As with earlier versions of this legislation, S. 1363 would create a uniform system of surplus lines premium tax allocation and remittance, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated commercial purchasers. As for reinsurers, the bill proposes, in most instances, to have reinsurers subject only to the solvency rules of their state of domicile. The legislation has the backing of the major industry trade groups, including the National Association of Professional Surplus Lines Offices (NAPSLO), the Risk and Insurance Management Society (RIMS) and The Property Casualty Insurers Association of America (PCI).
The Senate took up a similar bill in 2007 (S. 929), discussed here, and the House of Representatives passed virtually identical versions of this bill in the last two sessions of Congress, discussed here, but no action was taken in the Senate prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress this year in order to be considered.
In order for the legislation to become law, approval would be required in both chambers of Congress. Industry sources have indicated that in early July, H.R. 2571 will be passed under suspension, which means that no opposition to its passage is expected.
We are monitoring this legislation and will continue to advise of all continuing developments.
