Resolution in Support of a Comprehensive Surplus Lines Insurance Compact
WHEREAS, Congress passed and President Barack Obama signed into law on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act;
WHEREAS, Title V, Subtitle B, Part I of Dodd-Frank, the Nonadmitted Insurance and Reinsurance Reform Act (NRRA), calls for states to streamline regulation of excess and surplus lines insurance;
WHEREAS, states need to act to achieve modernization and uniformity where necessary or the federal government will likely step in and preempt state regulation of insurance;
WHEREAS, Congress in NRRA authorizes states to enter into an interstate compact as a means for adopting uniform requirements, forms, and procedures and facilitating the reporting, payment, collection, and allocation of premium taxes for non-admitted insurance;
WHEREAS, the Surplus Line Insurance Multi-State Compliance Compact (SLIMPACT)—a compact developed over the past several years by non-admitted insurance experts, with input from insurance legislators, regulators, and industry representatives—establishes a mechanism that would fully respond to NRRA requirements;
WHEREAS, to date, other proposals brought forward do not go far enough to respond to NRRA provisions regarding uniform requirements, forms and procedures, but instead would continue the burdensome system that Congress seeks to eliminate and invite further federal preemption;
WHEREAS, as the NRRA requirements take effect in June 2011, states must act quickly or risk losing millions of dollars in premium tax revenue; and
WHEREAS, The Council of State Governments (CSG), the National Conference of Insurance Legislators (NCOIL), and the National Conference of State Legislatures (NCSL) support compacts as a way for states to modernize and achieve uniformity, while at the same time preserve state authority.
NOW, THEREFORE BE IT RESOLVED, that The Council of State Governments (CSG) supports The Surplus Lines Insurance Multi-State Compliance Compact, also supported by the National Conference of Insurance Legislators (NCOIL), the surplus and excess lines industry, and major national property-casualty and producer organizations—to comply with the NRRA and maximize state non-admitted insurance premium tax collection; and
BE IT FURTHER RESOLVED, that The Council of State Governments (CSG) urges states to take the appropriate measures to ensure compliance with NRRA, including joining The Surplus Lines Insurance Multi-State Compliance Compact to streamline and make more uniform non-admitted insurance regulation and to demonstrate to Congress that states can and will modernize when and where necessary.
Adopted by the Governing Board this 6th Day of December, 2010 at CSG’s 2010 National Conference in Providence, Rhode Island.