In addition to efforts to secure passage in Congress oflegislation reforming and modernizing regulation of the surplusinsurance market, NAPSLO representatives said several state issuesare also on the group's legislative agenda for 2009.

One issue will be resolving problems created for the E&Sinsurance industry segment by the Essex v. Zota Florida SupremeCourt decision, which seems to make the surplus lines industrysubject to the section of the Florida Insurance Code that regulatesinsurance contracts and forms.

NAPSLO is seeking a legislative solution to the decision'seffect, said Steve Stephan, director of government relations.

Mr. Stephan said NAPSLO is working with state and other nationalassociations, the Florida Insurance Department and with Floridalegislators "to clarify that the surplus lines market has thefreedom of form it requires to fulfill its role as a supplementalmarket for Florida insurance buyers unable to find coverage throughstandard, admitted markets."

He said NAPSLO will also continue to monitor the Silvers v.State Board of Equalization case in California. He noted that ifthe plaintiff prevails in this case, NAPSLO believes surplus linespremiums will be subject to the state's 2.5 percent premium tax, inaddition to the 3 percent surplus lines tax that the law nowrequires be assessed to surplus lines policyholders.

"Such double-taxation would be disastrous for buyers of surpluslines insurance [and] the overall California surplus lines market,"he said. "NAPSLO will take whatever action it can to help secure apositive decision for the surplus lines industry in thislitigation."

On the federal level, Mark Rothert, president of Ron RothertInsurance Services in Portland, Ore., who is also the senior vicepresident of the Western Region for the American Association ofManaging General Agents, said AAMGA opposes any attempt to repealthe McCarran-Ferguson Act, as well as any calls in Congress to addwind coverage to the National Flood Insurance Program.

"We very much support the continuation of the program butbelieve that wind coverage is already available in the privatesector or through existing state-supported pools," Mr. Rothertsaid.