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.

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