“Our members are saying they want what gets to a uniform tax allocation system for surplus lines,” Kelley says from the NAPSLO convention.

NAPSLO supports the Surplus Lines Insurance Multi-State Compliance Compact (SLIMOACT) advocated by the National Conference of Insurance Legislators (NCOIL) because it gets closer to accomplishing that goal, Kelley says.

The NAIC, where Kelley was most recently the chief financial and business strategy officer, advocates for a different tax-sharing arrangement among states—the Nonadmitted Insurance Multi-State Agreement (NIMA).

The agreements are part of the implementation of Nonadmitted and Reinsurance Reform Act (NRRA), adopted to simplify and streamline the surplus lines tax-payment and regulatory system. The formation of tax-sharing agreements was left as an option, and it's possible they have strayed from the legislation's intent, says Kelley.

“There has been less uniformity than the federal law intended as a result of these compacts,” Kelley says. NRRA implementation is “top of the mind” at the convention, as he meets with members for the first time.

The Kentucky Department of Insurance has developed a compromise proposal, and commissioners in SLIMPACT states have signaled support for this approach.

“We hope this will get us closer to uniformity,” adds Kelley, who replaces Richard M. Bouhan.

Bouhan is retiring after 30 years with NAPSLO but is staying on through June 2012 in order to work on the transition and legislative and legal issues for NAPSLO.

“We must constantly monitor any threats to our industry's freedom of rate and form,” Kelley says.

NAPSLO treated Bouhan to a short, narrated slide show to commemorate his career and the impressive growth of the association, which set a record for attendance at this year's convention with about 3,400 members.