The Nonadmitted Insurance Multistate Agreement (NIMA) is now offering states an associate membership at no cost for one year, banking on the prospect that states will see that they have money on the table and join up. The surplus-lines revenue-sharing agreement is currently supported by six states and the NAIC.
States can contact the NIMA states about using the clearinghouse services for a trial period to allow for the reporting of single and multistate policy information without sharing tax revenue.
They will have access to the filing platform at no cost as they see how much premium they can tax, according to Merle Scheiber, South Dakota insurance director and NIMA chair.
Scheiber unveiled his pitch at the closed insurance commissioners’ roundtable meeting in Houston at the NAIC Spring National meeting and later in an interview.
“Over 20 states contacted us, plus four Midwestern zone states,” Scheiber said, saying that insurance regulators from other states were really enthused by the presentation once they saw what was possible.
The data will show the entire premium a state could have taxed, and will be accurate, which is key to providing more premium tax, he said.
The software platform has caught $247 million in premiums since about 2000, with $13 million in saves in the last nine months that NIMA has been operation, according to Scheiber’s presentation.
“We need to show them the money,” the insurance director said, regarding the other states’ hesitancy.
Florida Insurance Commissioner and NIMA Secretary, Kevin McCarty, said NIMA is “a proven successful and beneficial tax-sharing arrangement for participating member states. The new Associate membership is an advantageous concept for those nonmember states who would like reliable statistical information to gauge the potential financial benefits of joining NIMA without a long-term commitment. I encourage states to consider this trial option to see exactly how much premium revenue they could be receiving.”
“There’s money being left on the table,” said Scheiber’s insurance department deputy, attorney Joshua Andersen.
Andersen noted that all six states have banked premium tax on the positive side of the ledger, and that as of April 1, NIMA has collected $ 6 million in reported premium.
NIMA has $266,045,730 in premium reported to date and $11,678,394 in taxes reported to date, for the three quarters it has been operational.
“We don’t think states are going to lose as much as they think,” Scheiber said.
Some have suspected Florida is getting the lion’s share of the premiums to tax.
Since Jan. 1 of last year, six states (Alaska, Connecticut, Hawaii, Mississippi, Nebraska and Nevada) have withdrawn from NIMA, leaving Florida, Louisiana, Puerto Rico, South Dakota, Utah and Wyoming as the only jurisdictions that have adopted a uniform system to implement the premium-tax-sharing component of the NRRA.
NIMA began operation July 1, 2012. It is being run by the Florida Surplus Lines Office, with Tiffany Maruniak serving as the clearinghouse’s manager. Brokers are now able to submit data to the clearinghouse via the Surplus Lines Information Portal (SLIP).
SLIP utilizes the Surplus Lines Automation Suite (SLAS) platform to collect policy data and calculate surplus-lines taxes and fees on behalf of the NIMA participating states.