NU Online News Service, July 26, 3:47 p.m. EDT

As regulators prepare to implement the financial services reform legislation, a House member sought to clarify the legislative intent of surplus lines provisions in a recent floor statement.

Rep. Dennis Moore, D-Kan., made his statement last Thursday as a means of forestalling delays by state regulators or requests for judicial review of the intent of the provision, according to officials of the National Association of Professional Surplus Lines Offices, Ltd.

Rep. Moore was the chief House sponsor of The Nonadmitted Reinsurance and Reform Act, which was incorporated intact into the Dodd-Frank Financial Reform Bill, H.R. 4173.

Specifically, Rep. Moore said in his statement that under the NRRA language, surplus lines premium taxes are to be paid only to the insured's "home state"; that the placement of all nonadmitted insurance, including surplus lines insurance, shall be subject solely to the statutory and regulatory requirements imposed by the insured's "home state"; and that Congress intends that the states adopt uniform requirements, forms and procedures regarding payment and allocation of surplus lines premium taxes.

Richard Bouhan, NAPSLO executive director, said Rep. Moore's statement in the Congressional Record will help avoid any confusion as to how the states are to respond to the reforms.

"It is important that the surplus lines reform measures be implemented as Congress intends, and Rep. Moore's comments clearly state that under the new law the home state of the insured is to be the only state to receive payment and collect premium taxes and regulate the placement of surplus lines policies," he said.

Mr. Bouhan said, "In addition, the real promise of the bill is dependent upon the states adopting uniform requirements, forms and procedures, and NAPSLO believes that an interstate compact, as stated in the legislation, would fulfill the congressional requirements, and we look forward to working with the states on this."

Nicole Allen, vice president, industry affairs, for the Council of Insurance Agents and Brokers, said CIAB has always interpreted the surplus lines provisions of the NRRA as Rep. Moore outlined them.

Ms. Allen added, "We're grateful to Rep. Moore for weighing in on the issue and providing clarification of the intent."

Special Reports /

House Rep. Clarifies Surplus Lines Reform Intent To Avoid Delays

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