NU Online News Service, Aug. 23, 3:03 p.m.EDT

In a further sign of support for a compromise proposal toimplement the federal surplus-lines reform and modernization law,several appointees to the SLIMPACT governing body have selectedKentucky Commissioner Sharon Clark as interim chair of the SLIMPACTcommission.

The decision was made by the regulators from Alabama, Indiana,Kansas, New Mexico, Rhode Island, Tennessee and Vermont, accordingto NCOIL officials. 

Kentucky regulators are responsible for developing a compromiseproposal for the implementation of the Nonadmitted and ReinsuranceReform Act (NRRA).

The NRRA mandates that, as of July 21, the insured's home stateis the only state with jurisdiction over multistate surplus-linestransactions and the only state that can require a tax be paid bythe broker.

Two competing proposals have been developed to implement the lawand create a system to share premium taxes among states.

The Surplus Lines Multistate Compliance Compact Commission(SLIMPACT) is one proposal supported by officials of the NationalConference of Insurance Legislators (NCOIL). A total of nine statessupport SLIMPACT, although its bylaws mandate it cannot go intooperation until 10 states join.

The other competing proposal is the Nonadmitted InsuranceMultistate Agreement (NIMA), which is supported by the NationalAssociation of Insurance Commissioners (NAIC) and is beingcoordinated through the Florida Office of Insurance Regulation.

The Kentucky compromise proposal was first disclosed earlierthis month as state regulators and legislators agreed to begindiscussing possible ways to break the SLIMPACT-NIMA impasse. Itallows brokers to continue to operate under a basically unchangedallocation system.

An official the National Association of Professional SurplusLines Offices (NAPSLO), says, "NAPSLO, and the industry, arepleased to see regulators vote to approve Kentucky's allocationproposal."

David Leonard, NAPSLO legislation co-chairman, adds, "TheKentucky proposal presents a workable methodology that would be avast improvement over other tax methodologies under discussion, andwe hope that other state groups will also adopt the proposal."