S. 929 would streamline the regulation of nonadmitted insurance and reinsurance.
Detailed Summary
Nonadmitted and Reinsurance Reform Act of 2007 - Prohibits any state other than the home state of an insured from requiring a premium tax payment for nonadmitted insurance.
Authorizes states to enter into procedures to allocate among themselves the premium taxes paid to an insured's home state.
Allows an insured's home state to require surplus lines brokers and certain insureds to file annually tax allocation reports detailing the portion of the nonadmitted insurance premiums attributable to properties, risks, or exposures located in each state.
Declares that Congress intends that each state adopt a nationwide or uniform procedure that provides for the reporting, payment, collection, and allocation of premium taxes for nonadmitted insurance.
Subjects nonadmitted insurance solely to the regulatory requirements of the insured's home state.
Declares that only an insured's home state may require a surplus lines broker to be licensed to conduct nonadmitted insurance business with respect to such insured.
Prohibits a state from collecting fees relating to licensure of a surplus lines broker unless it has a regulatory mechanism for participation in the national insurance producer database of the National Association of Insurance Commissioners (NAIC), or any other equivalent uniform national database.
Prohibits a state from: (1) establishing eligibility criteria for nonadmitted insurers domiciled in a U.S. jurisdiction except in conformance with the Non-Admitted Insurance Model Act; or (2) prohibiting a surplus lines broker from placing nonadmitted insurance with, or procuring nonadmitted insurance from, a nonadmitted insurer domiciled outside the United States and listed on the NAIC International Insurers Department Quarterly Listing of Alien Insurers.
Prohibits a state from denying credit for reinsurance if the state of domicile of an insurer purchasing reinsurance recognizes credit for reinsurance for the insurer's ceded risk and: (1) is either an NAIC-accredited state; or (2) has financial solvency requirements substantially similar to NAIC accreditation requirements.
Reserves to the state of domicile of a reinsurer sole responsibility for regulating the reinsurer's financial solvency if the state is NAIC-accredited, or has financial solvency requirements substantially similar to NAIC accreditation requirements.
Prohibits a state from requiring a reinsurer to provide financial information other than that required to file with its NAIC-compliant domiciliary state.
Status of the Legislation
Latest Major Action: 3/20/2007: Referred to Senate committee. Status: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Points in Favor
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Points Against
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Visitor Comments
TX SL Broker
This bill provides an absolute improvement over the current system of self-imposed “individual state authority” on a multi-state commercial risk. Our current system provides a surplus lines broker with 50 different and conflicting laws. It is truly impossible for just 7 states to agree on the color of grass, let alone the allocation of an insurance policy’s tax. Try finding one insurance department employee that can “correctly” tell the out of state broker how to file the allocated tax… 98.3% have it wrong 100% of the time.
Next Step – One “Multi-State Surplus Lines Stamping Office” with one “Multi-State Tax Allocation Form.”
(…maybe by the year 2205)