Posted on 06 Sep 2011
Richard Bouhan has seen major changes in surplus lines in 30 years at the National Association of Professional Surplus Lines Offices, 24 as its executive director. Despite retiring one year after the passage of a far-reaching federal reform law, he doesn't plan to stop watching anytime soon.
"I do look forward to hanging around for a while to see how this starts to work out," he said.
NAPSLO named Brady Kelley, currently chief financial officer for the National Association of Insurance Commissioners, as its new executive director, effective Sept. 12. Bouhan will stay on through June 2012 in an advisory capacity.
Surplus lines insurance has become much more accepted in recent decades, with regulators raising fewer eyebrows, Bouhan said.
"The business has proved what an important factor it is in evening out tough markets for consumers. I think the regulators have come to appreciate that. I think they've also come to appreciate the fact that it is a well-managed sector of the industry," he said.
A more mainstream presence is not without its downside, however. "It has to work harder to be the innovator," he said.
As an adviser, Bouhan will continue to play a leading role for NAPSLO in legislative and regulatory matters, particularly as it tracks state-by-state implementation of the Nonadmitted and Reinsurance Reform Act. Part of the Dodd-Frank financial reform law, the NRRA set a uniform standard for surplus lines regulation, with regulatory and licensing authority under the exclusive oversight of the home state of the insured. The act also authorized states to enter into interstate agreements to address taxation and regulatory issues, but did not mandate such arrangements.
To date, 44 states have amended their state laws to comply with the NRRA, according to NAPSLO data. Of those, a combined 21 jurisdictions (including Puerto Rico) have signed on to one of two interstate agreements: the Nonadmitted Insurance Multi-State Agreement, sponsored by the NAIC and the Surplus Lines Insurance Multi-State Compliance Compact, fostered by the National Conference of Insurance Legislators.
"Depending on how those are implemented, they can do some things that could actually undercut some of the reforms that were gained by the NRRA for the industry," he said.
Bouhan praised his successor as someone who "understands associations, associations' budgets and associations' duties." Kelley has served as CFO, director of financial services and other capacities since joining the NAIC in 1998.
Prior to joining NAPSLO in 1981, Bouhan was associate counsel for the National Association of Independent Insurers and as assistant director of the legislative service division of the Blue Shield Association. Bouhan was also a commissioned officer of the United States Public Health Service.