When Lawrence “Mac” Wesson Jr., 2005-2006 president of theNational Association of Professional Surplus Lines Offices,welcomed members to the organization's annual convention, held inSeptember in San Francisco, he outlined several challenges NAPSLOfaced this year. The least troubling one, apparently, was where tohold such meetings in the future. As participation steadilyincreases, he said, it becomes more and more difficult to findvenues large enough to accommodate all the people and the programsoffered. “When I joined the board, our attendance was around2,000,” said Wesson. “This year we broke 3,100, which is amazing inany market condition.” Attendees filled all four officialconvention hotels and spilled over into several others. Wessonstated, somewhat unconvincingly, that he hopes not to face the same“problem” in Chicago in 2006.

Of greater concern, according to NAPLSO immediate past presidentRichard L. Polizzi, ASLI, are such issues as education,communication, growth and stability, and insurance-relatedlegislation. Polizzi noted that more than 1,000 people havecompleted the educational program established by NAPSLO 15 yearsago and known as E&S School, and many have gone on to graduatefrom the 10-year-old Advanced School. “This year we enlarged theschool's capacity, and we still have waiting lists. The AdvancedSchool set for November in Dallas is already sold out.”

Polizzi also reported that the association had expanded andupgraded its E-News electronic mailing to members and redesignedits newsletter and Web site (www.napslo.org) to make them morecurrent and user-friendly. “We added a weblog, or “blog,” to theWeb site to enable us to quickly post information for members toaccess,” he said.
Polizzi went on to assure members that the association is on “afinancially sound path” as membership continues to increase. “Lastyear the number of main offices topped 800 for the first time, andwe added several new firms this year,” he said. “Overall, NAPSLOnow has more than 1,500 main- and branch-office members.”

At the legislative breakfast, NAPSLO Executive Director RichardBouhan delivered mixed news from the legislative front. “Last yearwas dominated by state efforts to maintain E&S contingencyagreements, despite [New York Attorney General] Eliot Spitzer'sefforts to eliminate them,” he observed. The good news, for now,said Bouhan is that “nowhere has anyone eliminated contingency feesas a matter of law. Twenty states enacted disclosure regulations,and two states acted to exclude wholesalers from disclosurerequirements. I don't think Spitzer is going to pass from the sceneany time soon. He's shown what a hard-charging public servant cando, but while his intentions may be good, he's misguided. Someonejust as well-meaning and forceful needs to speak out just asstrongly to counter the misrepresentations he has created orreinforced.”

In that vein, Mr. Bouhan reported that NAPSLO had hired B&DSagamore to monitor industry-related legislation and lobby on theassociation's behalf in Washington, D.C. He introduced Maria L.Berthoud, B&D Sagamore vice president, who will representNAPSLO. Mr. Bouhan outlined Ms. Berthoud's extensive experienceworking on legislative issues affecting the insurance industry,including the Terrorism Risk Insurance Act and theGramm-Leach-Bliley Act. Prior to joining B&D Sagamore, sheserved as senior vice president for the Independent InsuranceAgents and Brokers of America, where she was responsible for allcomponents of legislative lobbying efforts, including pressstrategy and government relations.

Mr. Bouhan said Ms. Berthoud's first priority will be working onCongressional action on the State Modernization and RegulatoryTransparency (SMART) Act, which could overhaul insurance regulationand include federal standards for states' use. NAPLSO's officialposition favors national standards implemented by individualstates, rather than federal regulation, and Ms. Berthoud will carrythis message to Congress. She indicated she will focus on four mainelements the association would like to see in future legislation:freedom of rate and form regulation, automatic export, uniformlicensing and uniform premium tax payments.

“The Gramm-Leach-Bliley Act created a structure that includesfederal government regulation in a big way and also facilitateddiscussion of federal terrorism reinsurance,” Berthoud said. “Thetreasury issued an unfavorable report on TRIA, recommending anextension but with much tougher terms. The overwhelming consensusis that state regulations need to be reformed, but I think we canall realize how dangerous federal regulation would be for NAPSLOmembers.

“What we assumed was in the state purview is now on Congress'agenda. Their interest in us is not just a passing fancy; they'rein it for the long haul.”

She predicted that two insurance-regulation bills will beintroduced to Congress in 2006, and something probably will beenacted in 2007, adding that the insurance industry's handling ofHurricane Katrina may influence future of state regulation.

NAPSLO's 2006 Mid-Year Workshop is set for February 16-19 inPhoenix, Ariz.