Posted: 9/28/2006
NAMIC Optimistic: House Passes Surplus Insurance Lines Bill
WASHINGTON (Sept. 28, 2006)—Late yesterday afternoon, the House of Representatives unanimously approved H.R. 5637, the Non-Admitted and Reinsurance Reform Act. The bill, sponsored by Reps. Ginny Brown-Waite, R-Fla., and Dennis Moore, D-Kan., provides commonsense solutions to the non-admitted insurance, or surplus lines, and the reinsurance market within the property/casualty insurance industry.
“We applaud Reps. Brown-Waite and Moore on their sponsorship of this bill and commend House Financial Services Chairman Michael G. Oxley, R-Ohio, and members of the committee for moving forward on common sense reforms that all stakeholders in the insurance industry can support,” said the National Association of Mutual Insurance Companies (NAMIC) Sr. Federal Affairs Director Justin Roth.
“We believe that this legislation will help streamline both the surplus lines of insurance, and the reinsurance marketplace, while at the same time preserving the domiciliary states’ regulatory authority,” said Roth.
In support of H.R. 5637, NAMIC along with several key members of the insurance industry, sent a letter last week to House Majority Leader John Boehner, R-Ohio, stating that this bill will “benefit consumers who are vulnerable to terrorist attacks and natural catastrophic events with improvements in the availability and affordability of insurance coverage.”
H.R. 5637 would create a uniform system for taxing and regulating certain types of insurance products. Specifically, the bill would establish national standards for how states may regulate, collect, and allocate taxes for a type of insurance that covers unique or atypical risks—known as “surplus lines” or “nonadmitted insurance.” The bill also would establish national standards for how states regulate reinsurance—often referred to as insurance for insurance companies. In addition, the legislation would require a study by the Government Accountability Office (GAO) of the admitted and nonadmitted insurance market.
Specifically, provisions in the bill would:
- Prohibit states from taxing and regulating certain insurance products issued by companies not based in the state;
- Prohibit states from collecting fees from certain brokers of insurance unless states participate in a database of national insurance producers for the licensing of surplus lines brokers and the renewal of those licenses;
- Preempt laws in at least 40 states regarding how insurance polices with multistate risks are taxed and how those taxes are distributed among states; and
- Preempt laws in at least 14 states regarding certain requirements for reinsurance.
“By passage of this bill today, NAMIC is optimistic that Congress can help assist states in modernizing insurance regulation, without adding additional bureaucracy and regulation,” said Roth. “We are hopeful that the Senate will take up this very important measure as we have a unique opportunity to pass legislation that the insurance industry universally supports.”
For further information, contact
Georgiann Howell
(202) 628-1558 Tel
(202) 628-1601 Fax
ghowell@namic.org
Justin Roth
(202) 628-1558 Tel
(202) 628-1601 Fax
jroth@namic.org