NAPSLO believes that in passing the NRRA, Congress sought to achieve a simpler and more efficient system of regulation and taxation of the surplus lines industry establishing the insured's “home state” as the one and only jurisdiction to regulate and tax surplus lines transactions.

“Congress also clearly expressed its intent that states establish a uniform, nationwide approach to the regulation and taxation of the surplus lines industry,” said Kish.

She added that NAPSLO believes that there are opportunities for the states to bring about the full spectrum of uniformity and efficiency envisioned by Congress and that is a key NAPSLO priority.

Parks noted that NRRA did not only focus on taxation but also addresses insurer eligibility, saying the “NRRA clearly defines criteria for carrier eligibility compliance requirements.

“States should not impose additional requirements beyond the NRRA,” she added.

Kish said that NAPSLO is also focused on eliminating requirements in states that exceed the NRRA insurer eligibility provisions.

Another key objective of NAPSLO advocacy efforts is uniform and reciprocal licensing of surplus lines brokers by the states, adds co-chair James C. Drinkwater, president CEO of the Brokerage Division of AmWINS, which is based in New York.

In line with that, NAPSLO strongly supports legislation this year creating the National Association of Registered Agents and Brokers (NARAB). Different versions have passed both the House and Senate and the industry is hoping it will pass Congress by the end of the year.

It has been a goal of the industry for a long time, and one was created through a 1999 law. However, there were strings attached to its creation, and state regulators were able to thwart its implementation by meeting certain thresholds.

“This is critical legislation, and there is no industry opposition to it,” said Drinkwater, who added that it will establish “vigorous” licensing and ethical requirements for agents, as well as uniform continuing education requirements.

Through a panel of state regulators and industry representatives, “it will establish requirements on a multi-state basis in lieu of every state having their own requirements for these criteria,” he added. “That will ensure consistency to these requirements.”

Parks said that her firm is mainly a Texas general agency. That is so “because it is hard to keep up with all the licensing requirements in each state,” she said. “This critical legislation will streamline agency licensing to allow us to operate on a multi-state basis.”

Parks said, that, “Once NARAB -II is passed, we would entertain doing multi-state risks.”

Drinkwater also noted that the NAPSLO Legislative Committee is watching closely as Congress deliberates whether to reauthorize the Terrorism Risk Insurance Act.

“We need to know as soon as possible what it is going to look like, and it needs to be reauthorized as soon as possible,” he added. “It is a primary concern of agents/brokers, and companies. We have to understand the TRIA backstop.”

Another high priority for NAPSLO is revisions to the federal definition of private flood insurance. Drinkwater said that NAPSLO strongly supports H. R. 4558, the Flood Insurance Market Parity and Modernization Act of 2014, which would clarify existing law so as to ensure that surplus lines insurers are eligible to offer private market solutions and alternatives to consumers in need of unique and complex flood risks. The companion Senate legislation is S. 2381.

“This is a growth opportunity for non-admitted insurers,” Parks said.

Drinkwater added, “We want legislation that will facilitate the ability of surplus lines insurers to be eligible to offer private market solutions and alternatives to consumers in need of solutions to complex flood risks.”

But, tax uniformity remains the key issue. NAPSLO recently analyzed the amount of tax dollars moving among the NIMA members. NAPSLO found that during the first five quarters of operation, the NIMA members shared approximately $1.1 million in tax dollars at an approximate cost of $1.6 million in filing fees.

As noted by Parks, sharing premium taxes with the state where the risk exists is “unnecessary, costly and burdensome to both the broker and the insured.” Parks said it is “detrimental to the consumer” because it increases compliance costs to the broker that far exceeds the amount of taxes to be reallocated to the states. “Therefore, there is no cost/benefit ratio.”

All of these issues are addressed in a set of “Guiding Principles on Uniformity in State Surplus Lines Regulatory Requirements” adopted by NAPSLO's Legislative Committee and Board of Directors this past June. Parks said that these Principles identify key areas NAPSLO wants to talk to state officials about in order to achieve greater uniformity.

“The document affirms NAPSLO's commitment to a uniform, state-based regulatory system,” said Parks. Drinkwater added that NAPSLO and the Legislative Committee are committed to working toward these uniform measures with the states.

Kish added that NAPSLO's tax sharing analysis, the Uniformity Principles and additional advocacy work and resources are available on the NAPSLO website and she encouraged all NAPSLO members to visit the site for more information.