Surplus Lines Bill Reintroduced In House

The Independent Insurance Agents and Brokers of America and the National Association of Mutual Insurance Companies are also backing the bill.

Supporters said they believe the legislation represents the kind of targeted insurance regulatory reform that is preferable to broad federal regulation as represented by an optional federal charter.

Meanwhile, officials at the National Association of Professional Surplus Lines Offices, Ltd. said they believe companion legislation will be introduced soon in the Senate.

NAPSLO President John Wood noted that Sen. Evan Bayh, D-Ind., and Sen. Mel Martinez, R-Fla., both members of the Senate Banking Committee, have also announced plans to introduce a version of the surplus lines bill in the Senate.

It would create a uniform system of surplus lines premium tax allocation and remittance, one-state compliance on multistate surplus lines risks, and direct access to the surplus lines market for sophisticated commercial purchasers.

"These are concepts long endorsed by NAPSLO and promoted with members of Congress during meetings over the past few years," Mr. Wood said.

Richard Bouhan, NAPSLO executive director, added, "We believe that this legislation will bring efficiency and reduce the cost of regulatory compliance in surplus lines placements with multistate exposures."

He added that consumers will also benefit because the costs related to the inefficiencies and redundancies, which they bear, will be eliminated."

"This important legislation will provide much needed reform in the nonadmitted and reinsurance markets," said Deborah Luthi, a member of the RIMS board of directors and director of enterprise risk management services at Matheson.

"RIMS believes the bill would reduce the regulatory costs for insurers that are passed on to consumers and would make insurance more available and affordable," Ms. Luthi said. "RIMS urges the House of Representatives to once again pass this legislation and for the U.S. Senate to take it up as soon as possible," she added.

IIABA officials said they supported prompt passage of the legislation because it would be "another example of a positive targeted approach to insurance regulatory reform" and will preserve the strengths of the state-based insurance regulatory system.

Marliss McManus, senior federal affairs director for the National Association of Mutual Insurance Companies, said, "This approach would streamline the current regulatory system by establishing uniform and consistent standards, while leaving the day-to-day regulatory control at the state level."