A Senate bill that would offer a national license to insurance players needs modifications to make it fair and acceptable to the excess and surplus lines market, the sector's leading organization contends.

The National Association of Surplus Lines Offices–whose leadership in the past has expressed concern that an optional federal charter could make it easier for general lines insurers to compete in their sector–now supports the concept, at least in theory.

“NAPSLO believes that establishing an optional federal surplus lines license would be beneficial to the marketplace,” said the group's executive director, Richard Bouhan. “Those acquiring the license would not have to secure numerous state surplus lines licenses.”

However, NAPSLO expressed “disappointment” that the bill does not address some key concerns of the surplus lines industry.

“Unfortunately, NAPSLO's proposals to solve the current tax remittance and licensing problems of the industry were not included” in the bill, said Mr. Bouhan. As a result, he added, the legislation “remains incomplete by not addressing the concerns of the $35 billion surplus lines industry.”

Mr. Bouhan said NAPSLO would work with the bipartisan bill's two sponsors–Senators John Sununu, R-N.H., and Tim Johnson, D-S.D.–to add their proposals to future versions of the legislation.

The group has recommended that companies holding a proposed federal surplus lines license submit all state premium tax due on a transaction to the home state of the insured for distribution to all states where taxes are due.