As the Nonadmitted and Reinsurance Reform Act (NRRA) takes center stage and continues toward its July 2011 deadline, looming questions continue to plague the Act's clarity.
The NRRA is intended to simplify the surplus lines agent's payment of premium taxes on multi-state risks by requiring that all premium tax due on surplus lines transactions that cross multiple state boundaries be paid only to the insured's “home state.” This provides agents and brokers with the ability to file multi-state policies with a singular entity as opposed to filing with each state of exposure separately.
It is now left up to the states to determine how, and on what basis, the premium taxes paid on those transactions will be allocated and distributed to each state.
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