In the States

NAPSLO has undertaken a project to increase the amount of regulatory information on the NAPSLO Web Site. A survey will be added to address placement regulations, and surplus lines producer licensing.

NAIC

The NAIC Surplus Lines Task Force met in San Francisco for the first time in a year. Its agenda included receiving a report on the non-admitted and reinsurance reform act (NRRA), a report on SLIMPACT and a discussion of methods to comply with the requirements of the NRRA, should it pass.

The NAIC NARAB working group included in their opinion that requiring non-resident surplus lines brokers to obtain an underlying non-resident P&C license doesn’t violate Graham-Leach-Bliley. NAPSLO will send a second letter to the NAIC on this issue.

Alabama 

HB 162 proposes to require surplus lines brokers to input data for private passenger auto coverage into the state data system.

California

Silvers v. State Board of Equalization, seeks to compel the state’s taxing authority to assess premium taxes against Lexington Insurance Co. (a surplus lines insurer) as an insurer doing business in the state. The compliant names several hundred “Doe” defendants indicating the intent to be an industry-wide action. Success of this complaint would violate NAPSLO Legislative Guiding Principal of “Export” and is being opposed by NAPSLO via an Amicus Brief.      

Florida

HB 601 require’s surplus lines insurers to file forms and rates on policies covering more than three condominium associations. Requiring surplus lines insurers to file forms and rates violates the most fundamental precept of surplus lines insurance and NAPSLO will seek to amend the law.  One possibility is to describe the financial responsibility requirements for the condo association instead of requiring a form and rate filing.

Florida bills SB1422 and HB1001 failed to advance. The bills proposed rate and form deregulation for admitted insurers who issued non-assessable policies for nonresidential commercial property in the state. The measure was opposed by NAPSLO and the Florida Surplus Lines Association. 

Kentucky 

Kentucky is considering HB 524, which would require surplus lines brokers to allocate surplus lines taxes to local governments.  This is one reason the single state tax payment envisioned by the NonAdmitted and Reinsurance Reform Act is needed. 

Louisiana

HB 225 exempts surplus lines from certain laws by providing a clearer statement that surplus lines is exempt from rate and form filing provision.

Minnesota

Legislation has passed to establish a new Stamping Office.  The new stamping office is expected to operating as of January 1, 2009.

New Hampshire

HB 1279 has passed the House and Senate. It provides that “unadmitted” surplus lines companies are not subject to statutory or regulatory provisions unless the statute or regulation specifically references “unadmitted” surplus lines companies. As a result, surplus lines companies will be subject to the unfair trade practices act.

The DOI indicated that there is no state law or statute requiring surplus lines companies to reconcile taxes. However, as this has been a policy of the DOI, failure to do so will result in a recommendation that the company be removed from the white list.

New Jersey

New Jersey proposed imposing reporting requirements on medical malpractice insurers, with no carve-out provision for surplus lines. 

The senate is considering SB 1482 which would expand the Guaranty fund to include Liquor liability.

New York

New York proposed raising the surplus lines capital and surplus requirement, to $45 million from $15 million. A hearing to expand the New York Export List was held June 13, 2008.

Rhode Island

The legislature is considering H 8067 and S 2599 which would remove the requirement that affidavits be filed with the Commissioner. The affidavit requirements and record keeping requirements would continue to exist.

Proposed regulation 110 exempts Surplus Lines from regulation regarding windstorm deductibles and related policyholder notices.

Washington 

Proposed regulation 284-15-010 requires non-resident surplus lines brokers to obtain a non-resident P&C license prior to obtaining a non-resident surplus lines license.  This could be construed to violate Graham Leach Bliley. The non-resident surplus lines exam apparently will be abolished.