Florida Surplus Lines Service Office National Clearinghouse Committee Report: June 21, 2011

The Florida Surplus Lines Service Office (“FSLSO”) held a National Clearinghouse Committee (“Committee”) meeting today, June 21, 2011, to hear a brief update on the FSLSO’s discussions with the National Association of Insurance Commissioners (“NAIC”) related to the operation of the proposed Nonadmitted Insurance Multi-State Agreement (“NIMA”) Clearinghouse (“Clearinghouse”).

Florida joined NIMA on June 15.  Mississippi and Hawaii also have joined NIMA and other states are expected to join.  NIMA provides for the creation of a Clearinghouse, the purpose of which is to collect premium taxes and distribute them efficiently to participating states pursuant to the surplus lines reform provisions of the Nonadmitted and Reinsurance Reform Act (“NRRA”), part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The FSLSO and the NAIC have been discussing a potential partnership to perform certain Clearinghouse services, with the FSLSO handling technical support and the NAIC providing operational and administrative support.  However, the two entities have been at odds over many details, including control of the required software.

At today’s meeting, FSLSO Executive Director Gary Pullen told the Committee that the NAIC has indicated it wants to continue discussions related to partnering on Clearinghouse operations and has drafted a nondisclosure agreement for consideration before any decisions are made.  Mr. Pullen said he does not have the nondisclosure agreement yet, but expects to receive it by the end of the week.  After the agreement is executed, the Committee can then resume discussions on a possible partnership, he said.

With no further business before the Committee, the meeting was adjourned.

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