SCOTTSDALE, Ariz.--National Association of Professional Surplus Lines Offices (NAPSLO) members have to step up within their own firms and talk to people about the importance of the association's political action committee (PAC), a member of the board of directors said yesterday morning.

Responding to a question from the floor at NAPSLO's town hall meeting about how the PAC, called NAPSLO PAC, is raising money and what its aspirations are, Kevin Westrope--CEO and president of wholesale brokerage Westrope, based in Kansas City--said the amount of money raised pales in comparison to the amount needed to make the PAC relevant in Washington, D.C.

The town hall meeting took place during NAPSLO's 2010 Mid-Year Conference held here.

The amount of money raised by the PAC last year, for a group this size, was unacceptable said Mr. Westrope. The figure, he noted, needs to be at least three times what was raised. Given the size of NAPSLO and the volume of its member firms businesses, the amount raised should have been much more.

Mr. Westrope acknowledged the challenges with raising money for the PAC because of the laws surrounding such contributions. He noted, for example, that he is limited in the methods he can use to solicit funds, and donations are not tax deductible and must be personal money--not company money.

But he called on the attendees in the room to "step up" and "take responsibility" in their own firms. He noted that of the 120 contributors to the PAC last year, around 30 to 35 were from his firm.

NAPSLO President Marshall Kath said the heavy lifting has come primarily from the board, whose members contributed the $5,000 maximum.

Mr. Westrope said even small contributions of $25 or $50 can make a difference. Ten thousand people donating $50 would be significant, he noted.

Mr. Kath said contributing now is especially important in this election cycle given all of the discussions around financial services reform.

Answering a question that was written in to NAPSLO before the meeting about state and federal issues affecting the surplus lines industry, Executive Director Richard Bouhan said surplus lines has grown to the point where it is now on regulators' radar screens. What was once seen as a "backup market," he said, has now become mainstream in regulators' and legislators' eyes, and that has made the industry more of a target.

He has seen an effort to try to put surplus lines in a regulatory box like the admitted market is, and said he expects to see more actions similar to a Florida Supreme Court decision that held that the surplus lines' exemption from form regulation was no longer valid.

That decision was overturned, Mr. Bouhan said, through the efforts of NAPSLO and other associations.

On the federal level, he said the U.S. House of Representatives has once again passed the Non-admitted and Reinsurance Reform Act (NRRA).

The bill, according to NAPSLO, "is aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance" by creating a uniform regulatory system while preserving the role of the state regulator.

Mr. Bouhan said the bill in the Senate is tied to broader financial services reforms, but there have been assurances that whatever reform comes out of the Senate will preserve NAPSLO's language for reform of surplus lines.

But challenges exist to a bill ultimately being passed. Mr. Bouhan said the Senate has to act, and then the bill in the House and Senate must be reconciled. There is a lot of work to be done. "Our language," he said, "depends on that bill getting passed."