Louisiana Withdraws from Nonadmitted Insurance Multi-State Agreement (NIMA)

Above:  Colodny Fass’ Donovan Brown Advises on Louisiana’s Withdrawal from NIMA

The Louisiana Department of Insurance announced late yesterday, July 15, 2015, that the State of Louisiana will withdraw from the Nonadmitted Insurance Multi-State Agreement (“NIMA”) and the NIMA-sponsored Surplus Lines Clearinghouse effective October 1, 2015.  Accordingly, Louisiana will no longer share surplus lines tax revenue with NIMA-participating states.  

The withdrawal comes pursuant to the enactment of HB 259, which was sponsored by Louisiana State Representative Ledricka Johnson Thierry, a Democrat.  

To read a summary of HB 259, click here.

Among other provisions, the bill repeals the requirement of Louisiana’s Insurance Commissioner to enter the NIMA, which provides its members with a mechanism to report, collect, allocate and distribute surplus lines tax revenues consistent with the Non-Admitted and Reinsurance Reform Act (“NRRA”).  The NRRA is part of the federal Dodd-Frank Wall Street Reform legislation enacted in 2010 that allows only the home state of the insured to require premium tax payments for non-admitted insurance in the absence of an agreement among states.

The announcement came as part of Bulletin 2015-06, which provides guidance for calculating, reporting and paying surplus lines taxes as a consequence of Louisiana’s withdrawal from NIMA and the reduction of the surplus lines tax rate.  

To view the complete Bulletin, click here.

Should you have any questions or comments, please contact G. Donovan Brown at Colodny Fass (+1 850 545 8864 or DBrown@ColodnyFass.com).

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