History

During the 1960s several states had surplus lines associations that functioned effectively, but no organization represented the surplus lines industry on a national level. By 1970 many believed there was a need for a national organization.

In the early 1970s Charles A. McAlear began the initial organizational efforts to form a surplus lines association. The December 1973 Specialty Coverage Market Reports carried the following item:
"Plans for formation of a National Association of Professional Excess & Surplus Line Offices were reviewed by a steering committee at the recent annual meeting of the National Association of Independent Insurers."

The committee members were listed as Richard Hull, Robert Schultz, Jim Parr, and Charles McAlear.

Association is Organized
In 1974 at the NAII meeting in Miami Beach NAPSLO took formation with an organizational meeting at the Eden Roc Resort where an ad hoc board of directors was elected.

During the following 12 months NAPSLO was formalized with incorporation papers filed in New York in September 1975 by the law office of Abrams & Martin, which handled the Association's work for the first few years.

The first official NAPSLO annual meeting took place in conjunction with NAII meeting at the Las Vegas Hilton in November 1975. The Association's initial membership was 62, and Charles A. McAlear was elected the first president.

Mr. McAlear served as president for two years. In 1977 Dana Roehrig was elected the second president of NAPSLO. Membership had increased to 231 firms.

The 1978 convention in San Francisco was the first NAPSLO convention not held in conjunction with the NAII meeting. By the time of the convention NAPSLO had designed its logo with the saying "Uberrima Fides" - In Utmost Good Faith.

In 1979 NAPSLO changed its membership structure, establishing three membership types - Regular (Wholesaler), Company, and Supporting (Associate). Membership had increased to 360 firms.

NAPSLO Moves to Georgia
For the first few years NAPSLO operated out of its New York law firm's office, but in 1979 NAPSLO established its own office in Georgia. Dale Bohm was hired as Executive Director. In 1981 NAPSLO hired Richard Bouhan as Government Relations Director, and Dr. Samuel Weese of Eastern Kentucky University was commissioned to conduct a study of the industry and guaranty funds. His report was entitled A Study of Surplus Lines Insurance and the Insolvency Issue. Several years later Dr. Weese followed that report with Surplus Lines Insurance: The Misunderstood Market.

Also in 1981 the summer internship program was established. Two interns were selected and placed with member firms. Each year since 1981 six to eight students have been selected for the program and a number of interns have gone on to work for NAPSLO member firms.

In 1982 Company members were made full-fledged voting members of the Association, membership passed 600 and convention registration passed 1,200. The traditional fall Committee Day meeting was also established in 1982.

In 1983 the Security & Review project was conceived to make available current financial information on surplus lines companies. Georgia State University produced the report until the mid-1990s when the A.M. Best Co. took over the project. On the broker side, Russell Miller Inc. was commissioned in 1984 to undertake an industry wide income and expense survey of NAPSLO members. The first report was issued in 1985.

In 1987 NAPSLO offered a Mid-Year Educational Workshop, reinstituting a two meeting a year format which had been dropped in the early 1980s.

Goin' to Kansas City
In 1988 NAPSLO moved its offices to Kansas City, Missouri to be more accessible to the membership and to other insurance associations. Richard Bouhan was named Executive Director and membership exceeded 750.

Press coverage of a panel discussion on consumerism at the 1989 Annual Convention in New York brought the industry a great deal of attention because of comments one industry panelist made questioning the motives of consumer advocates.

In 1990 NAPSLO completed an examination of its membership through the Requalification Project.

Following discussions regarding improving the educational opportunities for members in the industry, the Board established an Excess & Surplus Lines School. The first school took place in 1990 at the University of Vermont.

In a similar vein, with assistance from Western World Insurance Company, the NAPSLO Board established the Derek Hughes/NAPSLO Educational Foundation in 1991 to promote and improve education in the industry. Over the years, firms such as the Scottsdale Insurance Co., General Reinsurance/General Star Indemnity, and Swiss Re have made significant contributions to assist the Foundation.

Settling the Solvency Issue
In response to continued questions regarding the solvency of the surplus lines industry, in 1994 the Foundation commissioned the A.M. Best Co. to examine the issue. A.M. Best's report, Insolvency Study of the Excess & Surplus Lines Industry, showed the solvency record of the surplus lines industry was as good as, if not better than the overall industry.

The solvency study was issued at the 20th Annual Convention in New Orleans where official registration topped 2,000. In 1993 NAPSLO had altered its convention format to include an open day on Thursday for members to schedule meetings, giving the meeting more value.

A.M. Best produced a follow-up solvency report in 1995, titled the Solvency Study of the Excess & Surplus Lines Industry, and it also showed a strong solvency record. The A.M. Best report has become an annual publication with the name changed to the Annual Review of the Excess & Surplus Lines Industry.

Educational Programs Expanded
Based on comments from students attending the Excess & Surplus Lines School, plans for an Advanced School were developed. The Advanced School was established in 1995 and took place in Indianapolis the same week the E&S School was being offered. The two schools were later separated, with the E&S School taking place in the summer, and the Advanced School taking place in the fall.

Separately the Foundation began working with the Insurance Institute of America to establish a designation program to focus on surplus lines. The Associate in Surplus Lines Insurance (ASLI) designation was established in 1996 and the first designations were conferred in 1997.

In order to explain the intricacies of the E&S industry to regulators, NAPSLO worked with the National Association of Insurance Commissioners to develop a school for regulators. The first school took place at NAIC offices in 1995, and was also offered from 1996 to 1998. Starting in 2000 the school was be offered every other year.

Educational programs were also increased at the Mid-Year Educational Workshop, and attendance has increased to approximately 600.

Planning for the Future
With attendance averaging more than 3,000 the past few years, NAPSLO's convention continues to be recognized as one of the top industry meetings of the year and allows members excellent networking opportunities. In 2006 more than 3,400 people attended the annual convention and nearly 700 attended the Mid-Year Workshop.

In order to ensure that the convention and other programs continue to meet the needs of its members, in 1996 NAPSLO established a Strategic Planning Committee. The committee reviewed NAPSLO's goals and established a "roadmap" to use in the future. The resulting Strategic Plan was unveiled at the 1997 convention and since then the document has been reviewed several times to ensure it was up to date.

In a survey in conjunction with the 1996 planning, NAPSLO members identified technology as a prime area where they would like to see assistance. KPMG Peat Marwick was then selected to perform a study on the use of technology in the industry. The study was conducted in 1998, and the results were presented at the 1999 NAPSLO Mid-Year Workshop.

In response to increase need for technology assistance, in 2001, NAPSLO named a Director of Communications & Technology to be a resource for NAPSLO members to utilize regarding technology issues confronting the surplus lines insurance industry. NAPSLO is currently working with other organizations, such as ACORD, AAMGA, and the IIABA's technology group, Agents Council for Technology (ACT) to assist in making members views known.

 

Legislative Issues
Legislative actions maintain an important role for the Association and in 2003 the NAPSLO Board adopted a set of nine Regulatory Principles aimed at guiding the Association in its response to legislation/regulatory issues affecting in E&S industry at both the state and federal level.

 

Four of those points- freedom of rate and form; automatic export, uniform licensing, and uniform approach to payment of premium taxes - are points the Association is promoting in discussions on potential federal changes to insurance regulation.

 

To assist with legislative issues NAPSLO signed an agreement with B&D Consulting in Washington, D.C. in 2005 to serve as the Association's representative in Washington. In the 109th and 110th Congress B&D worked with NAPSLO to get the Non Admitted Reinsurance Reform Act introduced and passed by the House of Representatives. The bill was introduced in the Senate in the 110th Congress and the Senate Banking Committee reviewed the bill during hearings on insurance regulation but did not vote on the bill. The bill is expected to be introduced in the House and Senate in the 111th Congress.

 

While federal issues have been at the forefront for the Association, in 2006 NAPSLO added a Director of Government Relations position to assist with the numerous state issues facing the industry.