NAPSLO issued a Special Report and Legislative Update to provide a special update to note the two-year anniversary of the Nonadmitted and Reinsurance Reform Act (NRRA) and also information on other recent legislative actions and activities.
In addition to the review of the NRRA, other legislative issues covered in the report include NAPSLO approving policy positions on Zero Reporting Requirements and Certificate of Insurance Requirements; its support of federal legislation to reform the National Association of Registered Agents and Brokers (NARAB); and comments on the Federal Insurance Office.
Wednesday, July 25, 2012
Friday, July 20, 2012
States Still Wary of Surplus Lines Compacts, Business Insurance Article Notes
Most states continue to be wary of participating in either of the competing surplus lines tax agreements, a new Business Insurance article reports.
The article, which includes comments from NAPSLO Executive Director Brady Kelley, is available from Business Insurance at http://www.businessinsurance.com/article/20120715/NEWS07/307159973?tags=|311|73|303#full_story
The article, which includes comments from NAPSLO Executive Director Brady Kelley, is available from Business Insurance at http://www.businessinsurance.com/article/20120715/NEWS07/307159973?tags=|311|73|303#full_story
Wednesday, July 18, 2012
South Carolina Gov. Signs NRRA Legislation
On June 29, Governor Nikki Haley of South Carolina signed Senate Bill 1419 into effect, bringing the number of states to implement NRRA legislation up to 49. The new law incorporates most NRRA terms and authorizes the Director of the Department of Insurance to collect and retain surplus lines tax on 100 percent of the premium of risks in which South Carolina is the home state. While NAPSLO recommended South Carolina more clearly utilize the home state definition throughout the legislation, it does include the home state definition consistent with the NRRA. It also authorizes the Director to participate in a clearinghouse arrangement with other states, subject to approval by South Carolina’s General Assembly; however, we are not aware of any specific plans for South Carolina at this time.
In the event a state for whom South Carolina has potentially collected premium taxes is not a member of the Compact, South Carolina will retain its tax at a 6% rate. Therefore, South Carolina becomes the 35th state to implement the home state tax approach now representing near 75% of nationwide premium.
Taxes due shall be remitted to the Department no later than thirty days after March 31st, June 30th, September 30th and December 31st of each year. The 6% tax rate is a blended rate accounting for state and municipal taxes. The Department will continue to be responsible for submitting a portion of the collected tax to the appropriate municipality on an annual basis.
South Carolina did not accept NAPSLO’s recommendation to fully incorporate the insurer eligibility provisions of the NRRA. Instead, the bill provides that, at the request of a licensed resident broker, the Director may approve certain nonadmitted insurers as eligible surplus lines insurers to write business on risks located in South Carolina that one or more South Carolina licensed insurers have declined to write. It also allows the Director to require additional documents to maintain the insurers' status as an eligible surplus lines insurer.
With South Carolina’s law, Michigan and Washington, D.C. are the only jurisdictions who have not yet introduced NRRA legislation to clarify the national NRRA landscape. We have no word yet on when we might see legislative action in those states, but the continued growth in home-state taxation continues to be positive and beneficial for surplus lines brokers.
Comprehensive information on 2012 legislation in South Carolina and other states is available on NAPSLO’s website, in addition to a number of NRRA resources.
In the event a state for whom South Carolina has potentially collected premium taxes is not a member of the Compact, South Carolina will retain its tax at a 6% rate. Therefore, South Carolina becomes the 35th state to implement the home state tax approach now representing near 75% of nationwide premium.
Taxes due shall be remitted to the Department no later than thirty days after March 31st, June 30th, September 30th and December 31st of each year. The 6% tax rate is a blended rate accounting for state and municipal taxes. The Department will continue to be responsible for submitting a portion of the collected tax to the appropriate municipality on an annual basis.
South Carolina did not accept NAPSLO’s recommendation to fully incorporate the insurer eligibility provisions of the NRRA. Instead, the bill provides that, at the request of a licensed resident broker, the Director may approve certain nonadmitted insurers as eligible surplus lines insurers to write business on risks located in South Carolina that one or more South Carolina licensed insurers have declined to write. It also allows the Director to require additional documents to maintain the insurers' status as an eligible surplus lines insurer.
With South Carolina’s law, Michigan and Washington, D.C. are the only jurisdictions who have not yet introduced NRRA legislation to clarify the national NRRA landscape. We have no word yet on when we might see legislative action in those states, but the continued growth in home-state taxation continues to be positive and beneficial for surplus lines brokers.
Comprehensive information on 2012 legislation in South Carolina and other states is available on NAPSLO’s website, in addition to a number of NRRA resources.
Wednesday, July 11, 2012
Keri Kish Named Director of Government Relations
NAPSLO is pleased to announce Keri Kish has joined the NAPSLO team as Director of Government Relations for the Association.
“We are thrilled to have Keri on the NAPSLO team. Her background and experience will be a tremendous asset to the NAPSLO membership as we continue our work on a number of issues facing the surplus lines industry at the state and federal level," said Brady Kelley, NAPSLO Executive Director.
As Director of Government Relations, Ms. Kish will be responsible for implementing the membership’s regulatory and legislative outreach directives and continuing to build upon NAPSLO’s strong reputation as a premier source of information and advocacy for the surplus lines industry.
Previously, Ms. Kish served as Antifraud Counsel at the National Association of Insurance Commissioners in Kansas City, Mo. Prior to joining the NAIC in 2006, she was a Staff Attorney at the Kansas Insurance Department for Commissioner Sandy Praeger. She began her career as Assistant County Attorney with the Ford County (Kan.) Attorney's Office.
While at the NAIC, she provided senior staff support to insurance fraud and multistate market conduct settlement task forces and working groups, acted as a liaison for the membership with associations and governmental agencies and provided membership support services to state insurance regulators. She was the Administrating Attorney at the Kansas Insurance Department of the Kansas Workers’ Compensation Fund.
Ms. Kish received her law degree from Washburn University’s School of Law in 1998 and an undergraduate degree in political science from the University of Kansas.
“We are thrilled to have Keri on the NAPSLO team. Her background and experience will be a tremendous asset to the NAPSLO membership as we continue our work on a number of issues facing the surplus lines industry at the state and federal level," said Brady Kelley, NAPSLO Executive Director.
As Director of Government Relations, Ms. Kish will be responsible for implementing the membership’s regulatory and legislative outreach directives and continuing to build upon NAPSLO’s strong reputation as a premier source of information and advocacy for the surplus lines industry.
Previously, Ms. Kish served as Antifraud Counsel at the National Association of Insurance Commissioners in Kansas City, Mo. Prior to joining the NAIC in 2006, she was a Staff Attorney at the Kansas Insurance Department for Commissioner Sandy Praeger. She began her career as Assistant County Attorney with the Ford County (Kan.) Attorney's Office.
While at the NAIC, she provided senior staff support to insurance fraud and multistate market conduct settlement task forces and working groups, acted as a liaison for the membership with associations and governmental agencies and provided membership support services to state insurance regulators. She was the Administrating Attorney at the Kansas Insurance Department of the Kansas Workers’ Compensation Fund.
Ms. Kish received her law degree from Washburn University’s School of Law in 1998 and an undergraduate degree in political science from the University of Kansas.
Monday, July 09, 2012
Reminder - Free Webinar on Surplus Lines Fundamentals Course is Tuesday
A free webinar on the new online course titled Surplus Lines Fundamentals, is set for Tuesday, July 10, at 2:00 p.m., Eastern Daylight Time. In May, The Institutes and NAPSLO unveiled the course in May and the two groups will offer the free webinar reviewing the course, which is designed for anyone who wants to learn how the surplus lines market works.
The webinar will:
To register for the webinar, use the following link: http://customerrelations.theinstitutes.org/acton/form/2211/0003:d-0002/0/index.htm
The course represents the newest addition to NAPSLO’s online course offerings and is ideal for training new hires of surplus lines insurers, wholesale brokers, managing general agents, and program managers. It will also serve retail agents and brokers who want to learn how to access the surplus lines market when they encounter a hard-to-place risk.
Learners who complete the course and built-in assessments earn an online certificate of completion. A separate online exam will be required only if the learner wishes to earn continuing education (CE) credit. The Institutes are filing the course for CE credit in all but two states; however, it will eventually be filed in all states. The course fee is $65 with CE credit or $60 without the CE credit option.
The webinar will:
- Provide an overview of the course content
- Describe the intended audiences for the course
- Offer suggestions for adding the course to your training programs
- Show how this course can prepare learners for the ASLI designation program
To register for the webinar, use the following link: http://customerrelations.theinstitutes.org/acton/form/2211/0003:d-0002/0/index.htm
The course represents the newest addition to NAPSLO’s online course offerings and is ideal for training new hires of surplus lines insurers, wholesale brokers, managing general agents, and program managers. It will also serve retail agents and brokers who want to learn how to access the surplus lines market when they encounter a hard-to-place risk.
Learners who complete the course and built-in assessments earn an online certificate of completion. A separate online exam will be required only if the learner wishes to earn continuing education (CE) credit. The Institutes are filing the course for CE credit in all but two states; however, it will eventually be filed in all states. The course fee is $65 with CE credit or $60 without the CE credit option.
Tuesday, July 03, 2012
NIMA Clearinghouse Updates; Nevada Withdraws
The NIMA Surplus Lines Clearinghouse has announced that Nevada
submitted a notice of withdrawal from NIMA on June 29, 2012. On July
2nd, Nevada released Bulletin 12-005 indicating it will collect 100% of
the nonadmitted insurance premium tax when Nevada is the home state of
the insured. Where Nevada is not the home state of the insured, no
premium tax filing in Nevada will be required.
Based on the resolution approved by the NIMA states on June 12th, Nevada will not be considered a NIMA participating state for the purposes of filing and allocating taxes for new and renewal policies effective on or after July 1, 2012 where the home state of the insured is a NIMA participating state. The remaining five NIMA states (Florida, Louisiana, South Dakota, Utah, and Wyoming) and Puerto Rico represent 17 percent of nationwide surplus lines premium. Thirty-four states, representing 73 percent of nationwide premium volume, have no current plans to participate in tax-sharing agreements and are collecting 100% of the surplus lines premium tax when they are the home state.
In its July 1st press release, the Surplus Lines Clearinghouse announced reporting entities may register to begin filing with the Clearinghouse by visiting www.slclearinghouse.com. It noted policies filed through the Clearinghouse during the 3rd quarter will be invoiced on October 1st. Tutorials are available on the Clearinghouse website at http://www.slclearinghouse.com/Education/VideoLibrary.aspx.
On July 2nd, the Surplus Lines Clearinghouse released the NIMA States Tax Table to serve as a guide for brokers and policyholders when determining the applicable taxes, fees, and assessments charged by the NIMA participating states. It highlights some of the nuances among the NIMA states, which include:
1. Louisiana and Utah will not collect any tax on premium allocated to a state that is not participating in NIMA (a non-participating state);
2. Florida is the only NIMA state that will tax premium allocated to non-participating states at each non-participating state’s tax rate. When either Puerto Rico, South Dakota or Wyoming are the home state, they will apply their home state tax rate to any premium allocated to a non-participating state.
3. Utah is the only NIMA state that will apply a stamping fee to Utah allocated premium.
4. Florida and South Dakota apply certain assessments and tax rates to certain premium and specific lines of coverage.
Reporting entities are encouraged to review the NIMA State Tax Table and the Surplus Lines Clearinghouse Tax Calculator for help in navigating the tax rates, fees and assessments to be charged by the NIMA states on nonadmitted, multi-state insurance premium to be filed through the Clearinghouse.
Please make sure to check out our recent E-News updates regarding recent NIMA developments. They can be found at http://www.napslo.org/imispublic/Content/NavigationMenu/News/ENews/2012/default.htm. Please don’t hesitate to contact the NAPSLO office at (816) 741-3910 should you have any questions or need any additional information.
Based on the resolution approved by the NIMA states on June 12th, Nevada will not be considered a NIMA participating state for the purposes of filing and allocating taxes for new and renewal policies effective on or after July 1, 2012 where the home state of the insured is a NIMA participating state. The remaining five NIMA states (Florida, Louisiana, South Dakota, Utah, and Wyoming) and Puerto Rico represent 17 percent of nationwide surplus lines premium. Thirty-four states, representing 73 percent of nationwide premium volume, have no current plans to participate in tax-sharing agreements and are collecting 100% of the surplus lines premium tax when they are the home state.
In its July 1st press release, the Surplus Lines Clearinghouse announced reporting entities may register to begin filing with the Clearinghouse by visiting www.slclearinghouse.com. It noted policies filed through the Clearinghouse during the 3rd quarter will be invoiced on October 1st. Tutorials are available on the Clearinghouse website at http://www.slclearinghouse.com/Education/VideoLibrary.aspx.
On July 2nd, the Surplus Lines Clearinghouse released the NIMA States Tax Table to serve as a guide for brokers and policyholders when determining the applicable taxes, fees, and assessments charged by the NIMA participating states. It highlights some of the nuances among the NIMA states, which include:
1. Louisiana and Utah will not collect any tax on premium allocated to a state that is not participating in NIMA (a non-participating state);
2. Florida is the only NIMA state that will tax premium allocated to non-participating states at each non-participating state’s tax rate. When either Puerto Rico, South Dakota or Wyoming are the home state, they will apply their home state tax rate to any premium allocated to a non-participating state.
3. Utah is the only NIMA state that will apply a stamping fee to Utah allocated premium.
4. Florida and South Dakota apply certain assessments and tax rates to certain premium and specific lines of coverage.
Reporting entities are encouraged to review the NIMA State Tax Table and the Surplus Lines Clearinghouse Tax Calculator for help in navigating the tax rates, fees and assessments to be charged by the NIMA states on nonadmitted, multi-state insurance premium to be filed through the Clearinghouse.
Please make sure to check out our recent E-News updates regarding recent NIMA developments. They can be found at http://www.napslo.org/imispublic/Content/NavigationMenu/News/ENews/2012/default.htm. Please don’t hesitate to contact the NAPSLO office at (816) 741-3910 should you have any questions or need any additional information.
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