State regulators are "very close" to endorsing federal legislation that will establish a surplus lines carrier's home state as its primary regulator, and their backing is an important step for the bill to win passage in Congress this year, an industry lobbyist told risk managers last week.
However, state support is limited to Title 1 of the bill–H.R. 1065, the Nonadmitted and Reinsurance Reform Act of 2007–according to Joel Wood, senior vice president and director of federal affairs for the Council of Insurance Agents and Brokers. He made his comments at the annual Capitol Hill conference of the Risk and Insurance Management Society.
"Reinsurance is another issue," noted Mr. Wood. He said the reason state regulators support the surplus lines portion of H.R. 1065 is "they believe that only through enactment of the legislation will they have the momentum to create an interstate compact that will govern this." The bill also would set federal standards for regulation of reinsurance.
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