Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > State Regulation

Uniformity Backers Test Water With Surplus Bill

Your article was successfully shared with the contacts you provided.

A life insurance official will testify Wednesday before a House panel on a bill that could require states to establish a uniform system of regulation for surplus lines and reinsurance products.

The hearing, before the Capital Markets Subcommittee of the House Financial Services Committee, concerns efforts to create a uniform regulatory system for the insurance industry by dividing the State Modernization and Regulatory Transparency Act bill into smaller bills that are easier to pass.

The uniform regulation bill, the Nonadmitted and Reinsurance Reform Act, is, in effect, a component of the SMART Act bill, observers say.

In May, House Financial Services Committee staffers were drafting a proposal that could give pre-emptive regulatory authority to home-state regulators.

The plan was to present a finished product to the 2 primary sponsors of the SMART Act, Reps. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, and Richard Baker, R-La., chairman of the capital markets subcommittee.

The Senate is considering another proposal that would give insurers the option of coming under the jurisdiction of a federal insurance regulatory agency.

The new bill would create a uniform system of premium tax allocation and collection for surplus lines and reinsurance.

It also would provide for deference to the policyholder’s home-state regulator for the nonadmitted market, and it would turn the nonadmitted insurance model act developed by the National Association of Insurance Commissioners, Kansas City, Mo., into a federal law.

The bill would rely on the home state for oversight to ensure the carrier’s reinsurance solvency while prohibiting extra-territorial application of state law.

The bill was introduced by Rep. Ginny Brown-Waite, R-Fla., and Rep. Dennis Moore, D-Kan.

An NAIC official said in response to the new bill that it is analyzing it and plans to monitor the congressional hearing.

“The NAIC will offer any technical guidance as appropriate,” says NAIC spokesman Scott Holeman.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.