The clearinghouse that is the core of the Nonadmitted Insurance Multistate Agreement (NIMA) tax-sharing compact is set to begin operation July 1, according to the 11 states and territories that comprise it.
However, one industry lawyer who specializes in issues related to the implementation of the Nonadmitted and Reinsurance Reform Act (NRRA) says he'll believe it when he sees it.
“Just because the clearinghouse is set up doesn't mean it will be operational,” says Richard A. Brown, a senior lawyer with an accounting background who is a sole practitioner in San Francisco. “A lot of details have to be ironed out before there is any actual tax-sharing.”
Joel Wood, senior vice president of government affairs for the Council of Insurance Agents and Brokers, says that “unless there is a far greater critical mass of states that are engaged, this entire venture amounts to spending a dollar to collect a dime.”
Wood says the Council doesn't see any momentum among large states—New York, California, Texas, Illinois, Ohio, etc.—to join in this effort.
“I don't see any real movement, either, to reconcile the NIMA and SLIMPACT (Surplus Lines Insurance Multistate Compliance Compact) models,” Wood adds.
In a statement released by the Florida Office of Insurance Regulation, NIMA member-state representatives say they met via conference call March 30 and approved both a premium-tax clearinghouse-services agreement and license agreement.
The members of NIMA say that through the agreements, NIMA Inc. will contract with the Florida Surplus Lines Service Office (FSLSO) to serve as its central clearinghouse provider for the collection and allocation of surplus-lines premium-tax payments for multistate surplus-lines policies.
The FSLSO will serve as the technology-platform provider and will also provide all clearinghouse administrative duties.
The clearinghouse will begin receiving filings for policies issued or renewed on or after July 1, 2012.
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