Wednesday, June 08, 2011

Kentucky Issues Advisory Opinion on Impact of NRRA on State

The Kentucky Insurance Department has issued an Advisory Opinion to clarify the Department’s expectations of the compact provisions of Kentucky's new law (HB 167) which brings the state into compliance with the Nonadmitted and Reinsurance Reform Act (NRRA). The NRRA become effective July 21, 2011.

The bill authorizes the State to become a Compacting State under the Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT)  but the opinion outlines how the state will follow the NRRA until the the compact comes into existence. The Kentucky also law amends provisions of Kentucky law to establish one uniform tax rate that would apply to non-admitted insurance on multi-state risks.

This Advisory Opinion also reviews provisions of the NRRA that preempt current Kentucky state law governing non-admitted insurance on multi-state risks. The Advisory Opinion notes that after July 21, 2011, NRRA preempts the following provisions of Kentucky law: Home State, Licensure Requirements, Exempt Commercial Purchaser, and Taxation on Non-Admitted Insurance on Multi-State Risks, and the opinion goes into detail on each area.

No comments: