“With a state-by-state patchwork of laws related to producer licensing and forms and procedures, additional costs are commonly incurred by consumers,” says Scott B. Clark, president of RIMS, in a statement. “Inefficiencies have become more profound, raising questions about fundamental fairness in the insurance market.”

As an example of the states' flaw, RIMS points to states' implementation of the Dood-Frank act's Nonadmitted and Reinsurance Reform Act (NRRA) meant to create clarity to the regulatory and tax payment process in the surplus lines market.

Instead of clarity, states became divided over premium-tax allocation and two systems emerged—the Nonadmitted Insurance Multistate Agreement and the Surplus Lines Multistate Compliance Compact.

“Despite the clear intent of the NRRA, the states have not yet adopted nationwide uniform requirements, forms and procedures that provide for the reporting, payment and collection and allocation of premium taxes for nonadmitted insurance,” Clark writes to McRaith. “Additional Congressional action or pressure may be necessary.”

RIMS has “strongly supported” the FIO and it remains supportive of an optional federal charter, but realistic short-term “steps toward greater federal uniformity” are needed and “immediate federal regulation is impractical and should be slowed.”