Legislation aimed at streamlining the regulation of multistate surplus lines and reinsurance regulation was reintroduced in the House on Thursday.

The bill has broad industry support, although some see it as an alternative to an optional federal charter, while others contend it stands alone, and that an optional federal charter is still needed.

Reps. Dennis Moore, D-Kan., and Ginny Brown-Waite, R-Fla., who also introduced the measure in the 109th Congress last year, announced the bill and expressed optimism that it would again be passed by the House.

But Senate support is uncertain. At an event on Capitol Hill sponsored by the Council of Insurance Agents and Brokers recently, Senate Banking Committee Chairman Chris Dodd, D-Conn. said the panel would take a “good look” at the bill.

The measure was approved by an overwhelming margin of 417-0 last year, but failed to surface in the Senate.

“Making the insurance market fairer and simpler benefits us all,” said Rep. Moore. “With such broad bipartisan support in the past, I'm confident this legislation, which is long overdue, will again receive very strong support in the House, and I hope the Senate will join us in passing this legislation.”

The bill would establish the insured's home state as the primary regulator for multistate surplus lines risks, and would also charge that state with collecting and allocating any taxes involved.

For reinsurance, the bill would give sole regulatory authority for determining whether or not a particular insurer qualifies for credit for reinsurance to the ceding insurer's home state.

Additionally, it would bar the extraterritorial application of state laws and allow ceding insurers and reinsurers to resolve disputes pursuant to contractual arbitration clauses. The legislation makes it easier for sophisticated purchasers to access the nonadmitted market.

“Our new bill makes it clear that the state where the policyholder resides should be the entity that is in charge of regulation,” said Rep. Brown-Waite. “Simplifying and streamlining the insurance market will bring savings to consumers and companies doing business across state lines.”

The bill has 41 original co-sponsors including Rep. Paul Kanjorski, D-Penn., who chairs a key House Financial Services Subcommittee, and the ranking minority member of the full Financial Services Committee, Rep. Spencer Bachus, R-Ala.

Opponents of a proposed optional federal charter are supporting the bill as an effective alternative to a federal regulator.

“This consensus bill contrasts sharply with proposals such as the 'optional' federal charter, which is very controversial both within the industry and on Capitol Hill,” said Charles Symington, senior vice president of government affairs and federal relations for the Independent Insurance Agents and Brokers of America.

“Four hundred and seventeen House members supported targeted reform last year, and we believe this action speaks volumes about the proper approach to reform the insurance market,” he said.

National Association of Mutual Insurance Companies spokesman Justin Roth also spoke in support of the bill's approach, which he said would appeal to lawmakers because it has received almost unanimous support from all aspects of the insurance industry.

“We believe that it would help streamline and modernize the surplus and reinsurance regulatory structure, while still leaving the day-to-day oversight to the domiciliary state,” he said. “As opposed to the optional federal charter concept in which the insurance industry is strongly divided, this legislation is an excellent example of common sense regulatory reform that the entire industry supports.”

Ben McKay, senior vice president, federal government affairs for the Property Casualty Insurers Associations of America, said the legislation is a “vital first step toward reforming and streamlining an increasingly burdensome state regulatory system.”

He noted, “We applaud Congressman Moore and Congresswoman Brown-Waite for reintroducing this important legislation, and we encourage their colleagues to move it forward expeditiously.”

Dennis Kelly, a spokesman for the American Insurance Association, said, “The 'Nonadmitted and Reinsurance Reform Act of 2007' is a good step toward modernizing state insurance regulation.”

Mr. Kelly added, “We also support comprehensive reform through an optional federal charter approach and we look forward to reintroduction of vitally important OFC legislation in both chambers this year. We believe that comprehensive reform of the current regulatory regime is critically needed.”

Support for the bill in the last Congress went beyond those seeking an alternative to OFC proposals, Joel Wood, senior vice president of government affairs for the Council of Insurance Agents and Brokers, said in agreeing with Mr. Kelly.

Passage of the bill is a “top legislative priority” in Washington this year, said Richard Bouhan, executive director of the National Association of Professional Surplus Lines Offices, Ltd., who added that the group's representatives in Washington have been meeting with members of the relevant House and Senate committees to urge passage of the bill.

NAPSLO President William Newton said the bill “will simplify the regulation of the excess and surplus lines business without diminishing consumer protections and provide consumers with more opportunities to secure property/liability insurance in areas where natural disasters have made insurance availability scarce.”