This updates our May 26, 2009 and July 2, 2009 blog posts.
On September 9, 2009, the U.S. House of Representatives passed the Non-admitted and Reinsurance Reform Act of 2009, H.R. 2571 (the “NRRA”), marking the third time the House has passed a version of the NRRA.
The NRRA 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 NRRA has the backing of the major industry trade groups, including the National Association of Professional Surplus Lines Offices (NAPSLO), the Council of Insurance Agents & Brokers (CIAB), the Risk and Insurance Management Society (RIMS) and The Property Casualty Insurers Association of America (PCI).
CIAB President Ken A. Crerar stated, “Adopting this reform legislation is a practical solution to longtime marketplace problems. The result will be lower costs to insurance consumers and greater access to affordable products [by freeing up capital].”
The NRRA must now be passed by the U.S. Senate. Companion legislation, S. 1363, was previously introduced on June 25, 2009. It is unclear whether the Senate plans to take up the NRRA on its own, as part of an overall insurance regulatory reform bill, or at all this session.
We will continue to monitor the NRRA and provide updates on InsureReinsure.com.
