NU Online News Service, March 24, 2:05 p.m. EDT
Officials of the National Conference of Insurance Legislators are reiterating their support for comprehensive legislation they drafted as the proper vehicle for implementing the surplus-lines and reinsurance law enacted by Congress last year.
In a statement, Rep. George Keiser, R-N.D., says that as “debates rage on across the states about what compact should be enacted to implement the new law,” he is “making clear” that NCOIL adopted and continues to support the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT) as the most appropriate policy response to the surplus-lines and reinsurance provisions of the Dodd-Frank Act.
“NCOIL has not endorsed any effort to modify or revise SLIMPACT,” Keiser says. “Nor have we supported any alternative mechanism to allocate surplus-lines taxes, or to otherwise delay SLIMPACT effectiveness.
He adds, “Any suggestion to the contrary is not correct. State legislators across the country debating surplus lines in their respective committees should know that NCOIL stands by SLIMPACT.”
He made his comments as Kentucky, New Mexico and Ohio became the first states to enact comprehensive legislation implementing the surplus lines and reinsurance reform and modernization law.
Under the federal modernization law, the Nonadmitted and Reinsurance Reform Act, surplus-lines taxes are paid to the insured’s home state. Distribution of those taxes is then up to the individual states to share proportionally.
To accomplish this, NCOIL’s response was SLIMPACT, which is an agreement between states that would promote uniformity of regulation and sharing of taxes.
It is being supported by other state government groups and the insurance industry.
At the same time, the National Association of Insurance Commissioners (NAIC) has been pushing its competing compact, the Nonadmitted Insurance Multistate Agreement (NIMA).
Louisiana Insurance Commissioner James J. Donelon, who was chair of the NAIC’s Surplus Lines Implementation Task Force at the time, acknowledges that NIMA is not a broad regulatory compact and only addresses the collection of taxes.
Keiser says: “SLIMPACT has been introduced in 25 percent of the country, and NCOIL offices continue to field calls and e-mails on a daily basis from legislators and insurance department representatives interested in the compact. We hope that SLIMPACT gets broadly enacted in a timely manner and believe that the states will benefit from its taxation and regulatory efficiencies.”