End To SLIMPACT, NIMA Debate May
Be In Sight As Compromise Eyed
BY ARTHUR D. POSTAL
THE INSURANCE industry is coalescing around a surplus-lines allocation for- mula proposed by Kentucky regulators
as a means of breaking the impasse over
implementation of the new federal surplus-lines reform and modernization law.
The Nonadmitted and Reinsurance Reform Act (NRRA) mandates that, as of July
This index is provided as an additional service
to our readers. The Publisher does not assume any
liability for errors or omissions.
Advertiser Index
American Modern................................ 11
agents.amig.com
American Safety ..................................... 4
www.amsafety.com
Applied Underwriters ........................ BC
www.auw.com
www.auw.com/ca
Bituminous (2, 3, 4) .............................19
www.bituminousinsurance.com
CNA ................................................... IBC
www.cna.com
Cover X Specialty.............................. IFC
www.coverx.com
FC&S Online ....................................... 28
www.FCandS.com
Highline Data.......................................... 25
www.HighlineData.com
Markel ................................................... 23
www.markelinsurance.com
WCEC (1, 5) ......................................... 19
www.PropertyCasualty360.com/WCEC
Zurich ...................................................... 9
www.zurichna.com/stories6
Zurich ............................................... 16-17
www.propertycasualty360.com/
vacantproperty
Page
Advertiser Number
21, the insured’s home state is the only
state with jurisdiction over multistate surplus-lines transactions and the only state
that can require a tax be paid by the broker.
Two competing proposals have been developed to implement the law and create a
system to share premium taxes among states.
The Surplus Lines Multistate Compliance Compact Commission (SLIMPACT)
is one of two competing proposals being
adopted by the states to implement NRRA.
Officials of the National Conference of Insurance Legislators are coordinating SLIMPACT’s adoption.
The other competing proposal is the Non-admitted Insurance Multistate Agreement
(NIMA), which is supported by the National
Association of Insurance Commissioners
(NAIC) and is being coordinated through the
Florida Office of Insurance Regulation.
Most larger states, in terms of surplus-lines premiums, have opted not to join
either compact, choosing instead to enact
laws or publish regulations that don’t require them to share revenues based on the
risk in each state.
State insurance regulators and legislators
will discuss later this month possible ways
of breaking the impasse. It will be taken up
at a government-liaison meeting Aug. 29 as
part of the NAIC meeting in Philadelphia.
Five industry trade groups sent a letter
to officials explaining that the Kentucky-regulator proposal would implement a tax-allocation formula that would distribute
surplus-lines taxes based on exposures.
However, brokers would not allocate most
casualty risk, an approach similar to what
has been in use.
Hank Halderman, co-chairman of the
legislation committee for the National Association of Professional Surplus Lines Offices, says the Kentucky proposal allows
brokers to continue to operate under a
basically unchanged allocation system.
An industry lawyer involved in the is-
sue cautions that while NCOIL and the
NAIC are talking, no prompt solution to
the issue is at hand.
TEEN DRIVERS
The insurance industry is trying to build
support for a Senate bill provision establishing minimum requirements for state
graduated driver licensing (GDL).
In an effort to energize the public behind the bill, for example, Allstate conducted a survey and presented the results to
members of the Senate showing that nearly
six in 10 Americans favor the provision.
According to Allstate officials, the survey results show that support for a national
law corresponds with low opinions about
teen-driving skills, which received the
lowest ranking among all ages surveyed.
Eighty-one percent of respondents rate
teenagers as “average” or “poor” drivers.
Melissa Shelk, vice president of federal af-
fairs for the American Insurance Association,
says, “Car accidents are the number-one killer
of teenagers in the United States, and the
provision, if enacted, would slow this danger-
ous trend and spare thousands of families the
heartbreaking loss of a teenage child.”
The Safe Teen and Novice Driver Uni-
form Protection (STANDUP) Act is part
of the Motor Vehicle and Highway Safety
Improvement Act of 2011, which has re-
cently been introduced in the Senate. The
bill was introduced in the Senate Com-
merce Committee July 29.
REACTIONS TO S&P DOWNGRADE
The staff of the Senate Banking Committee is seeking information about Standard
& Poor’s decision to downgrade the U.S.
credit rating, but no decision has as yet
been made to hold hearings or take other
action, according to a panel aide.
The committee staff decided to examine S&P’s decision after Sen. Tim Johnson,
D-S.D., panel chairman, called it “
irresponsible” and said it may have profound
spillover effects. “I am deeply disappointed
in S&P’s decision to enter into the game of
political punditry,” he says. NU
