The U.S. House of Representatives last week unanimously passed legislation reforming regulation of the surplus lines and reinsurance markets. H.R. 1065--the Nonadmitted and Reinsurance Reform Act of 2007--gives the insurer's home-state regulator primary oversight of multistate surplus lines risks.
Under the bill, the home-state regulator would also be responsible for allocating any taxes collected on the coverage to the other involved states. The legislation makes it easier for sophisticated purchasers to access the surplus lines market.
As for the reinsurance portion, the legislation specifically establishes the ceding insurer's state of domicile as the sole regulatory authority for determining credit for reinsurance for the insurer's ceded risk.
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