The state of the economy anddevelopments in states' implementation of the federal excess andsurplus lines reform law will be two topics on the minds ofNational Association of Professional Surplus Lines Offices (NAPSLO)members as they gather for the organization's 2012 Mid-YearLeadership Forum.

Speaking to NU about the topics members will bediscussing at the conference, slated for Feb. 29 to March 3 inScottsdale, Ariz., NAPSLO Executive Director Brady Kelley says,“Leading any business through these economic conditions is top ofmind, in my opinion. I'd expect that may be one of the topicsdiscussed here.”

NAPSLO members, Kelley notes, have unique insight into theeconomy because they insure businesses and individuals directlyaffected by it: “Our members work very, very closely with theirclients. 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 currenteconomic conditions.

FOCUS ON NRRA

Another key issue on NAPSLO members' minds, Kelley says, is theimplementation of the federal Nonadmitted and Reinsurance ReformAct (NRRA), part of the Dodd-Frank financial-services-reformlegislation.

“We continue to be very focused on the states' implementation,and ensuring that it's as consistent with the federal law aspossible,” he adds.

The NRRA took effect in July 2011, but states are stillstruggling to coalesce around a single mechanism for sharingpremium taxes.

Some states favor the National Association of InsuranceCommissioners' Nonadmitted Insurance Multistate Agreement (NIMA)proposal. Other states favor the Surplus Lines Insurance MultistateCompliance Compact (SLIMPACT), which is supported by the NationalConference of Insurance Legislators (NCOIL) and many industrygroups.

Still other states have passed regulations and legislationimplementing the law that allows them to keep all premiumtaxes.

In an update sent to members on Jan. 25,NAPSLO notes that 44 states have taken action to implement theNRRA, but only nine states, representing 5.23 percent of nationwidepremium, are working to implement the industry-supported SLIMPACT.That compact needs 10 member states in order to establish a taxclearinghouse.

Eleven states and Puerto Ricohave signed the NIMA agreement, and 13 states have obtainedlegislative authority to enter into some form of tax sharing. Theremaining 11 states that have taken action to implement the lawhave taken a home-state approach to regulation and taxation.

NAPSLO says its priorities for 2012 include urging the sevenstates that took no action in 2011 to implement the federal NRRAlegislation.

The association will also continue to oppose the current NIMAallocation methodology and, where appropriate, will reach out tostates for possible revisions to NRRA-implementation legislationthat concerns NAPSLO members.

Kelley says the group's goal is to work in every state wherechanges need to be made, to ensure consistent implementation of thefederal statute.

Acknowledging the reality that states continue to contemplatemultiple models to implement the law, Kelley says, “That's notuniform, and so obviously we're trying to work with those states toultimately get to a more uniform, streamlined nationwidesystem.”

NAPSLO will provide an NRRA update to members at the conferenceon March 2 at 9 a.m.

Shortly after the update, the main session, “Leading FlawlessExecution from the Top: Afterburner,” will begin. Afterburner is amanagement-training team composed of a select group of top militaryfighter pilots.

According to a preview of the session, Afterburner's mission is“to use combat-proven fighter-pilot skills to achieve victory intoday's business world.”

Ultimately, as Kelley says, the Mid-Year Leadership Forum is anetworking event—and members will have plenty of opportunities toconnect as NAPSLO expects even more participants than usual thisyear. NAPSLO generally has around 500 members attend theconference, he says, and this time around the association isexpecting 525.