Uniformity among state surplus lines rules tops WSIA legislative priorities
Private flood insurance and cannabis-coverage are also priority topics for the association’s legislative committee.
Uniformity in regulations among the states is among the most pressing issues on the 2022 agenda for the Wholesale & Specialty Insurance Association (WSIA) Legislative Committee, which is also closely watching lawmakers’ moves around flood insurance and coverage issues for cannabis–touching entities.
“Overall, our priority is always trying to increase uniformity among states on regulations for surplus lines,” says Phillip McCrorie, CEO of RSUI and WSIA Legislative Committee Co-Chair. McCrorie explains the association advocates particularly hard for the adoption of its uniformity and regulatory principles, which stress the importance of freedom of rate and form for surplus lines.
“Additionally, there is an urgent need for more consistency when it comes to licensing, particularly producer licensing,” adds Coryn Thalmann, CEO of Jimcor Agencies and WSIA Legislative Committee Co-Chair. Questions about how to interpret or what to expect from certain states when it comes to licenses are the most common questions the WSIA gets from its members.
An important step in achieving these goals, and another priority for 2022, is working with the National Association of Insurance Commissioners (NAIC) to review and modernize a state-level model law for the non-admitted insurance market. Keri Kish, director of government relations for WSIA, notes “The review of the NAIC Model 870 Act offers the surplus lines segment a great opportunity to build on our relationships with state regulators and legislators and help shape changes that allow the market operate more effectively and efficiently.”
The effort to modernize regulations on surplus lines found success earlier this year as Maryland is set to update broker fee caps. Through a series of negotiations, legislation was passed that will raise the cap on the personal line side from $100 to $200, and the commercial fee cap will move up from $250 to $500 or 7%, whichever is greater. Further, the legislation codifies that there are no fee caps for surplus lines policies sold to exempt commercial purchasers.
Flood, cannabis legislative opportunities
In September, Congress will consider the renewal of the National Flood Insurance Program (NFIP), which has been renewed 22 times since being introduced in 2017.
WSIA anticipates it will be renewed again, and the association is advocating for revisions to the definition of private flood, implementation of a “continuous coverage” provision and the elimination of the prohibition on returning NFIP premiums to policyholders that move to the private market midterm.
Players in the surplus market are also closely watching legislative activities around cannabis. Of special interest is the Secure and Fair Enforcement (SAFE) Banking Act, which would provide a safe harbor for financial services providers working with legally operated cannabis-related businesses.
Although the act has passed in the U.S. House of Representatives six times, it has yet to gain any traction in the Senate. However, in July, the Senate saw the introduction of the Cannabis Administration and Opportunity Act, which has a host of decriminalization and scheduling provisions but doesn’t provide the safe harbors that are included in the SAFE Banking Act.
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