NU Online News Service, June 17, 2:58 p.m. EDT
Mississippi joins Florida and Hawaii in signing the Nonadmitted Insurance Multistate Agreement (NIMA) to implement the Nonadmitted and Reinsurance Reform Act of 2010—a surplus-lines-related component of the Dodd-Frank financial-services reform bill.
The signing of this agreement, says Insurance Commissioner Mike Chaney, protects up to $16 million in annual premium taxes, of which $10 million goes to the Mississippi Windstorm Underwriting Assoc., or Wind Pool, the state's last-resort insurer.
"Hopefully this will pave the way for more states to sign on and conserve badly needed general-fund revenue," says Chaney in a statement.
The NRRA mandates that beginning July 21, the insured's home state will be the only state with jurisdiction over surplus-lines transactions, and the only state that can require a tax be paid by the broker. States other than the home state stand to lose premium taxes in the case of multistate policies, says Chaney.
The measure is meant to increase the efficiency and uniformity of regulation of the surplus-lines insurance market, but Richard Bouhan, executive director of the National Association of Professional Surplus Lines Offices (NAPSLO), says NIMA is contrary to this objective.
Industry trade groups, including NAPSLO, the American Insurance Association (AIA), and the Property Casualty Insurers Association of America (PCI), are supporting an alternative compact called SLIMPACT-Lite, or Surplus Lines Insurance Multi-State Compliance Compact, which is promoted by state legislators, including the National Conference of Insurance Legislators (NCOIL).
Most recently Tennessee and Alabama passed legislation authorizing those states to join SLIMPACT. They are the eighth and ninth states authorized to participate in the compact, which becomes official when 10 states join.
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