The Oregon Governor recently signed into law Nonadmitted and Reinsurance Reform Act (NRRA) compliance legislation that allows the director of the Department of Consumer and Business Servies, following legislative approval, to enter into a compact or to otherwise establish procedures with other states to allocate premium taxes.
Oregon is among the latest states 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 is 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.
Oregon's HB 2679 does not implement all NRRA mandates, though it does adopt the NRRA's exempt commercial purchaser (ECP) exemption from the diligent search requirement (and allows the director to waive the requirement for additional commercial insureds based on criteria that are more liberal than the ECP criteria). The bill also adds definitions for "home state," "affiliated group" and "control."
HB 2679 provides that after receiving express legislative approval, the Director of the Department of Consumer and Business Services is authorized to enter into a compact or to otherwise establish procedures with other states to allocate among the states the premium taxes paid to an insured's home state.
The bill also imposes a tax on independently procured insurance (same rate of 2% as for surplus lines) which Oregon does not currently have. Both the independent procurement and surplus lines tax would be imposed only on the premiums attributable to Oregon exposures. The bill also requires surplus lines licensees to pay a state fire marshal tax "equal to 0.3 percent of the premium or fees charged by the insurer or the insurer's agents and other intermediaries for the insurance."
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