Legislatures in Florida and Hawaii have approved bills intended to implement the Nonadmitted and Reinsurance Reform Act (NRRA) and the bills have been sent to the respective governors to be signed. Both bills would allow the states to join a tax compact.
Florida's bill, SB1816, would generally authorize the Department of Financial Services and the Office of Insurance Regulation to enter into an agreement with other states to share taxes. Hawaii's bill, HB1052, would allow the insurance commissioner to participate in tax sharing system.
NAPSLO worked with legislators in both states during the legislative session and was pleased to see the final legislative bills contained requirements for additional legislative oversight and involvement in connection with the decision to join a compact.
Legislation in 16 states has been signed into law and seven other states (including Hawaii and Florida) are awaiting action by their governor. More information on the various state actions is available on NAPSLO's website.
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.