Limited space remains for the 2011 NAPSLO E&S School, scheduled to take place June 21-24 at the Eric P. Newman Education Center in St Louis. The deadline to register is May 6 and the cost of the school is $1,200. Registration materials can be downloaded from NAPSLO's website.
The E&S School's curriculum will focus 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? - reviewing financial statements and accounting procedures; and E&S Marketing.
A focal point of the school will be the Perspectives from the Top by John Latham, President, Wholesale Division, Markel. In addition, there will be an Executive Panel featuring Orville Jones, Assistant to the Chairman, CRC; Patti Nunnally, President, Royal Oak Underwriters, Inc.; Matthew B. Scott, President, Penn-America Group/United National Group; and F. Marshall Turner, President/CEO, Maxum Specialty Insurance Group.
Friday, April 29, 2011
Wednesday, April 27, 2011
Nebraska Approves Legislation Allowing State to Enter into NIMA Tax Allocation Compact
Nebraska's Governor signed a bill on Tuesday which authorizes the Insurance Director to enter into the NIMA tax allocation compact to facilitate the collection, allocation and disbursement of premium taxes.
Nebraska is the 16th state to enact NonAdmitted and Reinsurance Reform Act (NRRA) implementation legislation. During the legislative session NAPSLO provided draft legislation and comments opposing the NIMA allocation approach, and Director of Government Relations Steve Stephan met with Insurance Department representatives.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
The bill would authorize the Director to enter into NIMA, participate in the clearinghouse, and adopt the allocation schedule established through NIMA. Nebraska law already provides for premium tax to be imposed on the total gross amount of surplus lines premiums.
The bill also provides for exclusive home state regulation of surplus lines placements and replaces the current definition of an industrial insured with the more narrow definition of an exempt commercial purchaser (ECP) from the NRRA.
The bill incorporates the NRRA eligibility requirements for U.S. domestic insurers, prohibits a surplus lines licensee from placing insurance with non-U.S. insurers unless the insurer is International Insurers Department (IID) listed, and removes the existing eligibility criteria for non-U.S. insurers so that there is no alternative to IID listing to become eligible.
Nebraska is the 16th state to enact NonAdmitted and Reinsurance Reform Act (NRRA) implementation legislation. During the legislative session NAPSLO provided draft legislation and comments opposing the NIMA allocation approach, and Director of Government Relations Steve Stephan met with Insurance Department representatives.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
The bill would authorize the Director to enter into NIMA, participate in the clearinghouse, and adopt the allocation schedule established through NIMA. Nebraska law already provides for premium tax to be imposed on the total gross amount of surplus lines premiums.
The bill also provides for exclusive home state regulation of surplus lines placements and replaces the current definition of an industrial insured with the more narrow definition of an exempt commercial purchaser (ECP) from the NRRA.
The bill incorporates the NRRA eligibility requirements for U.S. domestic insurers, prohibits a surplus lines licensee from placing insurance with non-U.S. insurers unless the insurer is International Insurers Department (IID) listed, and removes the existing eligibility criteria for non-U.S. insurers so that there is no alternative to IID listing to become eligible.
Monday, April 25, 2011
Replay of NRRA Implementation Status Webinar Available to View
Information on the status of implementation of surplus lines reforms signed into law in 2010 and their impact on surplus lines brokers and carriers was the subject of a NAPSLO sponsored webinar on April 19 and a copy of the webinar is available to view online at http://webinar.napslo.org.
More than 1,000 people signed up to view the program, The NRRA and Surplus Lines Reforms - An Update: Will You and the States Be Ready on July 21, 2011? The webinar reviewed state's actions to implement the NonAdmitted & Reinsurance Reform Act and what agents, brokers, carriers should expect when the law goes into effect.
In addition to a copy of the webinar being posted on the NAPSLO website, the PowerPoint presentation is also available to download. Answers to questions submitted during webinar will be posted in the next few weeks.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. To comply, states are revising their laws. Many states are also considering forming a tax compact to handle allocation of surplus lines premium taxes. This may impose some additional reporting requirements for brokers and could impact companies.
The webinar included presentations from Richard Bouhan, NAPSLO Executive Director, Steve Stephan, NAPSLO Director of Government Relations, Libby Baney, B & D Consultants, NAPSLO Washington D.C. Lobbyist, Michael Byrne, Partner, Dewey & LeBoeuf LLP, and Dan Maher, Executive Director, Excess Line Association of New York.
More than 1,000 people signed up to view the program, The NRRA and Surplus Lines Reforms - An Update: Will You and the States Be Ready on July 21, 2011? The webinar reviewed state's actions to implement the NonAdmitted & Reinsurance Reform Act and what agents, brokers, carriers should expect when the law goes into effect.
In addition to a copy of the webinar being posted on the NAPSLO website, the PowerPoint presentation is also available to download. Answers to questions submitted during webinar will be posted in the next few weeks.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. To comply, states are revising their laws. Many states are also considering forming a tax compact to handle allocation of surplus lines premium taxes. This may impose some additional reporting requirements for brokers and could impact companies.
The webinar included presentations from Richard Bouhan, NAPSLO Executive Director, Steve Stephan, NAPSLO Director of Government Relations, Libby Baney, B & D Consultants, NAPSLO Washington D.C. Lobbyist, Michael Byrne, Partner, Dewey & LeBoeuf LLP, and Dan Maher, Executive Director, Excess Line Association of New York.
Thursday, April 21, 2011
North Dakota Approves SLIMPACT-Lite Compact As Part of NRRA Compliance Legislation
North Dakota has approved legislation on Tuesday which would adopt the SLIMPACT-lite type of tax allocation compact.
North Dakota is the 15th state to pass NonAdmitted and Reinsurance Reform Act related implementation legislation and during the session NAPSLO provided draft legislation and comments on proposed legislation, met with legislators and department of insurance officials, and hired a lobbyist to work with legislators on the issue.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
North Dakota's bill would adopt the SLIMPACT-lite type of tax allocation compact and the bill adopts the NRRA eligibility requirements for U.S. domestic insurers and requires the surplus lines licensee to confirm a non-U.S. insurer is on the International Insurers Department list (the bill removes the existing eligibility criteria for non-U.S. insurers). It also provides for exclusive home state regulation and incorporates the NRRA's exempt commercial purchaser (ECP) exemption from the diligent search requirement.
North Dakota is the 15th state to pass NonAdmitted and Reinsurance Reform Act related implementation legislation and during the session NAPSLO provided draft legislation and comments on proposed legislation, met with legislators and department of insurance officials, and hired a lobbyist to work with legislators on the issue.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
North Dakota's bill would adopt the SLIMPACT-lite type of tax allocation compact and the bill adopts the NRRA eligibility requirements for U.S. domestic insurers and requires the surplus lines licensee to confirm a non-U.S. insurer is on the International Insurers Department list (the bill removes the existing eligibility criteria for non-U.S. insurers). It also provides for exclusive home state regulation and incorporates the NRRA's exempt commercial purchaser (ECP) exemption from the diligent search requirement.
Tuesday, April 19, 2011
Arizona Approves Legislation Allowing State to Enter Tax Allocation Compact
The Arizona Governor has signed House Bill 2112 on Monday which generally authorizes the Director of Insurance to enter into a compact or agreement such as SLIMPACT or NIMA.
Arizona is the 14th state to pass NonAdmitted and Reinsurance Reform Act (NRRA) implementation legislation during this session. In connection with Arizona’s NRRA implementation efforts, NAPSLO provided draft legislation and Director of Government Relations, Steve Stephan, testified twice before the legislature.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
Arizona’s bill generally authorizes the Director to enter into a tax compact; however, prior to joining any compact, the Director must conduct an administrative hearing demonstrating that participation in a compact is in the best interests of Arizona. In reaching this determination, the following factors must be considered (1) the impact on the state’s gross receipt of premium taxes, (2) the regulatory burden and costs placed on insurance companies, surplus lines brokers and agents; (3) the cost impact on insureds resulting from any regulatory requirements attributable to a compact; (4) any other factors raised by the director or any other interested party.
The bill also replaces the existing "industrial insured" exemptions from the diligent search and insurer licensing/"doing business" requirements with exemptions from such requirements for an exempt commercial purchaser (ECP) as defined by the NRRA.
The bill also incorporates the U.S. domestic insurer eligibility requirements from the NRRA, as well as automatic eligibility for non-U.S. insurers upon International Insurers Department listing and provides for exclusive "home state" regulation as required by the NRRA.
The bill would subject surplus lines brokers to quarterly reporting with the clearinghouse of transactions involving the multistate risks of an Arizona home state insured.
Arizona is the 14th state to pass NonAdmitted and Reinsurance Reform Act (NRRA) implementation legislation during this session. In connection with Arizona’s NRRA implementation efforts, NAPSLO provided draft legislation and Director of Government Relations, Steve Stephan, testified twice before the legislature.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
Arizona’s bill generally authorizes the Director to enter into a tax compact; however, prior to joining any compact, the Director must conduct an administrative hearing demonstrating that participation in a compact is in the best interests of Arizona. In reaching this determination, the following factors must be considered (1) the impact on the state’s gross receipt of premium taxes, (2) the regulatory burden and costs placed on insurance companies, surplus lines brokers and agents; (3) the cost impact on insureds resulting from any regulatory requirements attributable to a compact; (4) any other factors raised by the director or any other interested party.
The bill also replaces the existing "industrial insured" exemptions from the diligent search and insurer licensing/"doing business" requirements with exemptions from such requirements for an exempt commercial purchaser (ECP) as defined by the NRRA.
The bill also incorporates the U.S. domestic insurer eligibility requirements from the NRRA, as well as automatic eligibility for non-U.S. insurers upon International Insurers Department listing and provides for exclusive "home state" regulation as required by the NRRA.
The bill would subject surplus lines brokers to quarterly reporting with the clearinghouse of transactions involving the multistate risks of an Arizona home state insured.
Monday, April 18, 2011
NAPSLO Leads National Campaign to Implement the NRRA
NAPSLO is leading a nationwide effort to inform state lawmakers, insurance regulators and others about changes needed in laws and regulations to properly implement the Nonadmitted Reinsurance Reform Act (NRRA), which became law last year through the landmark Dodd-Frank legislation.
"For years, NAPSLO has led efforts to secure the enactment of surplus lines legislative reform in both the states and in Washington. With the passage of the NRRA within Dodd-Frank, this effort now moves to every state, necessitating that NAPSLO take this initiative to engage state lawmakers and insurance commissioners across the country to ensure this key section of Dodd-Frank is properly implemented in every state," NAPSLO Legislative Committee co-Chair Hank Haldeman said.
The NRRA mandates that beginning July 21st, the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a broker to pay taxes. To comply with these rules, states are revising their laws, and many states are also considering forming a tax compact to handle allocation of surplus lines premium taxes.
"With the NRRA implementation clock ticking, NAPSLO has expanded its resources to ensure our members, clients and other stakeholders are properly protected," said NAPSLO President Letha Heaton. "This issue is of great importance to our members and is a top priority of the entire organization."
As part of the effort that focuses on lawmakers, regulators and the general public, NAPSLO has hired outside counsel nationally as well as lobbyists on the ground in key states. The organization has also developed a special section of the NAPSLO website (New Surplus Lines Laws) to provide detailed state-by-state information on the latest developments and other important information for NAPSLO members and brokers.
"Appropriate state implementation of the NRRA is a top priority for NAPSLO and for all of our members. Several states have already acted this year, and we expect others to take action before many state legislative sessions adjourn in the coming months. NAPSLO is committed to achieving the best implementation possible in every state, and to keeping all our members updated on the latest developments," added Legislative Committee co-Chair Dave Leonard.
"For years, NAPSLO has led efforts to secure the enactment of surplus lines legislative reform in both the states and in Washington. With the passage of the NRRA within Dodd-Frank, this effort now moves to every state, necessitating that NAPSLO take this initiative to engage state lawmakers and insurance commissioners across the country to ensure this key section of Dodd-Frank is properly implemented in every state," NAPSLO Legislative Committee co-Chair Hank Haldeman said.
The NRRA mandates that beginning July 21st, the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a broker to pay taxes. To comply with these rules, states are revising their laws, and many states are also considering forming a tax compact to handle allocation of surplus lines premium taxes.
"With the NRRA implementation clock ticking, NAPSLO has expanded its resources to ensure our members, clients and other stakeholders are properly protected," said NAPSLO President Letha Heaton. "This issue is of great importance to our members and is a top priority of the entire organization."
As part of the effort that focuses on lawmakers, regulators and the general public, NAPSLO has hired outside counsel nationally as well as lobbyists on the ground in key states. The organization has also developed a special section of the NAPSLO website (New Surplus Lines Laws) to provide detailed state-by-state information on the latest developments and other important information for NAPSLO members and brokers.
"Appropriate state implementation of the NRRA is a top priority for NAPSLO and for all of our members. Several states have already acted this year, and we expect others to take action before many state legislative sessions adjourn in the coming months. NAPSLO is committed to achieving the best implementation possible in every state, and to keeping all our members updated on the latest developments," added Legislative Committee co-Chair Dave Leonard.
Friday, April 15, 2011
Washington Approves NRRA Legislation; Premium Taxes Not Shared
Washington's Governor signed NRRA implementation legislation this week which does not include sharing premium taxes on multi-state risks.
During the session NAPSLO provided draft legislation, supplied comments on early drafts of legislation that included tax allocation provisions and Director of Government Relations Steve Stephan met with Insurance Department representatives twice on the legislation. NAPSLO applauded the decision to study the allocation issue further to determine if any allocation system will benefit the state.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
Washington's bill does not provides for sharing premium taxes on multi-state risks. For property and casualty insurance if Washington is the insured's Home State, the surplus lines tax would be imposed on 100% of the premium even if the policy covers multi-state risks. Other lines of insurance would be taxed only on the portion of the premium allocated to Washington risks.
The bill incorporates the NRRA's Home State definition, plus a definition of "principal place of business." It provides for exclusive Home State regulation of surplus lines placements of property and casualty insurance. Incorporates the ECP exemption from the NRRA. Generally incorporates the NRRA uniform standards for insurer eligibility, and limits placement with non-U.S. insurers to insurers on the IID list.
During the session NAPSLO provided draft legislation, supplied comments on early drafts of legislation that included tax allocation provisions and Director of Government Relations Steve Stephan met with Insurance Department representatives twice on the legislation. NAPSLO applauded the decision to study the allocation issue further to determine if any allocation system will benefit the state.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.
Washington's bill does not provides for sharing premium taxes on multi-state risks. For property and casualty insurance if Washington is the insured's Home State, the surplus lines tax would be imposed on 100% of the premium even if the policy covers multi-state risks. Other lines of insurance would be taxed only on the portion of the premium allocated to Washington risks.
The bill incorporates the NRRA's Home State definition, plus a definition of "principal place of business." It provides for exclusive Home State regulation of surplus lines placements of property and casualty insurance. Incorporates the ECP exemption from the NRRA. Generally incorporates the NRRA uniform standards for insurer eligibility, and limits placement with non-U.S. insurers to insurers on the IID list.
Wednesday, April 13, 2011
Several States Pass NRRA Related Legislation; Changes Tracked on NAPSLO's Website
NRRA-related legislation was signed into law recently in Washington, New Mexico, Arkansas and Idaho and is awaiting action by the Governors in Arizona, Maryland and North Dakota.
To date legislatures in 16 states have passed legislation related to the NRRA. Legislation in New York, Virginia, Washington, Maryland and Idaho did not address compacts while Kentucky, Ohio, New Mexico and North Dakota passed legislation favoring the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT) type of compacts. South Dakota and West Virginia favored the NAIC's Nonadmitted Insurance Multistate Agreement (NIMA) while Arkansas, Arizona, Mississippi, Wyoming, and Utah approved legislation authorizing the Commissioner to enter into an agreement or compact.
To keep up to date on what is going on in each state, you can follow changes on the NAPSLO website under New Surplus Lines Law and there is a state-by-state table (New Statues) showing the most recent action by legislators
To date legislatures in 16 states have passed legislation related to the NRRA. Legislation in New York, Virginia, Washington, Maryland and Idaho did not address compacts while Kentucky, Ohio, New Mexico and North Dakota passed legislation favoring the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT) type of compacts. South Dakota and West Virginia favored the NAIC's Nonadmitted Insurance Multistate Agreement (NIMA) while Arkansas, Arizona, Mississippi, Wyoming, and Utah approved legislation authorizing the Commissioner to enter into an agreement or compact.
To keep up to date on what is going on in each state, you can follow changes on the NAPSLO website under New Surplus Lines Law and there is a state-by-state table (New Statues) showing the most recent action by legislators
Tuesday, April 12, 2011
Will You Be Ready in July for the NRRA? Sign-up for April 19th Webinar on Implementation Status
With only three months to go before the Nonadmitted and Reinsurance Reform Act (NRRA) goes into effect, legislators, regulators, and the industry are working to be ready when the law goes into effect.
To help NAPSLO members be prepared, information on the status of implementation of surplus lines reforms and the impact on surplus lines brokers and carriers will be the subject of a NAPSLO sponsored webinar next Tuesday, April 19 at 2:00 p.m. Eastern.
The webinar, The NRRA and Surplus Lines Reforms - An Update: Will You and the States Be Ready on July 21, 2011?, will review state actions to implement the NonAdmitted & Reinsurance Reform Act, contained in the financial services reform bill approved in July 2010, and what agents, brokers, and carriers should know and expect when the law goes into effect.
There is no charge to attend the webinar and people can register online at https://www1.gotomeeting.com/register/676571968 or through a link on the NAPSLO website.
To help NAPSLO members be prepared, information on the status of implementation of surplus lines reforms and the impact on surplus lines brokers and carriers will be the subject of a NAPSLO sponsored webinar next Tuesday, April 19 at 2:00 p.m. Eastern.
The webinar, The NRRA and Surplus Lines Reforms - An Update: Will You and the States Be Ready on July 21, 2011?, will review state actions to implement the NonAdmitted & Reinsurance Reform Act, contained in the financial services reform bill approved in July 2010, and what agents, brokers, and carriers should know and expect when the law goes into effect.
There is no charge to attend the webinar and people can register online at https://www1.gotomeeting.com/register/676571968 or through a link on the NAPSLO website.
Friday, April 08, 2011
NAIC Tries to Undercut Surplus Lines Reform
In the "Sounding Board" column of the April 2011 issue of American Agent & Broker magazine NAPSLO Executive Director Richard Bouhan writes that the National Association of Insurance Commissioners (NAIC) has done nothing to ensure that the states’ laws will be consistent with the federal requirements when NRRA becomes effective in July.
Rather the NAIC has concentrated on creating an interstate compact/agreement to allow the states to voluntarily share surplus lines tax revenue even though under the NRRA a compact is not mandatory and its provisions contain no deadline or effective date.
In addition, the NAIC's NIMA (Nonadmitted Insurance Multistate Compact) proposal "includes an excruciatingly detailed premium tax allocation formula which imposes data demands that go well beyond the requirements of the current premium tax allocation system."
The full article is available at the Property Casualty 360 website.
Rather the NAIC has concentrated on creating an interstate compact/agreement to allow the states to voluntarily share surplus lines tax revenue even though under the NRRA a compact is not mandatory and its provisions contain no deadline or effective date.
In addition, the NAIC's NIMA (Nonadmitted Insurance Multistate Compact) proposal "includes an excruciatingly detailed premium tax allocation formula which imposes data demands that go well beyond the requirements of the current premium tax allocation system."
The full article is available at the Property Casualty 360 website.
Thursday, April 07, 2011
No OFC Fight – For Now
Rep. Judy Biggert (R-IL), Chairman of the House Financial Services Subcommittee on Insurance, Oversight, and Community Opportunity announced late last week that her subcommittee would not consider any optional federal charter (OFC) legislation during the current session of Congress, according to NAPSLO's Washington, D.C. Lobbyists, B&D Consulting.
Rep. Biggert and her staff stated that their priorities for the term are primarily reform of the National Flood Insurance Program and oversight of the Dodd-Frank Wall Street Consumer Protection and Wall Street Reform Act, specifically the Financial Stability Oversight Council and the Federal Insurance Office.
This pause in the federal vs. state regulator debate is just that, though: a pause. Rep. Ed Royce (R-CA), who earlier this year sought the Financial Services Committee chairmanship without success, has voiced his plan to introduce new OFC legislation later this year. Rep. Royce has backing in this effort from many trade associations and from (generally larger) insurance companies, whose support stems from desire for a federal regulator to represent U.S. insurer interests on international and reinsurance matters. Stakeholders can rest assured that this debate will continue far into the future.
Rep. Biggert and her staff stated that their priorities for the term are primarily reform of the National Flood Insurance Program and oversight of the Dodd-Frank Wall Street Consumer Protection and Wall Street Reform Act, specifically the Financial Stability Oversight Council and the Federal Insurance Office.
This pause in the federal vs. state regulator debate is just that, though: a pause. Rep. Ed Royce (R-CA), who earlier this year sought the Financial Services Committee chairmanship without success, has voiced his plan to introduce new OFC legislation later this year. Rep. Royce has backing in this effort from many trade associations and from (generally larger) insurance companies, whose support stems from desire for a federal regulator to represent U.S. insurer interests on international and reinsurance matters. Stakeholders can rest assured that this debate will continue far into the future.
Monday, April 04, 2011
Rejection of Tax Compact Authorization in NY NRRA Compliance Legislation May Signal Difficulties for Establishing National Compact
New York's decision to reject authorizing the state to join a surplus lines tax allocation compact may indicate that forming such a national tax sharing arrangement for surplus lines is not feasible, according to NAPSLO officials. In passing the legislation, signed into law on Thursday by Gov. Andrew Cuomo, the state Legislature removed provisions that would have authorized the state to join a tax compact.
The legislation, which brings state laws into compliance with the Nonadmitted and Reinsurance Reform Act (NRRA), provides for the state to tax 100% of each surplus line policy's written premium when New York is the "Home State of the insured.
“Along with California’s expected decision not to include compact language in their NRRA compliance legislation, New York’s action brings into question whether large states are willing to participate in an allocation compact,” said NAPSLO Executive Director Richard Bouhan. “Without the large states a compact might not be practical.”
In 2009, the four largest states (Florida, California, Texas and New York) reported approximately $16 billion of the $32 billion in surplus lines premiums. The Florida legislature has not approved legislation to allow the state to join a compact. In Texas, the Comptroller already has authority to have the state join a compact however the legislature is considering a proposal to join the revised Surplus Lines Insurance Multi-State Compliance Compact, referred to as SLIMPACT-Lite.
The NRRA mandates that beginning July 21 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. To comply, states are revising their laws. Many states are also considering forming a tax compact to share surplus lines premium taxes, however they are not required to join a compact under the NRRA legislation.
“Starting July 21 surplus lines brokers will benefit from the NRRA by only having to pay premium taxes to the home state of the insured and states will then be responsible for any allocation of taxes,” said Mr. Bouhan. “The NRRA legislation noted that states may allocate taxes among the states through a compact however there was neither a mandate for a compact nor a deadline to establish one. It is up to the states whether and how to allocate these taxes."
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