Non-Admitted and Reinsurance Reform Act

In an effort to push legislation regarding uniform regulation of the insurance industry, federal lawmakers have unveiled a bill that is geared toward the creation of a uniform set of regulations for surplus lines.  The "Non-Admitted and Reinsurance Reform Act of 2006," a slimmed down version of the State Modernization and Regulatory Transparency (SMART) Act, addresses only E&S and reinsurance.   The bill, also called HR5637, includes the following provisions:

• As to E&S provisions, the bill provides that only the “home state” can tax but the states can enter into a compact or other device for allocation. Also, E&S brokers and direct procuring insureds can be compelled to provide allocation reports or information to the home state.
  
• Only the insured’s home state law applies to an E&S transaction, the E&S broker need only be licensed in the home state of the insured with regard to the particular risk and all other states laws are preempted generally.
  
• After two years from enactment, no state can charge an E&S licensee, fees for licensing unless the state participates in the NAIC national producer database or an equivalent.
  
• Eligibility of E&S insurers shall be determined by the NAIC IID List for Alien Insurers and provisions set forth in the NAIC Model Act for foreign insurers.
  
• Exempt commercial purchasers who receive a disclosure from the E&S broker and agree in writing to the placement of coverage with an E&S insurer when licensed insurers may be available, can obtain coverage without meeting any diligent search requirement. The definition of exempt commercial purchaser sets high net worth/ revenue or employee count standards or thresholds.
  
• The home state is defined as where the insured maintains its principal place of business or residence.
  
• Independently procured insurance is defined as: A) where an insured acquires coverage directly from a non-admitted insurer for a risk that is to be preformed in whole or in part in the insured home state or B) a multi-state insurance policy procured from a non-admitted insurer when placed by an E&S broker from another state.

On Wednesday, surplus lines carriers and brokers endorsed federal legislation favoring the creation of a uniformed rules system at a House Financial Services Committee hearing on bill HR5637.  State regulators did not participate in the hearing and several members of the committee used the hearing to propose further steps that Congress could take to preempt state regulation, including creating an optional federal charter for insurers.

For a copy of HR5637, please view the following document:
http://www.fslso.com/goto.aspx?ID=139

Month End/Quarter End Billing
FSLSO will stop importing files Friday, June 30, 2006 at 5:00 p.m. to begin quarter- and month-end billing. Submissions will still be accepted via FTP, but they will not be imported and billed for this month's accounting period if not received by that time. Be on the lookout for your service fee and tax invoices, Citizens assessment and EMPA surcharge.

FSLSO Receives Honors at AAMGA Annual Meeting

FSLSO was honored with two awards at the American Association of Managing General Agents' 80th Annual Meeting for its community service efforts and newsletter publication.

Thirteen AAMGA member organizations were honored with Community Service Awards from the association during the Annual Business meeting for their efforts to improve their communities in the past year.  The FSLSO was honored for its efforts to help the community through its annual Dale Pullen Scholarship Fund Golf Tournament, which raised more than $30,000 to provide financial aid to local high school seniors pursuing college degrees in 2006. 

The FSLSO also received an Advertising and Marketing Award for placing first in the newsletter segment of the Surplus Lines Category, for its newlsetter, The Advisor.