State Issues

NAIC

At the NAIC meetings in December, the Government Relations Leadership Council (GRLC) asked the Surplus Lines Task Force to submit comments regarding the Non Admitted and Reinsurance Reform Act (HR 1065 and S 929).   The task force followed up with a  conference call on Dec. 11 and NAPSLO made verbal comments in support of the NRRA during the call. NAPSLO had submitted written comments prior to the call and submitted additional written comments following the call to clarify some points raised by regulators.  The NAIC had surveyed the Commissioners regarding the NRRA, but the surplus lines portions of the survey have not been made public.  We were told the NAIC would make suggestions regarding the NRRA but would not oppose it.  There is no indication that the NAIC has submitted its comments.  NAPSLO also wrote to some of the commissioners whose  comments about the NRRA were made public.

Another development during the NAIC/ GRLC meeting was a proposal to seek federal legislation to compel the states to adopt uniform laws.  The gist of the proposal was that the Federal Government would adopt a law allowing the states a  period of time to come up with uniform laws in certain areas, or a federal agency, such as the U.S. Treasury Department, would write the laws for them. 

The NAIC Producer’s Licensing Subgroup is creating a licensing manual and intends to include a section on Surplus Lines.  NAPSLO submitted comments  about the lack of uniformity and the problem with numerous licensing requirements for the placement of a single policy. 

NCOIL

NAPSLO attended the meetings of the National Conference of Insurance Legislators in Nov. for the purpose of seeking a resolution in support of the Surplus Lines Multi-state Insurance Compact (SLIMPACT).  NAPSLO executive Director Richard Bouhan spoke to the NCOIL State-Federal Relations Committee in support of SLIMPACT.  The NCOIL Executive Committee adopted a resolution supporting SLIMPACT. 

NCSL

Following up on the NCOIL meeting, NAPSLO has joined with other associations to ask the National Conference of State Legislators to endorse SLIMPACT.

SLIMPACT

The group of 60 met at the NAIC meeting in December to review the SLIMPACT draft. The group was still discussing an issue regarding uniform eligibility for insurers so another meeting has been set for mid-January. 

U.S. Treasury

NAPSLO submitted comments to the U.S. Treasury Department in response to the request for input regarding the federal involvement in financial regulation.   NAPSLO’s comments were that with respect to the multi-state problems with surplus lines regulation, federal standards, like those contained  in the NRRA, are a reasonable solution to this particular multi-state compliance problem. 

Surplus Lines Webinar

In January, Dick Bouhan, NAPSLO Executive Director, and I participated in the presentation of a Webinar sponsored by National Underwriter regarding the need for surplus lines regulatory reform.  More than 100 people signed up for the Webinar presentation, including a few legislators. Dan Maher of the Excess Lines Association of New York also participated in the presentation.

NAPSLO PAC Committee

NAPSLO PAC Committee has been reorganizing under the leadership of the new PAC Committee Chairman Kevin Westrope.  PAC forms and PAC processes are being revamped now that a separate PAC committee has been formed.    

AIA

I participated in an AIA conference call with surplus lines insurers to discuss surplus lines compliance issues, including HR 1065 and the interstate compact.

Louisiana 

Louisiana revised Directive 184 to where it applies only to homeowners’ policies in force for three years or more. The original version of directive 184 required surplus lines insurers to provide advance notice of withdrawal from the state.

Kansas  

NAPSLO was asked if surplus lines companies could be found to write mine subsidence coverage for  buildings in KS.  The state was considering forming a state-run fund to cover these losses. NAPSLO was able to locate carriers and brokers willing to look at the risks. 

New Jersey

The group seeking to abolish the NJ surplus lines guaranty fund is preceding with a request to the NJ legislature. 

New York

ELANY has sought to expand the export list and is continuing its discussions with the Department over the scope of the expansion. ELANY has also informed NY eligible surplus lines insurers that the NY Department intends to raise the minimum capital requirements to $45 million. 

California 

Circular SCF – 2007 request information from surplus lines companies from the recent California fires. Information was due January 21, 2008. Although some of the language in the circular seemed to indicate it was only a “request” for information, the state has indicated they think a response is mandatory and not merely a request.