As the non-admitted industry and the interest of its members infederal regulatory and legislative issues continues to grow, sodoes the federal Political Action Committee (PAC) of its tradegroup, the National Association of Surplus Lines Offices Ltd.(NAPSLO).

“This year we have received about 90 contributions and over$50,000 and are about halfway to our [contribution] goal for thisyear,” says Michael D. Miller, chairman of the NAPSLO PAC andpresident of Scottsdale Insurance Co. in Arizona. “The PAC isimportant because federal financial services regulatory issues nowinclude potential rules and laws that would impact the surpluslines industry,” says Miller.

“The interest of NAPSLO members in federal issues is growing,and the PAC is growing,” he continues. “Every year we try to raiseadditional funds, and in each of the last three years we havesucceeded in gaining additional support for the PAC from ourmembers.”

Even though the non-admitted industry is state-regulated,interest in federal regulatory issues began to grow as NAPSLOmembers worked toward the enactment of what became the Nonadmitted& Reinsurance Reform Act (NRRA). The bill became law as part ofthe Dodd-Frank Act in 2010.

While certain issues dealing with the NRRA remain, “It is clearthat it has worked to improve the efficiency of the industry,” headds. “It helped to modernize an industry that formerly wasrequired to pay taxes to 50 different states.”

The NRRA “was the first real big non-admitted industry issuethat got federal attention,” Miller says, but there are now anumber of additional federal issues on which NAPSLO isfocusing.

He cited proposals to privatize the National Flood InsuranceProgram, the need to reauthorize the Terrorism Risk Insurance Act,which expires next year, and legislation that would establish theNational Association of Registered Agents and Brokers (NARAB), anational agent/broker licensing entity that supporters say wouldprovide a one-stop licensing system for agents operating outside oftheir home state. Legislation creating NARAB recently passed theHouse and is pending in the Senate.

Another legislative issue of concern to NAPSLO members is theInsurance Data Protection Act. The bill, introduced in the lastCongress by Rep. Steven Stivers, R-Ohio, addresses concerns byNAPSLO members of broad subpoena authority enjoyed under theDodd-Frank Act by the Federal Insurance Office. NAPSLO officialssay Stivers plans to reintroduce the bill.

“NAPSLO is committed to this legislation and will continue toupdate our membership on its progress,” says Keri Kish, NAPSLOdirector of government relations.

Miller says NAPSLO members also are eagerly awaiting theforthcoming report by the Federal Insurance Office dealing withproposals for modernizing the insurance industry.

“Members of the NAPSLO PAC believe having our voice heard andelecting supportive candidates is a long-term investment for ourindustry,” Miller says.

This is especially important, he adds, because even thoughrevenues declined somewhat during the recent severe recession, thenon-admitted industry is growing at a faster rate than the overallcommercial insurance market—a trend that is expected to continue.He notes that non-admitted revenues were $11.7 billion in 2000 andjumped to $34.8 billion at the end of 2012.

Miller says this is especially important because there are manynew members of Congress elected over the past two election cycles:“We have many new faces in Congress in general, but we also havemany members with new, important committee assignments we areworking with during the Session.

“The surplus lines industry is unique, and it is important towork with informed members who understand our industry,” addsMiller.

“That's why the work of our PAC is imperative,” he says. “Thecontinued education of returning members, new members andcandidates is critical. A strong, healthy PAC is our bestpath to providing this education.”