In connection with the Nonadmitted and Reinsurance Reform Act of 2010 of the Dodd-Frank Act (the “NRRA”), the legislatures of Wisconsin (SB 378), Colorado (HB 1215), Wyoming (HB 15), and Hawaii (SB 2168) have introduced bills to establish requirements that are consistent with the federal law for surplus lines insurers doing business in each of these states. Although California has not yet enacted similar legislation, the California Senate has introduced a bill (SB 716) declaring “the intent of the Legislature to reconcile California surplus lines and reinsurance law with the recent changes to federal law to minimize any possibly adverse effects of preemption” by the NRRA.
While Wisconsin’s and Colorado’s bills do not reference the surplus lines proposals approved by the National Conference of Insurance Legislators and National Association of Insurance Commissioners (SLIMPACT and NIMA, respectively), Hawaii’s bill is expressly modeled after SLIMPACT, stating the legislature’s intent to become the tenth state to enact SLIMPACT legislation. Upon passage of SLIMPACT by ten states, the compact would be effectuated for tax clearinghouse and rulemaking purposes. Additionally, Wyoming and Hawaii already participate in multi-state cooperatives under NIMA for the purpose of collecting surplus lines insurance premium taxes and fees and distributing those taxes and fees to the proper states.
On a related note, the Oklahoma House (HB 2458) and Senate (SB 1617) have introduced bills amending Oklahoma’s surplus lines legislation enacted last year to, among other things, specify that the insurance commissioner “is not compelled” to join NIMA or any other multistate premium-tax sharing agreement. We will report on whether these bills are passed into law in a later post.
This post written by Michael Wolgin.
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