NAPSLO Applauds House Inclusion of Surplus Lines Language in Approved Bill
December 11 - The National Association of Professional Surplus Lines Offices (NAPSLO) applauded the inclusion of surplus lines reform language in the Wall Street Reform and Consumer Protection Act of 2009, which was passed by the House on Friday.
The language, part of an amendment offered by Rep. Dennis Moore (D-KS) and Scott Garrett (R-NJ), establishes that the tax policies, licensing and other regulatory requirements of the home state of policyholders govern surplus lines transactions.
“NAPSLO and the surplus lines industry have been seeking reform regarding tax remittance and regulation of multistate surplus lines transactions for many years and are pleased to see it as part of the bill,” said NAPSLO President Marshall Kath. “With the House and Senate taking up the language as part of reform legislation we are hopeful that the issue will be solved."
For the past two years, NAPSLO has led the Surplus Lines and Reinsurance (SLR) Coalition of industry trade groups which has worked to educate Members in the House and Senate of the benefits of this legislation.
The bill (H.R. 4173) would reform financial services regulation and create a Federal Insurance Office, a Consumer Financial Protection Agency (CFPA) and Financial Stability Council. Rep. Moore and Garrett’s amendment specifies that surplus lines transactions be governed by the home state of the policyholder.
“By establishing that the home state of the policy holder governs a transaction the surplus lines industry would no longer face trying to comply with confusing and conflicting laws and regulations of multiple states on a multistate transaction,” said NAPSLO Executive Director Richard Bouhan. “The Surplus Lines industry should be governed by one set of consistent rules on a transaction and this amendment will do that.”
Recently the Senate Banking Committee also began looking at Financial Services Reform under a bill entitled "American Financial Stability Act of 2009," and Banking Committee Chair Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) also worked to incorporate similar surplus lines reform language in the Senate financial services modernization legislation.
Surplus lines reform language has already passed the House three times, most recently on September 9, 2009, without a single negative vote. If enacted the surplus lines modernization language will make the payment of surplus lines taxes, particularly on multi-state risks, more efficient and less burdensome to the surplus lines broker and will benefit the insurance consumer who ultimately pays the price of the current dysfunctional and costly tax remittance system. In addition, multiple, duplicative and overlapping compliance requirements will be eliminated on surplus lines policies that
insure risks across state lines.
“Through our work with Members of the House and Senate, Congress understands the need for establishing consistent rules for the surplus lines industry. We will continue to work with Members and staff to explain the benefits of this legislation to the industry and to consumers in order to have this bill passed and made into law,” said Maria Berthoud of B&D Consulting who represents NAPSLO in Washington, D.C.
BACKGROUND
NAPSLO is a national trade association representing the surplus lines insurance industry. Risks are placed with the surplus lines market when they cannot be placed in the admitted/licensed market. NAPSLO represents surplus lines insurance agents/brokers and surplus lines insurance companies and has approximately 1,600 member offices in the United States, Canada, Germany, and England.
