OKLAHOMA—The following bills passed:

 

Oklahoma SB 700 allows compulsory auto liability insurance for commercial auto to be issued by surplus lines insurers.

 

Oklahoma SB 1022 amends the medical malpractice closed claim reporting requirements. The definition of "insuring entity" in the bill includes “an unauthorized insurer that provides surplus lines coverage.”

 

Oklahoma SB 1275 imposes fees on surplus lines insurers to fund regulatory duties of the Department of Insurance.

 

OREGON—Oregon SB 127 allows surplus lines insurers to provide auto coverage under the financial responsibility provisions. The bill is passed.

 

PENNSYLVANIA—PA HB 1415 allows business entities to be eligible for surplus lines licensing if they comply with the bills many provisions including designating an officer responsible for compliance. The bill is pending.

 

PA has initiated a tax amnesty program (Title 61 Revenue) that includes surplus lines tax.  The program period begins April 26, 2010 and ends June 18, 2010.

 

RHODE ISLAND—Rhode Island Bulletin 2008-8 provided that surplus line affidavits are no longer required to be filed with the state insurance department. The broker maintains the original in his or her office.  In addition, the notary signature is no longer required.

 

Insurance Bulletin 2009-4 establishes an emergency adjuster access and coordination plan to be implemented when a catastrophe is declared. The bulletin requires insurance companies, including surplus lines companies, to provide the department with emergency contact information

 

Rhode Island finalized Reg. 110 regarding hurricane deductibles. The rules do not apply to surplus lines insurance, but do suggest that the surplus lines brokers should determine if the business is eligible for the “voluntary market” or the “FAIR plan.” Rhode Island also amended insurance regulation 38 which indicates that the commercial insurance cancellation and non-renewal provisions do not apply to surplus lines insurance. NAPSLO had provided comments in support of the amendment.

 

SOUTH CAROLINA—South Carolina recently issued bulletin 17-2009 which requires a broker’s license to act as a retailer in a transaction with a surplus lines wholesaler.

 

TEXAS—Some surplus lines companies continue to protest the Texas Windstorm Assessment because it applies to surplus lines companies that are affiliated with admitted companies.  It does not apply to a stand-alone surplus lines company.  

 

SB 148 was a bill that would require surplus lines insurers to invest in low-income communities. NAPSLO was prepared to object to the bill, but was advised the bill would not advance.

 

SB 2136 was a bill to create a surplus lines export list. It took an unusual turn when the background material described the bill as allowing agents to access either the admitted or non-admitted markets. NAPSLO wrote a letter explaining how the surplus lines broker's license should be necessary to access the surplus lines markets. We do not believe the background material intended to allow broader access to surplus lines insurers by all agents, but was more likely a poor choice of words. The bill did not advance as the legislature was bogged down with a voter registration issue.

 

The Texas Controller’s office developed a survey to determine the impact of a surplus lines taxation system based upon the home state of the insured.  The Controller’s office has advocated taxing the resident brokers, instead of allocating tax based upon the location of the risk.

 

Texas has proposed child support enforcement measures (TAC 55.601) that would require insurers to check with a data base of names prior to paying a claim. The regulations mention surplus lines insurance. NAPSLO objected to the provisions to the extent they could apply to surplus lines insurers.

 

VERMONT—Vermont S 42 imposes an assessment on surplus lines insurers for expenses allowed under the insurance code. The bill passed.

 

VIRGINIA—Virginia Administrative Letter 9-1-09 provides “guidance for agents developing privacy safeguards” and applies to surplus lines brokers.   It provides specific details on what should be covered by privacy policies.

 

WASHINGTON—Washington HB 1568 amended several portions of the surplus line code. The bill adds detail regarding the bonds, the license application and license renewals. NAPSLO objected to provisions requiring bond requirements to be imposed on non-resident surplus lines brokers.   This would appear to preclude the state from being certified by the NAIC as Gramm Leach Bliley compliant because it imposes additional requirements upon non-resident surplus lines brokers.  The non-resident surplus lines exam was abolished by Washington, a change applauded by NAPSLO.

 

  The Surplus Lines Association of Washington recently issued amendments to rule 4 and 5 and no longer requires a complete copy of the policy to be filed with the stamping office.   Rule 5 requires a service of suit endorsement to be filed. Washington also is considering legislation to remove the bond requirements for nonresident surplus lines brokers and additional provisions regarding service of process on non-resident surplus lines broker.  Washington state also has proposed WAC 284-30-590 which provides that the unfair practices rule does not apply to surplus lines policies, but does indicate that it “is an unfair practice for any surplus lines broker to procure any policy of insurance  . . . that is cancelable by less than 10 days notice for nonpayment of premium and twenty days for any other reason.” There are exceptions for fire policies and certain others specified in the rule.