Time, money and a unified industry voice in Washington could get a surplus lines reform bill introduced in the Senate this year, the president of the National Association of Professional Surplus Lines Offices contends.
NAPSLO President William Newton told National Underwriter he has reason to be optimistic that a bill to streamline surplus lines regulation and taxation on multistate risks will get an airing in the Senate this year, although it failed to be introduced in that house of Congress in 2006.
Speaking to NU when he took office last September, Mr. Newton set goals of moving the reform bill through both Congressional chambers, and quadrupling the size of NAPSLO's Political Action Committee funding–then sitting at just over $45,000–as two key goals of his presidential term.
The reform bill–which essentially would establish an insured's home state as primary regulator for multistate surplus lines risks, and charge that state with allocating and collecting premium taxes–sailed through the House last year as HR 5637, and was reintroduced as HR 1065 this year.
The PAC–started last year to support political candidates whose platforms are consistent with NAPSLO's legislative goals–now stands at roughly $150,000, Mr. Newton told NU in an interview here during the group's midyear education conference.
Funding the PAC remains "a priority issue," he said. "In the past, when it came to surplus lines legislation and regulatory issues, they were all state-dominated. Now the center of debate has turned to Washington, which makes the funding of the PAC critically important for us."
He explained that it's taken time to sort through some very complicated rules about how to legally raise money for a PAC, reporting that the group's legislative committee put a plan in place to start calling companies just last month. "You have to get the companies to allow their employees to be solicited," he noted.
To move the reform bill forward, Mr. Newton said NAPSLO needs more than funding since the group must find a senator to champion the cause. "To many of them, it's not a major issue. It's not going to get them the front page of their local newspaper," he said.
On the other hand, "it's noncontroversial," added Steven Stephan, NAPSLO's director of government affairs, during a separate interview. Both said time is on their side. Last year, HB 5637 was introduced in July and the session ended in December, Mr. Newton noted.
"I think what makes me most optimistic is that last year, all of the [insurance] associations that view this as important worked separately. This year, they're working together," he said, referring to the Council of Insurance Agents and Brokers, the Independent Insurance Agents and Brokers of America, and the American Association of Managing General Agents, among others. "I think that a concerted effort is going to bear more fruit than separate efforts."
Multistate compliance and tax issues are more than just a headache for surplus lines market participants–in some cases, they're actually impossible to comply with, according to Mr. Stephan and NAPSLO's executive director, Richard Bouhan.
Mr. Stephan, who works on state issues for NAPSLO, has been voicing objections on behalf of members when states impose such rules. To solve this type of problem for good, however, there are two solutions: a federal law, or an interstate compact that would have a commission that would set uniform tax rules, he said.
NAPLSO's next meeting–its annual fall gathering–will take place in New Orleans. During the opening session of the midyear conference this month, John Wood, NAPSLO's treasurer, who is also president of Specialty Risk Associates in Shreveport, La., urged NAPSLO members to join him at the October convention in his home state "on behalf of NAPSLO and Louisiana."
The message was repeated by every NAPSLO officer who spoke with NU. And supporting the convention theme–"Big Easy Rising"–NAPSLO members are being invited to join in a hands-on effort to rebuild the city with Habitat for Humanity on Oct. 6, according to a convention brochure distributed at the midyear meeting.
Mr. Newton said the details of the Habitat for Humanity work are in the preliminary planning stages.
Addressing concerns over whether New Orleans can cope with the convention and crime issues, Mr. Newton noted that the city has handled groups with 25,000 members, and that crime tends to occur in areas outside the French Quarter that members are unlikely to visit.
"If there's one message I want to give the membership, it's that the annual meeting is where we get most of our funding for the year. So the association really needs membership support of the annual meeting," he said. "But perhaps really a bigger reason is that the city of New Orleans needs our members to support it."
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