Positive change in surplus lines market regulation recently came one step closer to reality when the Senate Banking Committee included surplus lines reform language in the financial services reform legislation. Identical language for improving surplus lines regulation was included in the House's version of financial services reform legislation, passed earlier this year.

It is likely the Senate will pass financial services reform legislation this year, and if the Senate and House reconcile their differences–and I believe they will–the long-awaited reforms in surplus lines regulation that NAPSLO and others have fought so long to attain will take place.

Enactment will be a big win for both the surplus lines industry and for the future of state insurance regulation. By enacting this legislation and the companion provisions relating to reinsurance, Congress creates standards for more efficient state regulation for two important segments of our industry–not by expanding federal authority or creating a new agency, but by setting the parameters within which states must perform their regulatory process.