WASHINGTON–The American Association of Managing General Agents has called on the members of the House Financial Services Committee to approve legislation designed to ease the regulatory burden on multistate surplus lines insurance transactions.
“This bill is vital to the needed modernization of the regulatory complexities existing in the surplus lines insurance marketplace, and we respectfully request the full committee's passage of the legislation,” wrote AAMGA Executive Director Bernd G. Heinze in letter sent to all 70 members of the committee.
Introduced by Reps. Roy Moore, D-Kan., and Ginny Brown-Waite, R-Fla., the Non-Admitted and Reinsurance Reform Act of 2006 would clarify the rules regarding multistate surplus lines transactions by establishing the insured's home state as the regulator for the transaction.
Additionally, the insured's home state would collect taxes on the transactions and would be charged with allotting them to the other states as needed.
The bill was approved unanimously by the Financial Services Subcommittee on Insurance last week. The full committee is scheduled to vote on the bill today, and Rep. Moore has said that he hopes to have it passed by the full House and Senate by late September or early October.
“We must remove the anchors of inconsistent, anti-growth regulations that prevent the surplus lines market to adapt and respond quickly to market changes and consumer needs with specialized coverages, while maintaining the state-based system of insurance regulation and the surplus lines market's fundamental precept of freedom from rate and form to benefit the consumer in the protection of its risk exposures,” Mr. Heinze said in the letter.
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