WASHINGTON–The push to convince members of Congress to pass legislation streamlining the regulatory process for multistate surplus lines risk and reinsurance has begun in Washington.
A surplus lines trade group has written members of the House Financial Services Committee and the Senate Banking Committee asking them to enact the legislation this year.
Last year a bill to make those changes for reinsurance surplus risks passed the House 417 to 0, but failed to gain traction in the Senate.
Richard Bouhan, executive director of the National Association of Professional Surplus Lines Offices, wrote Congress members that "NAPSLO stands ready to do whatever is necessary to pass that legislation, again, in the House, and, hopefully, in the Senate as well."
Under the legislation as it was introduced last year by Reps. Ginny Brown-Waite, R-Fla., and Dennis Moore, R-Kan., multistate surplus lines risks would be regulated under the laws of the home state of the insured. Additionally, all taxes involved would be paid to that regulator, who would be in charge of allocating to the other involved states.
NAPSLO lobbyists have been meeting with the leadership of the House committee, including Chairman Barney Frank, D-Mass.; ranking member Spencer Bachus, R-Ala.; and Rep. Paul Kanjorksi, D-Penn., who chairs the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
Although the bill has not yet been introduced in the 110th Congress, Mr. Bouhan said he hopes to see it unveiled in the near future.
"We hope to see a version of the bill reintroduced in February," he said. "The bill is a very good piece of insurance legislation and would increase consumer access to the surplus lines market and assist in expanding insurance availability nationwide."
The bill would also allow for "sophisticated purchasers" to access the surplus lines market directly, and Mr. Bouhan said that the benefits of the legislation would help all involved in surplus lines.
"We believe that enactment of this legislation will significantly increase the level of efficiency for those using the surplus lines market, particularly when coverage is located in multiple jurisdictions," he said. "It will help everyone involved in the surplus lines market from the companies down to the consumers."
Charles E. Symington, Jr., a lobbyist for Independent Insurance Agents & Brokers of America, said his group has made passage of the measure one of its top priorities and has been in contact with key committee leadership and others to move the bill.
Last year's House 417-0 vote for the legislation "is clear evidence of the overwhelming support for targeted federal reforms to the state-based system. This stands in stark contrast to the so-called 'optional' federal charter legislation that was introduced last year by only two members in the Senate and one member in the House," said Mr. Symington."
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