Federal Legislation

The U.S. House of Representatives and the U.S. Senate are currently reviewing versions The Nonadmitted Insurance and Reinsurance Reform Act of 2007, which was introduced in early 2007 as HR 1065 in the House by Rep. Dennis Moore (D-Kan.), and as S 929 in the Senate by Senators Mel Martinez (R-FL) and Bill Nelson (D-FL) 

The bills would significantly increase the level of efficiency in purchasing surplus lines insurance for all those involved in the surplus lines transaction---from the insurance companies to the consumers.  This legislation will be particularly helpful to those buyers finding limited availability of insurance for their specific risks and to those businesses and individuals located in areas ravaged by natural disasters which have limited the amount of insurance offered by standard insurance companies. 

Several states are looking at forming an Interstate Compact to address many of the same issues. A chart comparing the compact and HR 1065 is available to download. 

A paper on why NAPSLO supports HR 1065 is also available for download.

The Nonadmitted Insurance and Reinsurance Reform Act of 2007 would create: 

• a uniform system of premium tax allocation and remittance for surplus lines premium taxes              
• uniform national standards for surplus lines insurer eligibility              
• one-state compliance on multi-state surplus lines risks              
• direct access to the surplus lines market for sophisticated commercial purchasers, and               
• more efficiency in licensing surplus lines brokers through use of a national data base

Rep. Moore and Rep. Ginny Brown-Waite (R-Fla.) submitted H.R. 1065, which also had several co-sponsors including Financial Services Ranking Member Rep. Spencer Bachus (R-Ala.), and Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises Chairman Paul Kanjorski (D-Penn.).  

The Florida Senators introduced S929 as part of six pieces of legislation they introduced to comprehensively address hurricane and other natural disaster issues in the near and long term for Florida and the nation.

The bill is similar to the “Nonadmitted and Reinsurance Reform Act of 2006" (H.R. 5637) that Rep. Moore cosponsored with Rep. Brown-Waite in the last legislative session.  H.R. 5637 was approved 417-0 by the House in September, but wasn’t taken up by the Senate.

The legislation, in part, is aimed at making access to the surplus lines market easier for consumers and the brokers and agents who assist them. The “Nonadmitted and Reinsurance Reform Act of 2007” would establish national standards for state regulation of the surplus lines and reinsurance markets including a uniform system of surplus lines premium taxation, elimination of duplicative compliance requirements for multi-state surplus lines transactions and direct access to the surplus lines market for large commercial insurance buyers.