Upon reflection of NAPSLO's more than 40-year history of providing networking opportunities, regulatory and legislative advocacy, and education and career development programs, I believe the industry's future is very bright and well-positioned for continued growth and opportunity.
According to the 2014 A.M. Best Surplus Lines—Segment Review, the excess and surplus lines market is strong and stable, with an 8.4% increase in direct written premium in 2013 and 10 years of no financial impairments, with 100% of surplus lines carriers rated as "secure."
The Surplus Lines Stamping Office of Texas report for 2014 also demonstrates top line growth. That report indicates total surplus lines premium reported to the 14 states with stamping offices during the year was nearly $24.2 billion, representing an increase of 7.6% over 2013, and total filings with stamping offices up 6.9% over the previous year. I anticipate this growth will also be evidenced in the forthcoming 2015 A.M. Best report.
While these are good indicators of the industry's solid footing, NAPSLO continues to focus on several key regulatory and legislative initiatives that promote operational efficiencies for the surplus lines market. We are pleased with significant progress toward uniformity among all states in the regulation and taxation of surplus lines premium facilitated by the Nonadmitted and Reinsurance Reform Act (NRRA). The 2015 departures of Louisiana from the Nonadmitted Insurance Multistate Agreement, and North Dakota and Kansas from the Surplus Lines Insurance Multistate Compliance Compact, further improves the number and premium volume of states fully implementing the home state tax approach. This brings the total of jurisdictions retaining 100% of the taxes they collect to 47, representing more than 86% of the nationwide surplus lines premium.
The passage of the National Association of Registered Agents and Brokers Reform Act of 2015 (NARAB) was a significant step toward uniformity for multistate licensing. Similar to the NRRA, NARAB's national licensing standards also will continue to promote and preserve the state-based insurance regulatory system.
NAPSLO's advocacy for the surplus lines market is focused and positioned to further strengthen and secure its future, which is important for the P&C insurance industry. There is significant opportunity for NAPSLO members to serve as the safety valve for insurance risks that the standard market can't or won't underwrite. Their expertise and service is in demand and makes them important allies for retail agents and insurance buyers in need of innovative solutions to the most complex insurance risks.
Ask the Expert:
Q: During this next Congressional term, what isues will be of greatest focus for NAPSLO?
Kelley: NAPSLO is also working on behalf of its members to advocate for passage of The Flood Insurance Modernization and Market Parity Act of 2015. This flood legislation will provide needed clarity for lenders that they may accept private flood insurance solutions from surplus lines insurers, just as they had prior to the Biggert-Waters Act of 2012. The surplus lines industry has long-served as a successful supplemental market to the National Flood Insurance Program (NFIP). The new legislation introduced in June 2015 defines private flood insurers to include eligible surplus lines insurers using consistent terminology codified in federal law through the NRRA.
Brady R. Kelley, executive director, NAPSLO is responsible for the overall management of NAPSLO's staff activities, services to members and business operations. Before joining NAPSLO, he was chief financial and business strategy officer for the National Assn. of Insurance Commissioners with oversight of the finance division, products and services division, technical services division and financial regulation standards and accreditation program. Contact him at [email protected].
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
