Moreover, it will generate greater efficiency in the license process, he adds, “and that means better service and lower costs for the insurance consumer.”

The bill creating NARAB is just one of the legislative issues on which NAPSLO officials and the trade group's members are focusing.

They are also working to ensure nationwide uniformity in the rules needed to comply with the federal Nonadmitted & Reinsurance Reform Act (NRRA) and support home state taxation as the favored system for sharing taxes generated under NRRA.

Under this system, surplus lines taxes are calculated at the home state's tax rate on 100 percent of the premium and retained 100 percent by the home state.

“With 46 states representing more than 80 percent of nationwide premium already following this approach, NAPSLO believes home state taxation is the only viable and uniform national solution,” says Keri Kish, NAPSLO's director of government relations.

Leonard adds that NAPSLO “has said in the past and we continue to believe that the cost of tax sharing greatly exceeds the benefits of re-allocation of surplus lines tax dollars among the states that are participating in a tax-sharing arrangement. While we think there is minimal benefit to states from tax sharing, we see real additional costs to consumers.”

As for eligibility standards, states are slowly moving to implement the NRRA insurer eligibility requirements, according to James Drinkwater, a NAPSLO board member and president of the Brokerage Division of AmWins, Charlotte, N.C.

“I believe the states should continue to provide an advisory list of eligible foreign insurers in order to provide a level of confidence for the consumer on such placements,” says Drinkwater.

He believes “it will be a significant burden” for surplus lines licensees to be totally responsible for the financial review of non-admitted insurers.

Drinkwater says the first move should be to eliminate zero report filings for entity and individual surplus lines licensees in the significant number of states that maintain that requirement: “I know NAPSLO has been working on elimination of zero reports for some time, and looks like some states may be coming around to that way of thinking soon.”

The best-case scenario in this area, he says, would be uniformity of timelines and data required for reporting and payment: “I think we are a long way from that due to the vast array of current requirements of each state.”

He said that from AmWINS' perspective, actually paying taxes more frequently lends itself to more efficiency–monthly or quarterly.

“But I imagine small wholesalers would prefer annual,” Drinkwater adds. “Larger states for us that are annual make it difficult to reconcile from the filers end as well as accounting.”

Moreover, “we need electronic payments to be available in every state; this is a much more efficient approach and provides a significant cost savings.”

Kish adds that NAPSLO is working with other insurance trade associations, with the National Association of Insurance Commissioners (NAIC) and its Surplus Lines Task Force regarding the need for the uniform implementation of the NRRA's insurer eligibility standards nationwide.

“We believe there is still tremendous opportunity to improve uniformity in a number of areas, such as tax forms, filing requirements, filing dates and procedures,” says Kish. “We continue to promote and work to preserve the uniformity and efficiencies intended by the NRRA.”

Kish notes that since the NRRA became effective, many states have abolished certain eligibility requirements and so-called “white lists” and that some states have converted the latter to voluntary lists. “NAPSLO believes these actions are consistent with and support the intent of the NRRA and applauds the hard work of states as they work to comply with the law,” she says.

Kish cautions that not all states have discontinued their requirement that a carrier must be on an approved list. NAPSLO, she says, continues to work to encourage these states to fully implement the NRRA. She cited Louisiana, which removed its “white list” in favor of a voluntary list this past legislative session.