Rhode Island Becomes Seventh State to Enact the Surplus Lines Insurance Multi-State Compact (SLIMPACT)
Jun 3, 2011
With Rhode Island Governor Lincoln Chafee’s approval on May 27, 2011, Rhode Island became the seventh state to join the Surplus Lines Insurance Multi-State Compact (“SLIMPACT”). Kentucky, New Mexico, North Dakota, Indiana, Kansas and Vermont have also enacted SLIMPACT.
SLIMPACT, adopted in November 2010 by the National Conference of Insurance Legislators (“NCOIL”), is one of two Nonadmitted and Reinsurance Reform Act (“NRRA”) tax allocation proposals under consideration by states. The other is the Nonadmitted Insurance Multi-State Agreement (“NIMA”) endorsed by the National Association of Insurance Commissioners.
An NCOIL news release on Rhode Island’s enactment of SLIMPACT is reprinted below.
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SLIMPACT MOVES FORWARD: RHODE ISLAND IS LUCKY NUMBER SEVEN
Washington, DC, June 3, 2011-With the stroke of a pen on May 27, the State of Rhode Island became the latest to enact a Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT), as Governor Lincoln Chafee signed legislation advanced by NCOIL leaders Rep. Brian Kennedy, Sen. David Bates, and Sen. William Walaska. The state joined SLIMPACT one day after legislation was signed in Vermont, making Rhode Island the seventh to line up behind the vital state-based insurance modernization initiative.
As Rhode Island joins Kentucky, New Mexico, North Dakota, Indiana, Kansas, and Vermont in SLIMPACT, two other states will cross the finish line next week. On May 31, the Tennessee legislature sent NCOIL Secretary Rep. Charles Curtiss’s SLIMPACT bill to the governor, and the Alabama governor on June 6 is expected to sign NCOIL Treasurer Rep. Greg Wren’s SLIMPACT legislation that was approved late last night by the Senate. Other states remain in the race. In New York, legislation sponsored by NCOIL Past President Sen. James Seward has cleared two Committees on its way to the Senate floor, while Assem. Nancy Calhoun has introduced a companion bill in the Assembly.
NCOIL Past President Rep. Kennedy, Chair of the Rhode Island House Corporations Committee and sponsor of H.B. 5110 with several colleagues, declared:
SLIMPACT represents the one national surplus lines tax reform effort that enjoys the support of major organizations representing state legislators-including NCOIL, CSG, and NCSL-as well as the endorsements of key insurance industry and producer stakeholders. It was developed over many years and is patterned after a life insurance compact that now claims nearly 40 states as member jurisdictions. We look forward to similar broad adoption of SLIMPACT, as lawmakers are already comfortable with the insurance compact approach to national reform.
The NCOIL leader continued, “We are confident that we’ll soon reach the threshold to begin compact commission operations. Once 10 states join SLIMPACT, we believe that other states that pursued a wait-and-see approach will quickly follow. Lawmakers from such states-who may have been discouraged by allegations that SLIMPACT would not be operational-may seize the opportunity to align their states with the successful initiative.”
Rep. Kennedy added, “It is important that we make the transition from adopting SLIMPACT in the states to implementing the compact as seamlessly as possible. NCOIL, NCSL, and CSG are even now working together to get the compact commission up and running quickly and efficiently. NCOIL will soon convene Commission members, legislators, and interested parties to develop inaugural rules and tax allocation formulas. We look forward to a robust meeting in Newport as SLIMPACT Commission is formalized.”
Sen. Bates, a sponsor of S.B. 88 along with Sen. Walaska and others, stated:
We have witnessed tremendous progress in the first half of 2011, though Dodd-Frank gave states only twelve short months to enact and implement national reform-and this well after numerous states had adjourned in 2010. SLIMPACT passage will prove to Congress that states have heeded its call for uniformity and that states have been and will continue to be the best regulators of insurance.
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