on October 28-29, at the New York Helmsley Hotel in New York City.

ReFinance is designed for insurer and reinsurer financial professionals and also for non-financial professionals from underwriting, claims, compliance, law and marketing disciplines to learn the fundamentals of property/casualty insurance and reinsurance financial analysis and reporting.

Attendees will: learn to read and understand the statutory Annual Statement and its schedules; use the statutory Annual Statement as a tool for financial analysis; learn the differences in the various accounting systems; develop a working knowledge of key financial and accounting terms; analyze and interpret comparative financial statements; compute and interpret financial ratios.

The agenda, brochure and registration information is online. Attendees earn CLE, CPD, and CPE credits for attending ReFinance. Questions? Contact Ann-Marie Mwombela at 202.783-8385 or Mwombela@reinsurance.org.

Replay of Webinar on Surplus Lines Reforms Available

A replay of the NAPSLO sponsored a webinar - Surplus Lines Reforms: What You Need to Know About the New Federal Law - on the implementation of the surplus lines provisions of the Non-Admitted and Reinsurance Reform Act is now available to view and the PowerPoint presentations used in the webinar are available to download.

The August 19th webinar reviewed what agents, brokers, carriers and regulators need to know about regarding implementing the Non-Admitted & Reinsurance Reform Act, contained in the financial services reform bill approved in July 2010.

The surplus lines reform language mandates that beginning one year after the bill is signed into law the home state of the insured will be the only state with jurisdiction over the transaction and the only state to which a broker must pay taxes.

Webinar on Surplus Lines Legislative Reforms is Thursday, Aug. 19

Information on the surplus lines reforms recently signed into law, the impact of the new law on surplus lines brokers and carriers, and how the reforms will be implemented will be the subject of a NAPSLO sponsored webinar on Thursday, August 19 at 1:00 p.m. CDT.

The webinar will review what agents, brokers, carriers and regulators need to know about regarding implementing the Nonadmitted & Reinsurance Reform Act, contained in the financial services reform bill approved in July 2010.

The surplus lines reform language mandates that beginning next July the home state of the insured will be the only state with jurisdiction over the transaction and the only state to which a broker must pay taxes.

You can register online for the webinar. There is no charge for the webinar. You will receive a confirmation email with the phone number to call on the day of the webinar and the website address to view the presentations. If you have questions regarding registration, please contact Mike Ardis at NAPSLO at (816) 741-3910.

Webinar Topics will include:

• Introduction and Overview of the NRRA surplus lines reforms
• What will the NRRA reforms mean for surplus lines brokers?
• When do the NRRA reforms become effective?
• What do the NRRA terms “principal place of business” and “principal residence” mean?
• Which state is the home state under the NRRA if 100% of the insured risk is outside of the home state?
• If affiliates are insured under a surplus lines policy, which state taxes the premium under the NRRA?
• How will the NRRA impact surplus lines insurance companies?
• How will the NRRA impact exempt commercial purchasers?
• What is the "tax allocation report" required by the NRRA?
• What is the next step for implementation of a tax system?
• What happens if the states fail to implement a system to allocate taxes?
  

The webinar will include presentations from:

• Richard Bouhan, NAPSLO Executive Director
• Dan Maher, Executive Director, Excess Lines Association of New York
• Michael Byrne, Partner, Dewey and Leboeuf
• Libby Baney, B&D Consultants, NAPSLO Washington D.C. Lobbyist
• Steve Stephan, NAPSLO Director of Government Relation

Surplus Lines Stamping Offices Report Premiums Down 11.1% in First Half of 2010

Surplus lines premiums reported by the 14 stamping offices declined by more than $1 billion, or 11.1 percent, in the first half of 2010, however the number of items processed only dropped by 1.6 percent, according to a report by the Surplus Lines Stamping Office of Texas.

Overall the stamping offices reported approximately $9.16 billion in premium volume for the first six months of 2010, compared to $10.3 billion for the same time period in 2009.

Only four states (Idaho, Minnesota, Mississippi, and Oregon) reported increases while seven states reported decreases of more than 10 percent. Montana’s stamping office closed in 2009 so did not report any premium in 2010. Florida reported the most premium at $2.35 billion, followed by California at $2.25 billion.

Illinois, Minnesota, Mississippi, Nevada and Oregon reported increases in the number of items processed by the stamping offices. Texas and New York reported decreases in items of less than 1 percent.

A copy of the report is available to download.

Technology Group Conducting Survey on Next Steps

The Retail Agent - E&S joint industry technology initiative (led by ACT, NAPSLO, AAMGA and ACORD) is looking for assistance determine priorities for reviewing the next set of supplemental applications to be reviewed for the E&S/specialty/program markets.

Several applications have been reviewed and suggested changes have been forwarded to the ACORD working group charged with developing and modifying forms.

To assist with this effort, the initiative is asking retail agent and brokers, MGAs, wholesale brokers, and E&S or specialty carriers to take a very brief survey to help the working group determine priorities.

Please click the link below to access the survey and also review information on the Retail Agent - E&S joint industry initiative working group and supplemental forms that have been developed to-date - http://www.zoomerang.com/Survey/WEB22AUJRY8TMT.

You can sign up to become a participant in the Initiative through the survey.

Surplus Lines Reforms Sponsor Clarifies Intent of Law with Entry in Congressional Record

Rep. Dennis Moore, a main sponsor of the NonAdmitted Reinsurance and Reform Act, which was included in the financial services legislation recently signed into law, entered remarks into the Congressional Record on Thursday to clarify the provisions of the bill impacting surplus lines.

He noted that under the new bill surplus lines premium taxes are to be paid to the "Home State" (and to no other state); that the placement of all nonadmitted insurance, including surplus lines insurance, shall be subject solely to the statutory and regulatory requirements imposed directly by the insured’s ‘‘Home State;" and that States adopt uniform requirements and forms regarding payment and allocation of premium taxes.

The following is Rep. Moore's entry on Thursday in the Congressional Record.

"Madam Speaker, as a House conferee and the chief sponsor of H.R. 2571, the Nonadmitted and Reinsurance Reform Act, that was included in the conference report for H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act, I wanted to make one important clarification of intent on the final language. The President signed the Dodd-Frank Act into law yesterday.

Section 521(a) of the Dodd-Frank Act is intended to require the broker to pay or remit all tax in a surplus lines transaction to the ‘‘Home State’’ of the insured as defined in the Act and to no other state or political subdivision of any state. If other states are to receive a portion of the tax payment, the Act provides that the states may enter into a compact or otherwise establish procedures to allocate among the states the premium taxes paid to an insured’s‘ ‘Home State.’’

Further, it is the intention that as a result of this Act, each State adopt nationwide uniform requirements, forms, and procedures—such as an interstate compact—that provides for the reporting, payment, collection, and allocation of all premium taxes for surplus lines insurance as well as all nonadmitted insurance in the insured’s ‘‘home state’’. Uniformity in the taxation of surplus lines and nonadmitted insurance will be of great benefit to insurance consumers, brokers and the states.

In addition, under Section 522(a) of the Dodd-Frank Act, the placement of all nonadmitted insurance, including surplus lines insurance, shall be subject solely to the statutory and regulatory requirements imposed directly by the insured’s ‘‘Home State’’ and no other state. It is the intention that surplus lines and nonadmitted insurance transactions, particularly when the insurance covers risks in more than one state, be within the sole province of the insured’s ‘‘Home State.’’

Louisiana Changes Broker License Renewal to Biannualy

The Louisiana Legislature and Governor have approved a bill that changes the length of a license for a surplus lines broker from being renewed annually to biannually.

Senate Bill 669 goes into effect on August 15 and now reads that a "license shall remain in force until the biannual renewal date."

NAPSLO Officials Note Goal of Reforming Surplus Lines Tax Payment Laws Realized; NAPSLO to Host Webinar on Reform Implementation

NAPSLO officials are pleased that the industry’s goal to reform and modernize surplus lines regulation and premium tax laws has been accomplished with the signing on Wednesday of the Restoring American Financial Stability Act of 2010 by President Obama.

"NAPSLO is pleased to see its efforts to establish a more rational and efficient method of paying surplus lines taxes and conducting multi-states surplus lines transactions become a reality. NAPSLO’s goal over the next year is to work with the states as they implement the reforms set forth in this legislation,” said NAPSLO Executive Director Richard Bouhan.

To assist members with the changes, NAPSLO is sponsoring a free webinar on the implementation of the surplus lines provisions of the NRRA on Thursday, August 19 at 1:00 p.m. CDT.

The webinar will review what the reforms mean for surplus lines brokers, carriers and exempt commercial purchasers; explain terms such as “principal place of business;” and discuss the possibility of an interstate tax compact.

Panelists will be Dick Bouhan, NAPSLO; Dan Maher, ELANY; Michael Byrne, Dewey and Leboeuf; Libby Baney, B&D Consulting, and Steve Stephan, NAPSLO. To register for the webinar, click on the following link.

New Hampshire increases surplus lines tax from 2% to 3%

New Hampshire announced that an increase in the surplus lines tax from 2% to 3%, effective July 1, 2010.

In addition in May the New Hampshire Insurance Commissioner transferred the electronic Surplus Lines submissions of forms and payment processing operations to OPTins (Online Premium Tax for Insurance), a product of the National Association of Insurance Commissioners ("NAIC").

Surplus Lines Reforms Passed by Senate; NAPSLO to Offer Webinar, Website to Explain New Law

Surplus lines insurance consumers and their broker representatives were big winners with the inclusion of surplus lines modernization provisions in the financial service reform legislation passed by the Senate, today. President Obama is expected to sign the legislation, shortly.

For the full benefits of the law to be realized, however, the states must implement the surplus lines reforms in the way Congress has directed, officials of NAPSLO stated.

"These surplus lines reforms represent a nearly decade-long industry effort spearheaded by NAPSLO to modernize and reform surplus lines regulation. With the legislation now approved by Congress, we look to the states to implement its provisions in the way Congress intends and bring about, on a nationwide basis, the anticipated efficiencies in surplus lines regulation and tax payment mechanisms the legislation promises," NAPSLO President Marshall Kath said.

To assist the industry, regulators and legislators with the implementation process, NAPSLO will host a webinar on Thursday, Aug. 19 at 1 p.m. Central to discuss the new legislation and the changes it will create in the payment and allocation of surplus lines premium taxes as well as compliance requirement for multistate risks. In addition the potential for an interstate compact and the role it would play under the law will be discussed. To register for the webinar, go to https://www1.gotomeeting.com/register/366020064.

In addition, NAPSLO has established a special section on its web site to provide information on the NRRA and its implications.

The surplus lines modernization provisions will make access for insurance consumers to the surplus lines market quicker, more efficient and the payment of surplus lines premium taxes to the states less burdensome for the consumer and broker. The legislation also establishes that only one state, the home state of the insured, can regulate a multistate surplus lines transaction.

"We are gratified that NAPSLO’s hard work has paid off with the enactment of these long overdue reforms. However, the full promise of this legislation will not be realized until the states have implemented through an interstate compact or similar mechanism uniform forms, processes and procedures for collection, payment and allocation of surplus lines premium tax,” stated NAPSLO Executive Director Richard Bouhan.

Currently, the majority of states require payment of an allocated portion of tax on a multistate risk, but several state statutes impose the tax on the entire gross premium of a multistate risk which can create a “double tax” on a portion of the premium in some transactions.

"When the reform language was developed, Congress envisioned the states creating an interstate compact or something like a compact to handle collection, allocation and distribution of surplus lines premium taxes. However, the legislation also establishes that if an interstate compact or similar mechanism is not created and implemented among the states, the surplus lines transaction will be entirely taxed by the ‘home state’ of the insured,” said Maria Berthoud, NAPSLO’s Washington representative. “There was no opposition to this view in either the House or the Senate."

NAPSLO said it will make proper implementation of this legislation in the states its highest legislative priority.

RAA Offers Program on Reinsurance Contracts & Programs

The Reinsurance Association of America is offering NAPSLO members the “Association Partner” registration rate for ReContracts: The Art of Designing Reinsurance Contracts and Programs to be held at the New York Helmsley Hotel in New York City, July 20-23, 2010.

ReContracts is designed for professionals seeking an in-depth treatment of reinsurance contracts. The curriculum includes the influence of the market on contract terms and the impact of specific contract clauses on finance, claims and underwriting operations. Participants design reinsurance programs and use case studies to learn how reinsurance contracts are drafted and how each contract forms a component of a company’s reinsurance program.

Reasons to attend:

• Gain a thorough understanding and working knowledge of reinsurance contracts;
• "Run” an insurance company using Gen Re’s Primary Insurance Management Exercise (PRIME) game;
• Network with instructors and fellow industry professionals;
• Earn continuing education credits—CPA CPE, CPCU CPD and CLE (including ethics credits)
• Network with instructors and fellow industry professionals
• The registration fee is a value
  

ReContracts targets underwriters, contract writers, claims and accounting professionals, attorneys specializing in reinsurance, insurance company professionals, and regulatory staff.

You can review the ReContracts Agenda or register online. Contact Ann-Marie Mwombela at 202.783.8385 or with any questions about registration. Accommodations at The New York Helmsley Hotel are just $199 per night. Contact the hotel at 800-221-4982 to reserve a room and be sure to mention the Reinsurance Association of America room block.

Lloyd's Webinar on Data Exchange Initiatives is Tuesday

A free webinar featuring a review of Lloyd’s of London proposals to standardize data collection from MGAs will take place on Tuesday.

The webinar is entitled “Lloyd’s of London US Distribution Initiatives – Standards and Technology.” It is aimed at MGAs, wholesalers, retail agents, carriers and vendors participating in the E&S program and broker markets.

The Retail Agent E&S Initiative (a collaboration of the IIABA's Agents Council for Technology, AAMGA, NAPSLO and ACORD) set up the webinar on July 13 from 11:00 a.m. to Noon (Eastern) and to register go to https://www1.gotomeeting.com/register/234333792

Participating on the webinar will be Adam Stafford and Sarah Thacker, Lloyd’s of London; Mike Roy, CRC Insurance - Alabama; Angelyn Treutel, Treutel Insurance Agency; John Deibler, JBD Consulting; and Jeff Yates, ACT.

Minnesota to Reduce Stamping Fee on Jan. 1

The stamping fee in Minnesota will decline from 0.25% to 0.08% effective January 1, 2011, according to a recent bulletin issued by the state.

Stamping fees in Minnesota are to be reported and payable semi-annually in August and February using a Stamping Fee Form found on the Association’s website (http://www.mnsla.com) under Documents, then selecting Resources.

In Minnesota a surplus lines licensee is required to electronically submit every insurance policy or contract issued under the licensee’s license to the state SLA for recording and stamping.

NAPSLO Applauds House Passage of Surplus Lines Reforms; Anticipates Quick Senate Action, Bill to be Signed Into Law

NAPSLO representatives applauded the inclusion of surplus lines regulatory reform language in the version of financial services reform legislation passed by the House of Representatives on Wednesday.

"NAPSLO is pleased that the surplus lines regulatory reform language was included in the financial services reform legislation approved by the House and NAPSLO believes that the Senate will adopt these reforms, shortly,” said NAPSLO Executive Director Richard Bouhan. “We believe we are now close to meaningful surplus lines regulatory reform legislation becoming a reality and then the work of implementing this legislation in the states will begin."

The House vote follows negotiations to reconcile the House and Senate versions of financial services reform legislation previously approved. The Senate is expected to take up the bill approved by the House and Senate conference committee following the July 4 recess and it could be signed into law shortly afterward.

Rhode Island Amends Surplus Lines Gross Premium Tax to 4%

The Rhode Island General Assembly enacted into law Article 15 of House Bill 7397 Substitute A as Amended, which amends the Surplus Line Gross Premiums Tax to 4% on the gross premiums charged the insured by the insurers, less the amount of premiums returned to the insured, effective July 1, 2010.

The Rhode Island Division of Taxation issued a notice noting that for the period of January 1, 2010 through June 30, 2010 the Surplus Line Gross Premium Tax Rate was 3%. For the period of July 1, 2010 and thereafter the Surplus Line Gross Premium Tax
Rate is 4%.

The legislation requires that the Surplus Line Broker Estimated Tax Payments due October 30, 2010, December 31, 2010, and thereafter, reflect the 4% tax rate.

CY 2009 Form T-71A Surplus Line Broker Return of Gross Premiums and CY 2010 Form T-69ESSLBDEC Surplus Line Broker Estimated Tax Coupons are available on its website www.tax.ri.gov on the left click FORMS, then Business: Corporate Tax Forms. The CY 2010 Tax Return and CY 2011 Estimated Tax Forms will be available about January 1, 2011. The Rhode Island Division of Taxation does not print and mail forms.

Payment of the Surplus Line Gross Premiums Tax may be made by Electronic Funds Transfer. Questions regarding Electronic Funds Transfer (EFT) should be directed to (401) 574-8732.

More Than 1,000 Registered for NAPSLO Convention

More than 1,000 people registered for the NAPSLO Annual Convention, set for October 11-14 in Atlanta, during the first week of registration.

Registration for the convention opened June 15 and members can register online for the meeting, which will take place at the Atlanta Marriott Marquis and the Hyatt Regency Atlanta, by using the Registration link on the Convention webpage at http://annual.napslo.org.

Registration fees are $795 for Delegates and $395 for Spouses until September 1 and $895 and $425 after that date. Hotel rooms are available at the Atlanta Marriott Marquis ($219) and the Hyatt Regency Atlanta ($199). The two hotels are connected by a walkway.

NAPSLO Convention Registration Open!

Registration for the NAPSLO Annual Convention is now open and NAPSLO members can register online for the meeting, set for October 11-14 at the Atlanta Marriott Marquis and the Hyatt Regency Atlanta, by using the Registration link on the Convention webpage at http://annual.napslo.org.

Please note the following items regarding the convention:

• Registration fees are $795 for Delegates and $395 for Spouses until September 1 and $895 and $425 after that date.
• Hotel rooms are available at the Atlanta Marriott Marquis ($219) and the Hyatt Regency Atlanta ($199). The two hotels are connected by a walkway.
• NAPSLO will again offer Brokers' Club Tables in the Brokers' Lounge, located at the Atlanta Marriott Marquis. There are 40 private club tables and the cost is $1,750.
• William R. Berkley, Chairman & CEO of the W.R. Berkley Corporation presenting the Derek Hughes/NAPSLO Educational Foundation Lecture Series.
• The meeting will open on Monday, October 11 and the Opening Reception will take place that night at the Hyatt Regency Atlanta.
• The Next Generation group has set up a panel discussion in the afternoon, followed by a reception for Next Generation members.
• In addition to the presentation annual member awards and intern and ASLI graduate recognition programs will take place on Wednesday.
• A Happy Hour reception is set for Wednesday afternoon, prior to member private functions that night.
  

Lloyd's Joins Retail Agent - E&S Initiative; Webinar Set to Present Data Exchange Initiatives

The Retail Agent E&S Initiative (a collaboration of the IIABA's Agents Council for Technology, AAMGA, NAPSLO and ACORD) announced that Lloyd’s of London has joined the group and that a free webinar has been set for July 13 to review its proposals to standardize data collection from MGAs.

“We are pleased to add Lloyd’s to the list of U.S. retail agents, brokers, MGAs, carriers and vendors currently involved in the process,” says Angelyn Treutel, Retail Agent E&S Initiative co-chair and vice president of the Treutel Insurance Agency in Bay Saint Louis, Miss. “Our goal has been to ensure that all components of the transaction are involved in our discussions and Lloyd’s joining the process helps us meet that goal.”

Lloyd’s will be coordinating efforts to improve the efficiency of electronically transferring data from MGAs in the U.S. to the London market.

“North America is an important component of business for the London market and Lloyd’s is working on improving the electronic transaction of data on both binding and open market business, and thus believes it is important to be part of this joint industry group,” says Adam Stafford, senior project manager of Lloyd’s market operations.

Webinar
The Retail Agent E&S Initiative also announced that it will sponsor the following free webinar in which Lloyd's would present its current proposals to standardize data collection from its MGAs in the U.S.

TITLE: “Lloyd’s of London US Distribution Initiatives – Standards and Technology”
AUDIENCE: MGAs, wholesalers, retail agents, carriers & vendors participating in the E&S program and broker markets
PARTICIPANTS: Adam Stafford and Sarah Thacker, Lloyd’s of London; Mike Roy, CRC Insurance—Alabama; Angelyn Treutel, Treutel Insurance Agency; John Deibler, JBD Consulting; Jeff Yates, ACT
DATE: July 13, 2010
TIME:11:00 a.m. – 12:00 p.m. EDT
REGISTRATION: Go to https://www1.gotomeeting.com/register/234333792

Nevada Issues Bulletin on Annual Tax Statements

To clarify which brokers must file annual tax statements, the Nevada Division of Insurance has issued a bulletin stating that under NRS 685A.170 each Nevada licensed surplus lines broker must file with the Commissioner, on or before March 1st of each year, a statement of all surplus lines insurance transacted by the broker during the preceding calendar year.

The Department said this requirement applies to every surplus lines broker and that every surplus lines broker must file an annual tax statement, whether individual or firm, regardless of whether an individual licensee is affiliated with a firm or whether any business was actually transacted by the individual licensee or firm.

If an individual licensee is affiliated with a firm, the individual licensee only reports on his/her annual tax statement the policies written under the individual's license number. If the individual licensee only wrote policies under the firm's number, the individual reports $0 on their tax statement while the firm reports the entire number of policies written. Even if the individual or firm did not write any business under the respective broker's license number, an annual tax statement reporting $0 must be filed.

Pursuant to Bulletin No. 09-009, all annual tax statements must be filed using the Nevada Surplus Lines Association's ('NSLA') electronic system for filing annual tax statements. Please do not mail hard copies to the Division or the NSLA.

Questions should be referred to the Nevada Surplus Lines Association at www.nsla.org or (775) 826-7898.

Western States Surplus Lines Conference set for July 20-24 in Whistler

The Surplus Line Association of Washington will be hosting this year’s Western States Surplus Line Conference 2010. The conference takes place July 20-24 in Whistler, British Columbia.

The Western States Surplus Line Conference is an annual summer event with networking opportunities and professional presentations on current events in the surplus lines market.

Visit the Surplus Line Association of Washington’s website at www.surpluslines.org and click the link to the Western States Surplus Line Conference 2010 for more information, including the conference schedule, speakers, accommodations and optional activities.

Connecticut Issues Reminder Notice on Placing Business in the Surplus Lines Market

The Connecticut Insurance Department has issued a notice to surplus lines brokers concerning the placement of business, particularly along the Connecticut coastline, in the surplus lines market.

The Department said it had been apprised of situations where a surplus lines broker is placing a coastal risk in the surplus lines market despite the fact that the insured received a renewal offer from their existing Connecticut authorized insurer.

The Department notice was a reminder that all Connecticut licensed producers as well as Connecticut surplus lines brokers, that when an insured has been offered a renewal from their existing admitted insurers; any other Connecticut admitted insurer; or any residual market mechanism, it would be a violation of Connecticut statutes for the risk to be placed in the surplus lines market.

The department said that surplus lines brokers and producers should review Bulletin SL-1 dated November 17, 2009 at the following link: http://www.ct.gov/cid/lib/cid/BullSL1.pdf for Connecticut requirements for the placement of surplus lines business.

If the Department determines that a producer/broker is employing this practice it said it would undertake appropriate action against the Connecticut licensed producer or surplus lines broker as authorized under the provisions of Title 38a of the Connecticut General Statutes.

Additionally, the Department said that once a risk has been placed in the excess and surplus lines market, that the surplus lines broker is required to seek placement in the admitted market at each renewal and must fully complete a new affidavit verifying their attempt to place the account in the admitted market.

A copy of the form of Affidavit can be found at: http://www.ct.gov/cid/lib/cid/surlnsaff.pdf. Surplus lines brokers are also reminded that surplus lines brokers are required to keep a complete and separate record of all policies procured from unauthorized insurers that all such records shall be subject to examination by the Insurance Commissioner.

Questions concerning this Notice should be made to the Connecticut Insurance Department’s Property and Casualty division at: (860) 297-3941 or at: cid.pc@ct.gov.

Kentucky OKs Bill Regarding Tax Notice Placement & Payment

Kentucky has enacted a law (HB278) to clarify a 2008 law regarding placement of information regarding identification of the amount of local government tax charged and taxing jurisdiction and it requires surplus lines brokers to pay the local government premium tax.

Under the bill, effective July 15, 2010 if the local government premium tax is included in the premium charge to the policyholder, the amount of the local government tax charged for the period and the name of the taxing jurisdiction to which the local premium tax is due must be provided.

For new policies, the information must be on either the: policy, declaration sheet, or initial billing instruments. For renewals, the information must be on either the renewal certificate or the billing instrument for each period for which premium or additional premium is charged to a policyholder by the insurance company.

NAPSLO Applauds Senate's Approval of Surplus Lines Reform Language

NAPSLO representatives said they are pleased to see that language from the NonAdmitted and Reinsurance Reform Act was included in the financial reform legislation passed by the Senate on Thursday night.

"Senate approval of the language is a giant step toward achieving needed reforms of surplus lines regulation," said NAPSLO Executive Director Richard Bouhan. "This is an issue NAPSLO, and the industry, has worked on for many years and we are glad to see the language included in the bill."

With the financial services reform legislation approved, the Senate will now work with the House of Representatives, which approved a financial services reform bill last December, to reconcile the differences in each body's bill. The NRRA language was included in both the House and Senate bills and is expected to be in the final bill.

"We will be working with leaders from both Chambers of Congress to monitor negotiations and to ensure that the surplus lines reform language remains in the bill," said Maria Berthoud of B&D Consulting, NAPSLO's Washington representative.

House - Senate negotiations are expected to take place over the next month or so and a compromise bill could be approved in July and sent to the President for his approval.

When enacted, the surplus lines modernization provisions will make access for insurance consumers to the surplus lines market quicker and more efficient and the payment of surplus lines taxes, particularly on multi-state risks, easier and less burdensome for the surplus lines broker.

In addition, multiple, duplicative and overlapping compliance requirements will be eliminated on surplus lines policies that insure risks across state lines. The bill reduces surplus line broker costs by clarifying that only one state, the home state of the insured, regulates a multistate surplus line transaction. Currently multiple states regulate the placement of surplus lines multi-state risks. This will also benefit the insurance consumer who ultimately pays the price of the current dysfunctional and overlapping regulatory system for surplus lines insurance.

State of the Wholesale Channel Focus of A.M. Best Webinar

A.M. Best Company, publisher of Best's Review magazine, will present a Webcast titled, "State of the Wholesale Channel: What Insurance Agents, Brokers & Carriers Need to Know" on Wednesday, June 2, from 11:00 a.m. to 12:00 p.m. ET.
Registration is free online at http://www.ambest.com/conferences/webinars.html

Experts from the wholesale and specialty markets will explore developments in the availability, pricing and capacity for coverage, along with emerging trends and product innovations in one of the property/casualty insurance industry's busiest sectors.

The webcast speakers include:

• Wayne G. Forest Sr., Forest Insurance Facilities
• Bernie Heinze, American Association of Managing General Agents
• Thomas F. Mulligan, Western World Insurance
• Mark Rothert, Ron Rothert Insurance Services
• Hank Watkins, Lloyd's North America

Attendees can submit questions or comments for discussion to news@ambest.com. Questions and comments will be discussed before and during the live event. The Webcast will be featured in an upcoming issue of Best's Review. Best's Review, A.M. Best Company's award-winning monthly publication, covers the global insurance industry.

For more information about the Webcast, please call (908) 439-2200, ext. 5561, or e-mail lee.mcdonald@ambest.com.

Florida bill exempts some lines from rate filing & review requirements

Florida Senate bill 2176 approved by the Florida House and Senate that exempts certain commercial lines from rate filing and review requirements, has been sent to Florida Gov. Charlie Crist for signature.

The bill does not mention surplus lines insurance but the rate deregulation could impact the surplus lines market.

The bill exempts the following from the filing and review requirements.

• Excess or umbrella.
 

• Surety and fidelity.
• Boiler and machinery and leakage and fire extinguishing equipment.

• Commercial motor vehicle insurance, minimum of 20 vehicles.

  
• Errors and omissions.
• Directors and officers, employment practices, and management liability.

• Intellectual property and patent infringement liability.

• Advertising injury and Internet liability insurance.

  
• Property risks rated under a highly protected risks rating plan.

• Unique or unusual risks or portions of risks not rated according to manuals, rating plans, or rate schedules, including "a" rates.

  


The bill requires an insurer to notify the Office of Insurance Regulation of any changes within 30 days after the rate change.

Underwriting files, premiums, and loss and expense statistics must be maintained by the insurer and are subject to inspection by the OIR. The bill also requires a rating organization to notify the OIR of any changes to loss costs within 30 days after the effective date of the change, and to maintain loss and exposure statistics.

Arkansas Clarifies Reporting Requirements

The Arkansas Insurance Department has issued 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.

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

Among the items the rule reviews include: requirements regarding the surplus line broker's affidavit, responsibility for conducting and reporting a diligent search, language on the contract indicating the policy is written by a surplus lines insurer, and payment of the state’s surplus lines premium tax.

A copy of the approved Rule 24 is available to download from the Arkansas Insurance Department.

E&S Direct Premiums Written Fall 7.5% in 2009

Excess and surplus insurers reported declining premiums in 2009, writing 7.5 percent fewer direct premiums versus the prior year, according to SNL Financial's analysis of the U.S. E&S market, the Insurance Journal reported. The slide comes after a decline in 2008 of 8.6 percent from 2007.

The Insurance Journal said all of the top 10 E&S insurers by market share saw year-over-year declines in premiums written and said American International Group Inc. wrote 15.1 percent fewer premiums in 2009, but retained its No. 1 position with nearly a quarter of the market share. Rounding out the top three, Zurich Financial Services Ltd. saw an 11.2 percent decline, and Nationwide Mutual Group saw a decline of 4.6 percent.

W. R. Berkley Corporation Forms Verus Underwriting Managers, LLC and Announces Executive Appointment

W. R. Berkley Corporation announced the formation of Verus Underwriting Managers, LLC. Verus, based in Richmond, Virginia, will provide property and casualty excess and surplus lines coverages and will underwrite on behalf of W. R. Berkley Corporation member insurance companies rated A+ (Superior) by A.M. Best Company, Inc.

Dale H. Pilkington has been named president of Verus. Mr. Pilkington, a former member of the NAPSLO Board of Directors, has more than 30 years of experience in the commercial insurance industry, with a primary focus on excess and surplus lines. He most recently served as president of the excess and surplus lines segment of a major insurer. Mr. Pilkington earned a Bachelor of Arts in Accounting from the University of South Florida.

Registration Deadline for E&S School is May 14

Registration for the 2010 NAPSLO E&S School, June 22-25 at the Eric P. Newman Education Center in St. Louis, is underway and there is still space remaining available in the school.

The cost of the school is $1,200 and the registration deadline is May 14. Brochures and registration forms are available to download from the NAPSLO website.

The curriculum focuses on seven segments: Risk Takers - and various markets; Distribution System - purpose & variations; MGA's and Brokers - managing the business; Market Dynamics - changing environments; Cops - regulatory agencies, Where's The Money? - financial statements and accounting procedures; and a new topic this year, Marketing.



This year’s Executive Panel will feature David Norris, Senior VP and Property Department Manager, RSUI Group, Inc.; James Drinkwater, President-Brokerage Division, AmWins Group, Inc., Glen Curley, CPCU, ARe, President, Markel, Northeast Region and Loti C. Woods, CPCU, Co-CEO, McAuley Woods & Associates.

 The school will open with the Perspectives From the Top presentation, given by Matt Nichols, President, All Risks, Ltd.

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.

Louisiana House passes bill exempting surpus lines from rates and forms

Louisiana House Bill 285 by Rep. J. Kevin Pearson, which exempts surplus lines from filing rates and forms, has passed the state's House of Representatives.

The bill passed the House 83-0 and was forwarded to the Senate. The bill would exempt surplus lines insurance delivered by approved unauthorized insurers from laws regarding form and rate filing and approval.

HB 285 attempts to clarify the role of surplus lines insurance as complimentary to the "admitted market," while at the same time conserving the full regulatory authority of the Commissioner of Insurance over the surplus lines industry as granted by the Louisiana Insurance Code.

Surplus lines companies must meet strict eligibility and financial requirements of the insurance department before they can be approved to write in Louisiana. Once approved, they are placed on a list known as the "white list." Companies may be removed from the white list at any time, if they fail to meet the eligibility requirements, or the department feels they are not acting in the best interest of the insured, according to the LSLA.

David Tatman, a representative for the Louisiana Surplus Lines Association that between 2004 and 2006, in response to withdrawal from the market by admitted insurers, the surplus lines industry increased writings in Louisiana by 40 percent, according to tax figures provided by the insurance department.

Pennsylvania issues bulletin on surplus lines filing responsibility

Because of confusion over some new developments, the Pennsylvania Surplus Lines Association has issued a bulletin regarding who is responsible for surplus lines filings to repeat that the party who represents the insured is still responsible for the Producer Affidavit, and the party who negotiated and bound the placement in the surplus lines market is still responsible for the Surplus Lines Affidavit.

A copy of the bulletin is available to download and anyone with questions is encouraged to review it.

The bulletin notes that surplus lines filings require 1) a producer who represents the insured AND 2) a surplus lines licensee who is empowered to enter the non-admitted, surplus lines market. This can be two different parties or one party functioning as both licensees.

Operating in the surplus lines market differs from the standard or admitted market where the producer represents both the insured and is also empowered to enter the ADMITTED or LICENSED marketplace. The difference is the Surplus Lines Law and its Regulations shifts responsibility from that of the carrier (which is non-admitted) to the licensee.

What is required is an electronic filing for each placement made, a monthly report stating all surplus lines transactions during the month, and an annual surplus lines premium tax report to the Department of Revenue at the end of each calendar year with a copy submitted electronically to PSLA.

Status of NAPSLO President Marshall Kath

NAPSLO members Colemont Insurance Brokers and AmWINS Group, Inc. have announced that they are combining their operations. NAPSLO President Marshall Kath, who served as CEO of Colemont, has resigned his position with that firm.

Mr. Kath will remain in the industry as an employee of another member NAPSLO firm and will continue his duties as a Director and also President of NAPSLO.

Webinar on April 19 to review joint E&S technology initiative

Agents, brokers, MGAs, E&S carriers, and program managers are encouraged to sign-up for a free webinar on April 19 from 2:00 - 3:00 p.m. (Eastern) to learn about the latest developments regarding the Joint Industry Initiative on connecting the various partners in the E&S industry via technology.

To register for the free webinar go to https://www1.gotomeeting.com/register/834815313.

The webinar will feature the leaders of the Retail Agent-E&S Initiative and will focus on the latest industry developments (both accomplishments and next steps) in improving the efficiency of the E&S market The session also will encourage more retail agents and E&S market players to get involved and help shape the changes.

The session builds upon the recent session at the AAMGA Technology Conference and is the first step in the group's increased marketing effort. Please promote the event to colleagues and business partners who need to know more about the progress being made, so that they can be involved in making these "ease of doing business" enhancements.

After registering you will receive a confirmation email containing information about joining the 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.

The system requirements for PC-based attendees are Windows® 7, Vista, XP, 2003 Server or 2000. For Macintosh systems requirements are Mac OS® X 10.4.11 or newer.

Illinois SLA Launches New Video Series

The Surplus Line Association of Illinois has launched a new series of training videos. The videos were developed for training licensees and clerical staff.

The series of 16 different videos covers various topics from membership forms, to SLA's electronic filing system, to filing of tax statements. They range in length from about three to 10 minutes and can be accessed online from the SLA Web site.

The videos can be viewed as a refresher on a particular topic, or new staff members can watch the complete series as a part of their training.

The Surplus Line Association of Illinois welcomes feedback on the videos.

Alabama issues bulletin removing diligent effort requirement for some policies in coastal areas

Because of difficulty in finding property coverage against damage from wind or hail in some coastal parts of the state, the Alabama Insurance Commissioner issued a bulletin in late March saying that the “diligent effort” requirements can be met without obtaining declinations in certain parts of the state.

The bulletin (No. 2010-01), from Commissioner Jim Ridling, outlines that declinations are not needed if the insured is seeking personal or commercial property insurance coverage against destruction of, or damage to, property caused by wind or wind events and hail, and if the property to be insured is located within an area in Baldwin or Mobile County, south of the southern right-of-way line of Interstate 10.

The department said the bulletin is intended to be temporary and the producer or surplus lines broker is expected to verify and document that a proposed risk satisfies both criteria.

Senate Committee OKs Financial Reform Bill

The Senate Banking Committee approved legislation on Monday to overhaul the nation's financial regulatory system by a 13-10 vote along party lines.

When the bill was introduced last week by committee Chairman Christopher J. Dodd (D-Conn.), surplus lines reform language was included in the legislation, entitled "Restoring American Financial Stability Act of 2010."

According to the Washington Post, the banking committee's 23 members -- 13 Democrats and 10 Republicans -- did not consider any of the major changes that had been proposed in recent days by lawmakers from both parties.

The Post said lawmakers had filed more than 400 potential amendments to the 1,336-page legislation. Ranking Republican Sen. Richard C. Shelby (R-Ala.) and Sen. Bob Corker (R-Tenn.), who recently failed to reach a bipartisan agreement in negotiations with Dodd, were responsible for roughly 200 of the proposed changes.

Arkansas DOI Adopts Amendments to Surplus Lines Rule

The Arkansas Insurance Department has adopted amendments to Rule 24. The amended rule provides direction on forms and documents necessary for the proper reporting and accounting on property, casualty, surety, and marine insurance policies issued by surplus lines insurers through surplus lines brokers.

The rule became effective upon approval by the Insurance Commissioner on March 10, 2010.

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 "Restoring American Financial Stability Act of 2010."

Banking Committee Chair Christopher Dodd (D-CT) and committee members worked to put together the financial regulation bill, released on Monday. The bill included surplus lines reform language from the Nonadmitted and Reinsurance Reform Act SB 1363 / HR 2571 which has already passed the House three times, most recently on September 9, 2009, without a single vote against it.

When enacted, the surplus lines modernization provisions 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.

“We are pleased to see the NRRA provisions included in the regulatory reform legislation on which Sen. Dodd and other Senate Banking Committee Members so diligently worked,” NAPSLO President Marshall Kath stated. “The NRRA provisions will enable the surplus lines industry to operate more efficiently and effectively.”

Richard Bouhan, NAPSLO Executive Director said, “With the inclusion of the surplus lines provisions in the financial reform bill we believe there is a great opportunity to see the NRRA enacted and then see the benefits in the industry.”

“We are eager to see Senate action on the NRRA as included in the regulatory reform legislation,” said Maria Berthoud of B&D Consulting who represents NAPSLO in Washington, D.C. “The NRRA language was included in the regulatory reform bill passed by the House in 2009. The surplus lines provisions have broad support in both Chambers and we expect that it will be in any final version of regulatory reform legislation.”

More than 550 Attend NAPSLO Mid-Year

More than 550 people attended the reformatted NAPSLO Mid-Year Leadership Forum in Scottsdale, Arizona March 3-6.

The meeting was reformatted this year to provide attendees additional time to meet with other members and programs were designed to focus on leadership issues. Nearly 200 people attended the main session, an Executive Session panel discussion on Friday morning with Neal Abernathy of Swett & Crawford, E.G. Lassiter of RSUI Group, John Latham of Markel Corporation, and Matt Power of Lexington Insurance.

Thursday's program was a Town Hall meeting with the NAPSLO Board of Directors and the operations and activities of the Association were reviewed.

Registration Deadline Extended until March 15 for Executive Leadership School

The registration deadline has been extended for two weeks to March 15 to fill the limited number of spots at the second NAPSLO Executive Leadership School, set for April 7-10 at the University of Virginia's Darden School of Business in Charlottesville.

Approximately 25 people have signed up for the intense three-day MBA Executive Level program at one of America’s leading universities. The school tuition is $2,995 and the brochure and registration materials for the school are available to download from the NAPSLO website.

This program, first held in 2009, was designed for senior-level members who wish to broaden their perspectives on important social, political, and economic issues influencing the insurance industry. Participants will enhance their leadership skills and become more able to effectively manage change at the personal, team, and organizational levels, and will return to their organizations with the tools and mindsets to think and act more strategically. Those who attend will develop the enterprise perspective required to make winning choices about running their businesses in today’s complex environment.

Registration for Mid-Year On-Site Only

Registration for the 2010 NAPSLO Mid-Year Leadership Forum is now closed and people interested in attending must register on-site at the Fairmont Scottsdale beginning March 3 at 10:00 a.m.

Housing is also now closed, and there are no longer any sleeping rooms remaining in the NAPSLO meeting room block at the Fairmont Scottsdale. Please call the reservation department of Fairmont Scottsdale at (480) 585-4848 for possible availability. The Fairmont may be sold out for your desired length of stay.

The nearest hotel to the Fairmont with possible availability is the Xona Resort Scottsdale. Please visit their website at http://www.xonaresort.com or call (480) 585-1234 for more information. The Xona Resort is located across the parking lot from the Fairmont Scottsdale.

The Mid-Year runs March 3-6 and more than 525 people have registered for the meeting. A registration list is available to download from the NAPSLO website.

NAPSLO to take part in Surplus Lines Producer Compensation Webinar

NAPSLO Government Relations Director Steve Stephan and Michael Byrne, Partner of Dewey and LeBoeuf will take part in a National Underwriter webinar, Surplus Lines Producer Compensation Update, on Wednesday, February 24. The webinar, set for 2:00 p.m. - 3:00 p.m. (Eastern) will focus on:

• Investigation history
• Regulatory response to investigations
• Industry response to investigations
• Commissions vs. fees
• The future

Space is limited for the webinar and you can register online at the National Underwriter site. The cost is $29.95; for Group Pricing call, (800) 543-0874. After registering you will receive a confirmation email containing information about joining the webinar.

System Requirements for the webinar are Windows 2000, XP Home, XP Pro, 2003 Server, Vista or Mac OS X 10.3.9 (Panther) or newer.

Les Ross Elected Chairman of Calif. Surplus Line Association

Members of the Surplus Line Association of California (SLA) elected Les Ross as their Chairman during its 2010 Annual Meeting held January 26, in San Francisco and January 28, in Beverly Hills.

Les Ross is Executive Vice President of Crump Insurance Services Inc., in San Francisco, California. Elected Vice Chairman was Patrick Hanley, President of Socius Insurance Services, Inc. Elected Secretary-Treasurer was Davis Moore, President of Worldwide Facilities, Inc.

In addition, 10 Executive Committee members were elected as follows: John Edack (immediate past chairman) of Arch Specialty Insurance Agency, Inc., Dean Adrighetto of Westchester Specialty Insurance Services, Pamela Quilici of Crouse & Associates, Frank Cravens of M.J. Hall & Company, Inc., Doris Barnett of Colemont Insurance Brokers, Anne McNally of Wells Fargo Insurance Services, Gerald J. Sullivan of Gerald J. Sullivan & Associates, Inc., Chris Brown of Brown & Riding Insurance Brokers, Phil Mazur of Swett & Crawford, and Ian Fitt of Western Re/Managers Insurance Services, Inc.

The Members also voted to approve the appointment of former Insurance Commissioner Justice Harry Low (Ret.) for a one year term as SLA Mediator.

The SLA is an organization of 4,350 California Surplus Line Broker licensees and serves as the official surplus line advisory organization to the California Department of Insurance.

Rhode Island Issues Reminder on Broker Reports

The Department of Business Regulation, Insurance Division for the state of Rhode Island has issued a reminder to surplus lines brokers regarding the reports that are required to be submitted by Surplus Line Broker licensees in Rhode Island.

Lead Liability Coverage Reports are due annually on February 1. Surplus Line Brokers shall file on an individual licensee basis utilizing the respective form provided in Exhibit B. Surplus line brokers with no reportable business are required to submit a "zero" report to the Department. The reports shall be sent to the attention of Candace Casala, Senior Insurance Rate Analyst who may be reached at 401-462-9607. The reports may be e-mailed to Ms. Casala at ychts@dbr.state.ri.us or via regular mail at the address noted above.

Surplus Line Broker Annual Reports Due April 1. Every licensed surplus line broker are to report the total number of policies and premium issued in the preceding calendar year utilizing the form provided in Regulation 11, Exhibit C. Please insert licensee name and number to the form when submitting the report. Surplus line brokers with no reportable business are required to submit a "zero" report to the Department. Submit reports to the attention of Teresa P. DeLuca, Licensing Aide who may be reached at 401-462-9610. The reports may be e-mailed to Ms. DeLuca at ddddd@dbr.state.ri.us or via regular mail at the address noted above.

Affidavit by broker forms are NO longer required to be filed with the Department. The surplus line broker is required to maintain the completed affidavit in his/her office. Please see Insurance Bulletin # 2008-8 for additional information.

For questions on surplus line broker licensing and renewals, please contact Lee-Ann Desilets at 401-462-9611 or ldesilets@dbr.state.ri.us. For questions on insurers placed on our approved list of surplus line insurers please contact Matthew DiMaio at 401-462-9612 or cmpny@dbr.state.ri.us. For questions on reporting and payment of surplus line taxes (T-71), please contact the RI Division of Taxation at 401-574-8935 or www.tax.ri.gov.

Surplus Lines Law Group Sets Spring & Fall Meetings Dates

The Surplus Lines Law Group has announced the dates of their 2010 Spring and Fall meetings. The Spring meeting will take place April 15-16 in San Francisco and the fall meeting will take place September 30 & October 1 in New York City.

The surplus lines law group is an informal group of attorneys, compliance professionals, and trade associations that meet to discuss legal issues impacting surplus lines insurance.

The Surplus Line Association of California will host the Spring meeting and the Excess Line Association of New York is hosting the fall event. Meetings start with a welcome reception and dinner on Thursday evening and the meeting begins on Friday morning and concludes after lunch.

Information regarding registration for the meetings and also hotel reservations will be available soon.

Stamping Offices Report Surplus Lines Premiums Declined by 7.9 percent in 2009

The amount of premiums collected by surplus lines stamping offices continued to decline in 2009 according to a report by the Surplus Lines Stamping Office of Texas, with approximately $19.5 billion collected, compared to $21.2 billion in 2008. By comparison, in 2007 stamping offices reported processing $23 billion in premiums.

The 7.9% percent decline from 2008 to 2009 was slightly less than the 8.2% decline from 2007 to 2008. While there was a large decline in premiums written, the number of policies declined only by 1.9%, to 3.25 million items processed.

Of the 15 stamping offices in operation at the start of 2009, 13 reported declines in premiums, with only Texas and Mississippi reporting increases, 4.2% and 5.7% respectively. States reporting small decreases in premiums were Washington (-1.4%), Florida (-5.5%), Illinois (-7.0%), and New York (-9.5%).

Montana reported the largest percentage decline in premiums but their stamping office ceased operation as of July 1 as the state took over collection of premium taxes. All other state stamping offices reported double digit declines in premiums, including: Nevada (-20.9%), California (-19.0%), Oregon (-18.6%), Idaho (-15.2%), Pennsylvania (-12.5%), Utah (-12.0%), and Arizona (-11.9%).

Minnesota’s stamping office began operations in 2009 and reported $247 million in premiums. California reported the most premium in 2009 at $4.6 billion, followed by Florida at $4.15 billion, Texas at $3.4 billion and New York at $3 billion.

In Memoriam: Early NAPSLO Director

Insurance industry veteran and one of the founders of NAPSLO, A. Mason Blodgett, died peacefully on Jan. 14, 2010, at age 94.

Mr. Blodgett was amongst those who helped found NAPSLO and served on the Board of Directors from 1975-79.

Blodgett's insurance career spanned more than seven decades. It began in Boston in 1932 with "little Aetna" and then, in the late 1930s, moved to Automobile Mutual. During WWII, he served as an officer in the Army Air Corps. After the war, Blodgett was transferred to San Francisco where he opened the western region for Automobile Mutual.

In 1956, he formed A Mason Blodgett & Associates which, for many years, was a leading retail agency in San Francisco.

In 1966, Blodgett opened Cambridge General Agency, a managing general agent and surplus lines broker. Cambridge was Scottsdale Insurance Co.'s first agent in California and pioneered a number of programs with the London market. He retired in 2007.
Blodgett is survived by his wife Sandi, sons James and William, and daughters Judy, Katie and Sarah. Remembrances may be sent to the American Association of Managing General Agents (AAMGA) Foundation.

ELANY Urges Brokers to Utilize Expanded Export List

The Excess Lines Association of New York (ELANY) recently issued a news release urging brokers to take advantage of the substantial expansion of the export list which took place last fall.

Coverages included on the “export list” were substantially expanded effective as of September 2, 2009. If brokers specialize in one or more of these newly included coverages they are permitted to bypass the diligent search requirements regarding declining licensed insurers. Twenty-one separate pieces of information must be set forth to establish three declinations except for coverages on the “export list”.

ELANY said the streamlining of the affidavit compliance process requirement makes it easier to file excess line affidavits, creating efficiencies and lowering broker processing costs. ELANY is urging brokers to inform their staff and retail producers to take advantage of these benefits.

Additional details on the expanded export list are available by downloading the news release from ELANY.

Kentucky to Increase Premium Tax in April

The Kentucky Department of Insurance has issued a bulletin announcing that the monthly premium surcharge tax is increasing from 1.5% to 1.8% effective April 1, 2010.

The monthly premium surcharge tax is required to be paid by all domestic, foreign, or alien insurers, other than life and health insurers, and it will increase from $1.50 to $1.80 per $100 of premiums, assessments, or other charges for insurance coverage provided to policyholders on risks located in Kentucky. The adjustment to the premium surcharge rate will be effective and applied to policies issued or renewed on or after April 1, 2010.

The exceptions listed in KRS 136.392(5) remain effect. In addition:
• Municipal premium taxes imposed pursuant to KRS 91A are not to be included in calculation of the premium surcharge;
• Life and health insurers are not subject to the premium surcharge imposed by KRS 136.392; and
• Pursuant to KRS 342.122(1)(e), the premium surcharge shall not be imposed on Workers’ Compensation premium.

Texas SLOT to Help with Data Call

The Surplus Lines Stamping Office of Texas announced it can respond on behalf of surplus lines insurers writing policies in the state regarding the Texas Department of Insurance data call on the number of policies in force as of the end of 2009.

The Department is required to provide consumers with complaint ratios and in order to satisfy this requirement the department requires companies to report the number of policies in force.

The Stamping Office will respond to the data call on behalf of any insurers not wishing to directly respond and historically, approximately one third of surplus lines insurers provide their own data directly.

Next week the Stamping Office will send out a report to each insurer indicating the number of Texas policies recorded in force as of Dec. 31, 2009. This will give insurers time to review the data and contact the Stamping Office if there are issues or questions.

The Stamping Office will also send out another run of that report to insurers in March, to account for filings by agents in January and February for 2009 policies. Finally, the Stamping Office will enter the policy information for each insurer into the Texas Department of Insurance’s web portal designed for that purpose. The Stamping Office will not be able to access the portal for any insurer that has decided to report its own data directly.

Questions should be directed to the Stamping Office at (800) 449-6394.

Weather Closes NAPSLO Office

The NAPSLO Office was closed on Thursday, January 7, 2010 because of the heavy snowfall in the Midwest. The office is expected to reopen on Friday.

California Stamping Fee to Increase Feb. 1

The Surplus Lines Association of California Executive Committee and the 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.