 |
 |
||
|
|
|||
During the program, NAPSLO Executive Director Richard Bouhan, Director of Legislative Relations Steve Stephan, and Maria Berthoud of B&D Consulting, reviewed current federal and state issues.
Ms. Berthoud said that economic issues were currently at the forefront of Congress, and one of their major concerns is how to prevent future problems such as arose with AIG. One proposed solution is to create a systemic risk regulator under the direction of the Federal Reserve.
The impact of AIG problems is affecting a number of financial institutions and currently, many banks are undergoing stress tests to see if they are solvent and can survive. While these issues may not directly impact the industry, Ms. Berthoud said the issues could make it difficult for Congress to give attention to surplus lines concerns.
She reviewed the progress of the previous versions of the Nonadmitted Reinsurance and Reform Act (NRRA) in the 109th and 110th Congressthat were sponsored by Rep. Dennis Moore (D-KS) and Rep. Ginny Brown-Waite (R-FL). Rep. Moore and Rep. Scott Garrett (R-NJ) have announced they will introduce the bill in the House in the 111th Congress.
The House passed the NRRA in its two previous sessions and the Senate Banking Committee held a hearing on the bill in July 2008, where Mr. Bouhan testified. Ms. Berthoud noted that during the Senate hearings industry representatives were asked if they could support the surplus lines bill, and all said "yes", showing the strong support for the bill.
Ms. Berthoud said that a coalition of surplus lines firms and organizations has been formed to keep the industry focused and working together as part of the effort to get the bill through both the House and Senate.
She mentioned that a number of issues, including TARP, the Madoff ponzi scandal, the auto bailout, and the review of Fannie Mae and Freddie Mac are currently occupying the Senate Banking Committee.
"We have our work cut out for us to pull our bill out of the middle of all of this, but we are hoping to be successful," she said.
On the House side, Ms. Berthoud noted that in addition to the NRRA, the House Financial Services Committee is reviewing a number of items. Included are a new version of the Optional Federal Charter bill, formation of an Office of Insurance Information, and review of the Risk Retention Act and NARAB.
Mr. Bouhan noted that while NAPSLO continues to make progress on its issues and a lot of work had been done during the past five years since the first NAPSLO representatives visited Washington, D.C. in February 2004.
"We realized at the time that if we were really going to progress with this, we would need a full-time voice in Washington and we needed to have a lobbyist," Mr. Bouhan said. "What supports their efforts is the NAPSLO PAC."
Mr. Bouhan noted that contributions by the PAC had, with one exception, been made to successful candidates in 2008. He said the PAC backs candidates from the major committees reviewing surplus lines legislation who share the industry's views.
On the state side, Mr. Stephan reviewed the current issues and outlined three trends at the state level: more regulation of personal lines in surplus lines insurance; states seeking more medical malpractice data; and proliferation of licenses for surplus lines brokers.
Mr. Stephan said the problem with data collection is that the information is not comparable, as it is inconsistent and would be difficult to offer a 50 state comparison. He said state requirements in some cases can lead to needing 50 licenses for a 50 state risk, which the states may not realize could help promote a push for federal regulation.
In addition, Mr. Stephan reviewed the current status of the Zota v. Essex case regarding what constitutes delivery of a policy. In that 2008 case, the Florida Supreme Court ruled that delivery of the policy from the broker to retailer constitutes delivery for the broker even if it wasn't delivered to the customer.
The major part of the case was the ruling that said while the statute included language that the chapter involved did not impact surplus lines, the court said that was only because of a transcription error, and the rules did involve surplus lines.
To remedy this situation, NAPSLO and a number of organizations are currently working with legislators on a bill. |
|
|
|
