The Moore-Garrett bill will streamline a critical component of the surplus lines insurance market, particularly in regard to conflicting state laws governing the placement, tax payment and allocation of premium for multistate surplus lines risks. It will assign responsibility for the regulation of a surplus lines transaction to the consumer’s home state, with tax payment by the broker to that state to be forwarded to any other states for multi-state risks. Regarding reinsurance, the legislation will prohibit extraterritorial application of state laws to certain reinsurance transactions, similarly assigning primary responsibility for the reinsurance transaction to the insured’s home state.
Surplus lines reinsurance legislation has passed the House unanimously in each of the last two Congresses but was not introduced in the Senate. PCI encourages both the House and Senate to pass the bill and President Obama to sign it into law.
“This legislation is a vital step toward reforming and streamlining our current insurance regulatory system,” said David A. Sampson, PCI’s president and CEO. “We applaud Congressmen Moore and Garrett for reintroducing this important legislation, and we encourage their House and Senate colleagues to move on it quickly. This bill, if enacted, will create greater legal and regulatory certainty for surplus lines consumers, which will benefit insurers, businesses and the economy.”
The NARAB II bill, previously introduced in the 110th Congress, would create a streamlined system for nonresident or reciprocal licensing of insurance agents on a national basis. PCI’s Board of Governors strongly supports this legislation.
“This is a good bill, and we commend Congressmen Scott and Neugebauer for reintroducing it,” Sampson said. “We urge Congress to move expeditiously and pass this legislation.”