Surplus Lines (C) Task Force
Surplus Lines (C) Task Force Page
Joint Executive (EX) / Plenary Committee Summary Report
Summer 2009 Meeting Summaries Index

The Surplus Lines (C) Task Force met June 15, 2009.

During this meeting, the Task Force:

  • Received a request from the Producer Licensing (EX) Working Group that summarized it has reviewed discrete surplus lines issues as they relate to the Producer Licensing Model Act (#218), uniform licensing standards and/or reciprocity in licensing. Recently, there have been questions regarding the application of specific provisions of the model act to surplus lines agents. The Working Group currently has no charge to address the application of the commercial lines multi-state exemption to surplus lines. If charged with this review, the Working Group would require guidance from the Task Force specifically addressing the following issues that go beyond the scope of producer licensing:
    • Would exemption from nonresident state producer licensing requirements in situations where there is a multi-state risk impact the state’s ability to properly record and collect surplus lines premium tax?
    • If the answer to the first question is affirmative, are there alternative methods for the states to identify and collect premium taxes for multi-state risk exposures that would not require producer licensing?

The Task Force unanimously adopted a motion to assist with researching the aforementioned issues in order to provide guidance to the Working Group.

  • Heard a presentation on surplus lines brokers that described how the lack of uniformity among the states in regard to surplus lines regulation places burdens on insurance brokers. Items discussed included the lack of uniformity on tax-filing dates, no standardized allocation standards, not enough standardized licensing regulations, and challenges that brokers face in paying surplus lines taxes in multiple states. The Task Force adopted a motion to refer the materials to the Multi-State Surplus Lines Premium Tax Working Group in order to assist with their charges.
  • Discussed federal bill HR 2571: Nonadmitted and Reinsurance Reform Act of 2009.
  • Discussed the potential application of a draft interstate compact (Surplus Lines Insurance Multi-state Compliance Compact—SLIMPACT) to meet the goals of HR 2571. The Task Force then approved a motion to forward a survey created by interested parties to Task Force members regarding their input on the various components of SLIMPACT.
  • Received a report from the Multi-State Surplus Lines Premium Tax Working Group.

Action Items:

  • Adopted a motion to assist with researching specific issues in order to provide guidance to the Producer Licensing (EX) Working Group with regard to addressing the application of the commercial lines multi-state exemption to surplus lines.
  • Adopted a motion to refer certain materials to the Multi-State Surplus Lines Premium Tax Working Group in order to assist with their charges.
  • Approved a motion to forward a survey created by interested parties to Task Force members regarding their input on the various components of a draft interstate compact (Surplus Lines Insurance Multi-state Compliance Compact—SLIMPACT).
 

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