Insurance industry groups are eagerly anticipating legislation streamlining the regulation of multi-state surplus lines risks expected to be introduced on Thursday.

Rep. Dennis Moore, D-Kan., said at a Council of Insurance Agents and Brokers event last week that he would be re-introducing the legislation in the near future with Rep. Ginny Brown-Waite, R-Fla. The two congressmen introduced the bill last year, and it was passed overwhelmingly by the House before failing to gain traction in the Senate.

Reps. Moore and Brown-Waite are gathering a significant list of co-sponsors for their bill, which would greatly improve its chances of receiving House approval again. At the same event, Sen. Chris Dodd, D-Conn., the chairman of the Senate Banking Committee, said the panel would be taking a “good look” at the measure this year.

Joel Wood, executive vice president of government affairs for the CIAB, said his group is “looking forward to the introduction” of the bill, which had strong industry support last year.

“This is virtually identical legislation to the bill that soared through the Financial Services Committee last year, and was approved on the House floor on a 417-0 vote,” he said. “The vote was late in the session, though, and we're hopeful that action this year, with this early reintroduction, will help us get the bill to the finish line.”

For those in the insurance industry, support for the legislation was high last year, and Mr. Wood said he expects the same for this version.

“What was remarkable about this bill last year, and again this year, is that it comes as close as any meaningful legislation we've ever seen to attracting universal support among the stakeholders, policyholders, insurers and, yes, even the state regulators who have been extremely constructive in their commentary about the need for reform in this area,” Mr. Wood said.

Under the legislation, the home state of the insured would act as primary regulator for a multistate surplus lines risk, and would also be responsible for allocating any taxes collected on the coverage to the other involved states. The legislation also makes it easier for sophisticated purchasers to access the surplus lines markets, and streamlines the regulation of reinsurance as well.

“A large and growing portion of the commercial insurance market is sold through surplus lines carriers, yet multistate placements are extremely difficult due to the multiplicity of barriers spawned by differing and redundant laws governing access to these products,” Mr. Wood said. “Commercial properties have sophisticated insurance needs, and surplus lines insurance is all the more important when policyholders face difficult market conditions, such as in the coastal areas today.”

Special Reports /

Industry Hoping For Surplus Lines Bill

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