National Conference of Insurance Legislators Reviewing SLIMPACT-Lite at Annual Meeting Today
Nov 19, 2010
At the National Conference of Insurance Legislators (“NCOIL”) Annual Meeting today, November 19, 2010, state legislators and regulators discussed options for addressing mandates in the Non-Admitted Reinsurance Reform Act of 2010 (“NRRA”), which is part of the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The NRRA requires states to establish uniform surplus lines guidelines or risk losing the collection of premium taxes. It also requires the creation of a national database for surplus lines risks. A goal of today’s NCOIL Summit is to reach consensus on Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”) proposal.
At today’s meeting, Louisiana Insurance Commissioner Jim Donelon provided an overview of the most recent version of SLIMPACT, referred to as “SLIMPACT-Lite.”
According to the proposal’s drafters, SLIMPACT-Lite addresses all of the federal mandates in NRRA. It also enacts a Commission to oversee a clearinghouse that would receive and distribute insurance premium taxes.
Under the provisions of SLIMPACT-Lite, the tax rate of the “Home” state would apply to each state participating in the compact. Each state would have the opportunity to select a voting member of the Commission.
A main purpose of SLIMPACT-Lite is to keep the collection of premium taxes among the states close to the status quo. Under the provisions of the NRRA, if states cannot establish a uniform system, the non-Home states will lose the ability to collect premium taxes.
NCOIL’s SLIMPACT-Lite differs from the National Association of Insurance Commissioners’ (“NAIC”) corresponding model, in that the NAIC’s version is a memoradum of understanding among state regulators, whereas SLIMPACT-Lite would require state legislative adoption.
The goal is to adopt a proposal that would be provided to the states by the first of the year (2011).
NCOIL Summit participants adopted a motion to send SLIMPACT-Lite proposal to the NCOIL State and Federal Committee for consideration.
American Association of Managing General Agents Executive Director Bernie Heinze said, “AAMGA looks forward to continuing its collaboration with NCOIL and its leadership to ensure the surplus lines industry’s needs and the intent of Congress as reflected in the NRRA are fully realized.”
To view a copy of the SLIMPACT-Lite draft, click here.
Colodny Fass will provide additional information on this issue as it develops.
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