Insurance Experts & Financial Reform Bill

Court BuildingSurplus lines insurers are big winners in the financial reform bill that Congress believes will prevent another economic meltdown that caused the current Great Recession.  The National Association of Professional Surplus Lines Offices called the non-admitted industry and their broker representatives “big winners” in the financial services reform legislation passed by the Senate Thursday.

At the same time, NAPSLO officials cautioned that to realize the full benefits of the law “the states must implement the surplus lines reforms in the way Congress has directed.”  The Dodd-Frank Wall Street Reform and Consumer Protection Act is expected to be signed by President Obama next week.

Regarding the surplus lines provisions, insurance expert and NAPSLO executive director Richard Bouhan explained that the full promise of this legislation will not be realized until the states have implemented through an interstate compact or similar mechanism uniform forms, processes and procedures for collection, payment and allocation of surplus lines premium tax.

Currently, the majority of states require payment of an allocated portion of tax on a multistate risk, but several state statutes impose the tax on the entire gross premium of a multistate risk which can create a “double tax” on a portion of the premium in some transactions.

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About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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