NAPSLO Officials Pleased Goal of Reforming Surplus Lines Regulation Realized
July 21 - NAPSLO officials are pleased that the industry’s goal to reform and modernize surplus lines regulation and premium tax laws has been accomplished with the signing of the Restoring American Financial Stability Act of 2010 by President Obama.

"NAPSLO is pleased to see its efforts to establish a more rational and efficient method of paying surplus lines taxes and conducting multi-states surplus lines transactions become a reality. NAPSLO’s goal over the next year is to work with the states as they implement the reforms set forth in this legislation,” said NAPSLO Executive Director Richard Bouhan.

Originally introduced as the Nonadmitted and Reinsurance Reform Act (NRRA), the legislation passed the House of Representatives three times in the past four years and was included in both the House and Senate versions of the financial overhaul legislation and has now become law

"Proper implementation of this bill will provide benefits to surplus lines brokers as they no longer will have to deal with confusing and contradictory tax payment laws," said NAPSLO President Marshall Kath. "Standardizing tax payments will also provide benefits to consumers and the industry by making the process more efficient."

The surplus lines reforms state that only one state, the home state of the insured, may require a tax on a surplus lines transaction and the insured’s home state has the sole authority to regulate the placement of a multi-state surplus lines transaction. Currently, multiple states tax and regulate the placement of multi-state surplus lines transactions. These changes will benefit the insurance consumer who ultimately pays the increased cost of the current inefficient and overlapping regulatory and tax payment system for surplus lines insurance.

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 more than 1,600 member offices in the United States, Canada, Germany, and England.