Legislative Report - In The States
by Steve Stephan

NAIC
NAPSLO submitted comments to the NAIC Statistical Information Task Force regarding the Medical Malpractice Closed Claim Reporting Model Law.  NAPSLO argued that the GAOÕs report (citing a lack of medical malpractice data) did not lead to the conclusion that additional data would explain rising medical malpractice insurance rates.   

The NAIC Surplus Lines Task Force held a teleconference in April and the main topic was the interstate compact.

California
There are several California bills that could impact surplus lines.

HB 1639 requires an organization with a surplus lines broker's license to immediately file an application with the insurance commissioner if they wish to change people allowed to transact business under their license.

AB 1051 exempts insurance issued to governmental agencies for the purpose of environmental remediation work from the requirements of the surplus lines laws, including the collection of surplus lines tax.

AB 522 makes permanent the law which allows purchasers of insurance issued by non-admitted insurers the right to cancel certain policies within 5 days and to prorate the premium.  

Colorado
Legislation did not pass on a Colorado bill that would have required surplus lines insurers to post notices of their rate increases on the website of the Colorado Insurance Department.  

Florida
Florida adopted legislation applicable to surplus lines that requires the signature of the insured on a form acknowledging that insurance is available from Citizens Property Insurance Corporation.

Florida has also proposed changes to a regulation requiring insurers, including surplus lines insurers, to submit medical malpractice claims data.   

HB 1381 has been approved. The bill would require the insurance department to approve the surplus lines agent manual currently published by the Florida Services Office. The bill increases the departmentÕs enforcement capabilities for violation of the provisions of the manual.  

Florida recently adopted rule 160-142.015 relating to standardized requirements applicable to insurers after hurricane or natural disasters. NAPSLO objected that the provisions should not apply to surplus lines insurers and that some of the data required by the rule was not available.  

Indiana
Indiana has passed legislation to remove the bond requirement imposed on a surplus lines broker.

Louisiana
Louisiana is discussing a couple of interesting surplus lines bills.  One would codify the freedom of rate and form for surplus lines. The other eliminates the surplus lines tax.

Louisiana's disclosure  form  contained in bulletin No. 06-06 was interpreted by the department to apply to surplus lines insurers. The disclosure form identifies coverages contained within the policy. The standard form may need to be modified for surplus lines insurers.  

Massachusetts
Massachusetts HB 1119 would allow alien surplus lines insurers to write business in Massachusetts.   

Mississippi
Mississippi is adopting legislation requiring insurers, including surplus lines insurers writing homeowners, to provide a "policyholder's bill of rights" to consumers.    

NAPSLO submitted written objections to Mississippi regarding a proposal that surplus lines insurers remit an assessment to the windstorm underwriting association.  The legislation was changed so that the assessment was imposed on the insured and remitted by the broker.

Nebraska
NAPSLO has submitted objections to a Nebraska ÒNoticeÓ that requires broker tax filings to identify the company wherein the coverage was placed.    

Oklahoma
Oklahoma has a proposal pending to eliminate the requirement that coverage cannot be procured from authorized insurers.  

Texas
Texas legislation was proposed that would authorize the Controller to enter into multi-state agreements, such as a compact, for the collection of surplus lines tax. Although this appears premature, it was proposed at this time because the legislature meets every other year.   

Texas SB 1473 would require that a surplus lines insurer that is not an affiliate of a licensed insurer may only write property insurance in the state if it also writes wind insurance in the state.

Utah
Utah rule R590-157 clarifies that the courtesy filing fee is not to be included in the policy premium when calculating the premium tax.

Washington
Washington SB 5263 amended the medical malpractice claims reporting law to provide that "if an unauthorized insurer refuses to report closed claims and asserts a federal exemption or other jurisdictional preemption, the facility or provider must report all data required by this chapter on behalf of an unauthorized insurer."