The Alabama governor signed into law on Thursday a bill which would adopt the SLIMPACT-lite tax sharing agreement.
Alabama is among the latest of the states to pass Nonadmitted and Reinsurance Reform Act related implementation legislation. During the session NAPSLO provided draft legislation and offered comments on legislation.
The NRRA mandates that beginning July 21, 2011 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.
Alabama’s bill adopts Slimpact-lite, which provides for the creation of a compact commission that would adopt rules on tax allocation, reporting, collection and distribution, and may also adopt uniform insurer eligibility requirements.
The bill provides for exclusive home state regulation of surplus lines compliance, but does not incorporate the NRRA's exempt Commercial Purchaser (ECP) exemption from state diligent search requirements.