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House Passes Surplus Lines Bill

The U.S. House of Representatives passed legislation on September 9 to reform and streamline regulations for nonadmitted commercial surplus lines insurers and reinsurers. The legislation,...
September 15, 2009

The U.S. House of Representatives passed legislation on September 9 to reform and streamline regulations for nonadmitted commercial surplus lines insurers and reinsurers. The legislation, H.R. 2571, "the Nonadmitted and Reinsurance Reform Act of 2009," passed unanimously under expedited procedures on a voice vote. Its primary sponsors were Reps. Dennis Moore (D-Kansas) and Scott Garrett (R-N.J). The bill now moves to the Senate, where it was introduced on June 25 by Sen. Evan Bayh (D-Ind.); Sen. Mike Crapo (R-Idaho); Sen. Bill Nelson (D-Fla.); and Sen. Mel Martinez (R-Fla.), who resigned effective September 9.

The bill, which would subject the surplus lines transactions to a single set of regulations regardless of the location of the risk, now moves to the Senate. According to insurance industry officials, the practical effect of the legislation would be to provide incentives to states to create an interstate compact that would govern multistate surplus lines placements. The National Association of Insurance Commissioners (NAIC) did not formally support the legislation.