On March 16, 2011, Kentucky Governor Steve Beshear signed into law the Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”). SLIMPACT is an interstate compact designed to (1) ease the regulatory burdens on surplus lines brokers in their placement of multi-state risks, (2) allow each compacting state to collect taxes on all nonadmitted risks where risk exposures are present in the compacting states, and (3) save surplus lines brokers money spent on costs associated with compliance and payment of taxes state-by-state on each multistate risk the broker places. In addition, SLIMPACT would create a commission comprising of members from the compacting states to, among other things, adopt uniform standards across participating compact states and uniform tax allocation formulas. Although a compacting state may have more than one member in the commission, each state in the commission is entitled to one single vote to give each state an equal vote.
SLIMPACT legislation has also passed the legislatures of New Mexico, North Dakota and Ohio and are awaiting signature by their respective governors. Enactment of SLIMPACT in Kentucky and New Mexico, North Dakota or Ohio would officially form SLIMPACT, and eight more states are needed to form the Commission.
We will provide updates on SLIMPACT on InsureReinsure.
