The Pennsylvania Governor has signed into law Nonadmitted and Reinsurance Reform Act (NRRA) compliance related legislation that does not address a compact or tax sharing agreement.
Pennsylvania is the latest state to enact NRRA related implementation legislation. During the session NAPSLO provided draft legislation, offered comments and spoke with representatives of the department of insurance.
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 bringing their laws into compliance.
Pennsylvania's SB 1096 requires the payment of surplus lines tax and independently procured insurance tax based on 100% of the entire premium when Pennsylvania is the home state, without allocation to other states. The bill would maintain annual reporting and payment of surplus lines taxes for surplus lines brokers. It provides for exclusive home state regulation and taxation per the NRRA. The provisions regarding premium tax would be effective for "policies placed after June 30, 2011."
The bill defines home state per the NRRA, incorporates the NRRA's exempt commercial purchaser (ECP) exemption and also incorporates the NRRA's insurer eligibility requirements.
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