The clearinghouse that is the core of the Nonadmitted InsuranceMulti-State Agreement (NIMA) tax-sharing compact is set to beginoperation July 1, the 11 states and territories that comprise itannounced this week.

However, an industry lawyer who specializes in issues related tothe implementation of the Non-Admitted and Reinsurance Reform Act(NRRA) says he will believe it when he sees it.

“Just because the clearinghouse is set up, doesn't mean it willbe operational,” says Richard A. Brown, a senior lawyer with anaccounting background who is a sole practitioner inSan Francisco.“A lot of details have to be ironed out before there is any actualtax sharing.”

And, in effectively what is an update on implementation of theNRRA, Joel Wood, senior vice president, government affairs, at theCouncil of Insurance Agents and Brokers, says that “unless there isa far greater critical mass of states that are engaged, this entireventure amounts to spending a dollar to collect a dime.”

Wood says the Council doesn't see any momentum in largestates—New York, California, Texas, Illinois, Ohio, etc.—to join inthis effort.

“I don't see any real movement, either, to reconcile the NIMAand SLIMPACT (Surplus Lines Insurance Multistate ComplianceCompact) models,” Wood adds.

In a statement released by the Florida Office of InsuranceRegulation, NIMA member-state representatives say they met viaconference call March 30 and approved both apremium-tax-clearinghouse-services agreement and licenseagreement.

The members of NIMA say that through the agreements, NIMA, Inc.will contract with the Florida Surplus Lines Service Office (FSLSO)to serve as its central clearinghouse provider for the collectionand allocation of surplus lines premium-tax payments formulti-state surplus-lines policies.

The FSLSO will serve as the technology platform provider andwill also provide all clearinghouse-administrative duties.

The clearinghouse will begin receiving filings for policiesissued or renewed on or after July 1, 2012.

“We have taken a big step this week toward implementing thebusiness plan of NIMA, Inc.,” saysSouth Dakota's Director ofInsurance Merle Scheiber.

“This is good public policy for multi-state surplus lines, andI'm looking forward to the success of this endeavor,” he adds.

Corrected to remove inaccurate information. A previousversion of this story indicated that the FSLSO spent $1.8 millionto “entertain agents and brokers.” The budget item was listed as“Agent and insurer relations.” The FSLSO responded with thefollowing information:

In 2010, the FSLSO allocated $1.8 million to its Agent andInsurer Relations department (now called Agent and InsurerServices). This department is responsible for overseeing andfacilitating the statutory compliance of Florida's surplus linesagents and insurers. Budget money provided to this departmentis used for various efforts to further these goals includingprogramming maintenance and improvements made to our electronicfiling systems, compliance monitoring programs, training effortsand other such services.