WHOLESALERS and insurers attending last month's annual meeting of the National Association of Professional Surplus Lines Offices were given an optimistic assessment of the outlook for their top legislative priority, the Nonadmitted and Reinsurance Reform Act (H.R. 5637). The association's lobbyists held out hope it would get through the House of Representatives before Congress adjourned–which the bill did about two weeks later–while adding that Senate consideration probably would have to wait until next year. Still, the lobbyists said the odds for eventual enactment look good.

“Your issues are uniquely bipartisan,” said Andrew L. Ehrlich, senior vice president of B&D Consulting, which represents NAPSLO on Capitol Hill.

H.R. 5637 would streamline regulation of the excess and surplus-lines marketplace. Among other things, it would address a major headache afflicting surplus-lines brokers: the requirement to remit premium taxes in multiple states for commercial insureds that have widespread operations. The act would bar any state, other than an insurance buyer's home state, from requiring the payment of premium taxes on a surplus-lines transaction. Rather, the insured's home state could require the buyer (or the buyer's broker) to file tax-allocation reports annually, showing how much of the insured's premium is tied to exposures in other states. Then the home state could distribute the appropriate amount of premium taxes to those states. H.R. 5637 encourages the creation of interstate compacts or other mechanisms to facilitate such tax sharing.