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.