Surplus Lines Bill Passes U.S. House Unanimously, Referred to Senate Banking Committee

After being placed on a suspension calendar for expedited action, the Nonadmitted and Reinsurance Reform Act of 2007 (House Resolution 1065) was passed unanimously by the United States House of Representatives with a voice vote on June 25, 2007. 

H.R. 1065 provides the home state regulator of an insurer primary oversight of multi-state surplus lines risks.  Under the bill, the home state regulator would also be responsible for allocating any taxes collected on the coverage to the other involved states.  The bill also makes it easier for sophisticated purchasers to access the surplus lines market and seeks to streamline the reinsurance market by giving sole regulatory authority for determining whether or not a particular insurer qualifies for reinsurance credit to the ceding insurer’s home state.

Heavily supported by the Council of Insurance Agents & Brokers and others for eliminating state-by-state regulation and its accompanying compliance issues, the bill has now been referred to the U.S. Senate Committee on Banking, Housing and Urban Affairs, where Committee Chairman Senator Chris Dodd is quoted as having said that panel heads would be taking a “good look” at the legislation this year.

U.S. Representatives Dennis Moore, D-Kan., and Ginny Brown-Waite, R-Fla. are the bill’s primary sponsors.  Similar legislation, S. 929, was introduced in the Senate in February by Florida Senators Bill Nelson, D, and Mel Martinez, R., however, the Senate version is viewed by the Risk and Insurance Management Society (“RIMS”) and others as requiring revision to ensure, among other changes, that the definition of “Qualified Risk Manager” is sufficiently broad to include as many RIMS members as possible.

While the legislation has support from many in the insurance industry, a similar measure that passed the House last year on a 417-0 vote died in the Senate. 

Surplus lines insurance covers unique, unusual or very large risks for which coverage is unavailable in the admitted market.  Its placements currently are subject to extensive regulatory requirements viewed within the insurance industry as an impediment to the effectiveness of the market, thereby increasing costs to surplus lines consumers, who are often unable to obtain insurance coverage otherwise.

H.R. 1065 would revise surplus lines insurance transactions to a single set of rules and regulations: those of the insured’s home state.

To review the most recent version of H.R. 1065 and other attendant bill information, click here.

To read news coverage and other documents related to H.R. 1065, click on the headlines below:

Surplus Lines Bill Passes House

House Gears For Action On Surplus Lines

CIAB Hails Passage of Surplus Lines Bill

House Approves Moore Bill to Ease Federal Financial Regulations

 

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