NAPSLO Applauds Senate for First Step in Surplus Lines Reform

March 23, 2010 - The National Association of Professional Surplus Lines Offices, Ltd., applauds the Senate Banking Committee for taking the first step in approving surplus lines reform legislation when the Committee voted on Monday to approve, and move to the full Senate, financial services reform legislation.

The bill, entitled Restoring American Financial Stability Act of 2010 was introduced last week by committee Chairman Christopher J. Dodd (D-Conn.) and includes surplus lines reform language.

The surplus lines reform language was taken from the Nonadmitted and Reinsurance Reform Act (SB 1363 / HR 2571) which has already passed the House three times, most recently in September 2009, without a single vote against it.

"We are pleased to see the Senate make this important first step toward approving needed surplus lines reform legislation," said Richard Bouhan, NAPSLO Executive Director. "With the inclusion of these reforms in the bill we are moving closer to more efficient and effective regulation of the surplus lines insurance market."

When enacted, these surplus lines modernization provisions will make access for insurance consumers to the surplus lines market, where insurance for difficult and hard to insure risks can be found, quicker and more efficient and the payment of surplus lines taxes, particularly on multi-state risks, easier and less burdensome for the surplus lines broker. In addition, multiple, duplicative and overlapping compliance requirements will be eliminated on surplus lines policies that insure risks across state lines. This will also benefit the insurance consumer who ultimately pays the price of the current dysfunctional and costly regulatory system for surplus lines insurance

"We look forward to the full Senate approving the surplus lines legislation and for the House and Senate to work together to reconcile the two bills," said Maria Berthoud of B&D Consulting, who represents NAPSLO in Washington, D.C. "Ultimately we look forward to the language being signed into law."

The overall bill contains a whole host of changes regarding the regulation of insurance and other financial services and NAPSLO is currently reviewing those from the surplus lines perspective.

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.