Surplus Lines Insurance Multi-State Compliance Compact (SLIMPACT) Commission Holds Inaugural Meeting

 

The Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”) Commission (“Commission”) held its first meeting via Webinar on June 24, 2011 to review a slate of draft bylaws that would be used to govern itself, along with a draft rule to establish procedures for the adoption, amendment and repeal of SLIMPACT Commission rules.  SLIMPACT was developed to implement the express provisions of the Nonadmitted and Reinsurance Reform Act.  The Commission was established to fulfill SLIMPACT objectives through joint cooperative action among the compacting and contracting states.

To view the draft bylaws, click here.  To view the draft rules, click here.

National Conference of Insurance Legislators (“NCOIL”) President and North Dakota State Representative George Keiser opened the meeting, saying he was “tremendously thrilled” with the robust meeting attendance and eager to begin the process of launching the SLIMPACT Commission.  He explained that SLIMPACT became effective and binding upon its enactment by two states.  The number of participating states has now grown to nine.

SLIMPACT stipulates that, when membership reaches 10 states, the Commission shall become effective for purposes of adopting Compact rules and creating a Clearinghouse, Representative Keiser explained.

The bylaws and rules being considered by the Commission are modeled after those used by the Interstate Insurance Product Regulation Compact Commission.

The Commission’s goal is to have the SLIMPACT bylaws and rules ready for formal consideration and adoption at NCOIL’s upcoming Summer meeting in Newport, Rhode Island on July 15, 2011.

Hosted by NCOIL, together with the National Conference of State Legislatures and the Council of State Governments, the Webinar was the first in a series of several scheduled meetings to review the Commission’s model bylaws and rules.  The next Commission meeting is scheduled for Friday, July 1, 2011 at 1:00 p.m. EST.

It was explained that letters were sent three weeks ago to each SLIMPACT member state requesting that the appropriate appointing authority make an appointment to the Commission.  To date, appointment letters from Indiana, Kansas and Kentucky have been received.  Other states have indicated their appointment process is underway.

NCOIL Executive Director Susan Nolan led the review of the draft bylaws, which are divided into 10 sections.  However, her review drew little response.

Most proposed changes involved minor language revisions.  In one section outlining who should receive written, electronic notice of the Commission’s intention to adopt a rule, it was noted that many of the listed recipients might not be interested in receiving such notice.  Another suggestion was to give more latitude in designating when annual Commission meetings are to be scheduled by adding language that says, “as early as possible after” whatever the chosen date is.  Under “Operations Committee,” it was noted that the existing language appeared to preclude the participation of regulators, therefore the wording possibly should be changed.

“I think there is a balance that needs to be struck,” it was stated.  “It possibly should be struck more in the direction that we don’t exclude regulators.”  It was agreed the language should be modified and returned by July 1 for review.

The Commission did not have enough time before adjournment to begin reviewing the draft rule on rulemaking procedures.

During a question-and-answer period, a representative from Vermont inquired whether a state that had signed SLIMPACT could also join the Nonadmitted Insurance Multi-State Agreement (“NIMA”).

“My fear is that we lose possible revenue by only being in the compact or only being in NIMA,” the Vermont representative said.  “We don’t know if the compact itself has any binding effect from precluding a state from joining another agreement.”

The response provided was that SLIMPACT would take precedence in any instances that the two agreements conflicted.

“Since compacts are contracts, you have expressed your determination as a state by becoming a member to abide by that.  The legislature or any other party can’t impugn that contract by enacting any sort of other conflicting agreement,” it was noted.

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

 

Should you have any questions or comments, please contact Colodny Fass.

 

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