The state of the economy and developments in states’ implementation of the federal excess and surplus lines reform law will be two topics on the minds of National Association of Professional Surplus Lines Offices (NAPSLO) members as they gather for the organization’s 2012 Mid-Year Leadership Forum.
Speaking to NU about the topics members will be discussing at the conference, slated for Feb. 29 to March 3 in Scottsdale, Ariz., NAPSLO Executive Director Brady Kelley says, “Leading any business through these economic conditions is top of mind, in my opinion. I’d expect that may be one of the topics discussed here.”
NAPSLO members, Kelley notes, have unique insight into the economy because they insure businesses and individuals directly affected by it: “Our members work very, very closely with their clients. They know their clients and risks better than anybody.” Through their underwriting processes and due diligence, he adds, the group’s members gather a lot of intelligence on current economic conditions.
FOCUS ON NRRA
Another key issue on NAPSLO members’ minds, Kelley says, is the implementation of the federal Nonadmitted and Reinsurance Reform Act (NRRA), part of the Dodd-Frank financial-services-reform legislation.
“We continue to be very focused on the states’ implementation, and ensuring that it’s as consistent with the federal law as possible,” he adds.
The NRRA took effect in July 2011, but states are still struggling to coalesce around a single mechanism for sharing premium taxes.
Some states favor the National Association of Insurance Commissioners’ Nonadmitted Insurance Multistate Agreement (NIMA) proposal. Other states favor the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT), which is supported by the National Conference of Insurance Legislators (NCOIL) and many industry groups.
Still other states have passed regulations and legislation implementing the law that allows them to keep all premium taxes.
In an update sent to members on Jan. 25, NAPSLO notes that 44 states have taken action to implement the NRRA, but only nine states, representing 5.23 percent of nationwide premium, are working to implement the industry-supported SLIMPACT. That compact needs 10 member states in order to establish a tax clearinghouse.
Eleven states and Puerto Rico have signed the NIMA agreement, and 13 states have obtained legislative authority to enter into some form of tax sharing. The remaining 11 states that have taken action to implement the law have taken a home-state approach to regulation and taxation.
NAPSLO says its priorities for 2012 include urging the seven states that took no action in 2011 to implement the federal NRRA legislation.
The association will also continue to oppose the current NIMA allocation methodology and, where appropriate, will reach out to states for possible revisions to NRRA-implementation legislation that concerns NAPSLO members.
Kelley says the group’s goal is to work in every state where changes need to be made, to ensure consistent implementation of the federal statute.
Acknowledging the reality that states continue to contemplate multiple models to implement the law, Kelley says, “That’s not uniform, and so obviously we’re trying to work with those states to ultimately get to a more uniform, streamlined nationwide system.”
NAPSLO will provide an NRRA update to members at the conference on March 2 at 9 a.m.
Shortly after the update, the main session, “Leading Flawless Execution from the Top: Afterburner,” will begin. Afterburner is a management-training team composed of a select group of top military fighter pilots.
According to a preview of the session, Afterburner’s mission is “to use combat-proven fighter-pilot skills to achieve victory in today’s business world.”
Ultimately, as Kelley says, the Mid-Year Leadership Forum is a networking event—and members will have plenty of opportunities to connect as NAPSLO expects even more participants than usual this year. NAPSLO generally has around 500 members attend the conference, he says, and this time around the association is expecting 525.