A number of bills bringing state laws into compliance with the NonAdmitted Reinsurance Reform Act (NRRA), or approving the states to join a tax compact, have been introduced at the state level and several states have taken action.
On Thursday, in Indiana, the Senate Committee on Financial Institutions and Insurance passed SLIMPACT by a vote of 6 to 3. Emily Campbell of the law firm of Baker & Daniels testified for NAPSLO in favor of SLIMPACT at the hearing. The Insurance Department opposed the legislation.
A complete list of all of the states and the status of bills introduced regarding legislative changes or the tax compact can be viewed on the NAPSLO website under the New Surplus Lines Law section.
So far this year, in addition to the committee approval in Indiana, bills favoring SLIMPACT in Kentucky and a tax compact in general in North Dakota have passed each state's House of Representatives and are under consideration by the Senate. A bill favoring the Nonadmitted Insurance Multistate Agreement (NIMA) in South Dakota has passed both houses and been sent to the Governor.
The NRRA was passed last July and goes into effect on July 21, 2011. 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, but encourages states to form a compact to handle allocation of tax payments.