TITLE 27

Insurance

CHAPTER 27-75

Surplus Lines Insurance Multi-State Compliance Compact

SECTION 27-75-2



   § 27-75-2  Preamble. –

WHEREAS, with regard to non-admitted insurance policies with risk exposures

located in multiple states, the 111th United States Congress, has stipulated in

Title V, Subtitle B the non-Admitted and Reinsurance Reform Act of 2010, of the

Dodd-Frank Wall Street Reform and Consumer Protection Act, hereafter, the NRRA,

that:



   (1) The placement of non-admitted insurance shall be subject

to the statutory and regulatory requirements solely of the insured's home

state, and



   (2) Any law, regulation, provision, or action of any state

that applies or purports to apply to non-admitted insurance sold to, solicited

by, or negotiated with an insured whose home state is another state shall be

preempted with respect to such application; except that any state law, rule, or

regulation that restricts the placement of workers' compensation insurance or

excess insurance for self-funded workers' compensation plans with a

non-admitted insurer shall not be preempted; and



   WHEREAS, in compliance with NRRA, no state other than the

home state of an insured may require any premium tax payment for non-admitted

insurance; and no state other than an insured's home state may require a

surplus lines broker to be licensed in order to sell, solicit, or negotiate

non-admitted insurance with respect to such insured; and



   WHEREAS, the NRRA intends that the states may enter into a

compact or otherwise establish procedures to allocate among the states the

premium taxes paid to an insured's home state; and that each state adopt

nationwide uniform requirements, forms, and procedures, such as an interstate

compact, that provide for the reporting, payment, collection, and allocation of

premium taxes for non-admitted insurance; and



   WHEREAS, after the expiration of the two-year period

beginning on the date of the enactment of the NRRA, a state may not collect any

fees relating to licensing of an individual or entity as a surplus lines

licensee in the state unless the state has in effect at such time laws or

regulations that provide for participation by the state in the national

insurance producer database of the NAIC, or any other equivalent uniform

national database, for the licensure of surplus lines licensees and the renewal

of such licenses; and



   WHEREAS, a need exists for a system of regulation that will

provide for surplus lines insurance to be placed with reputable and financially

sound non-admitted insurers, and that will permit orderly access to surplus

lines insurance in this state and encourage insurers to make new and innovative

types of insurance available to consumers in this state; and



   WHEREAS, protecting the revenue of this state and other

compacting states may be accomplished by facilitating the payment and

collection of premium tax on non-admitted insurance and providing for

allocation of premium tax for non-admitted insurance of multi-state risks among

the states in accordance with uniform allocation formulas; and



   WHEREAS, the efficiency of the surplus lines market may be

improved by eliminating duplicative and inconsistent tax and regulatory

requirements among the states, and by promoting and protecting the interests of

surplus lines licensees who assist such insureds and non-admitted insurers,

thereby ensuring the continued availability of non-admitted insurance to

consumers; and



   WHEREAS, regulatory compliance with respect to non-admitted

insurance placements may be streamlined by providing for exclusive single-state

regulatory compliance for non- admitted insurance of multi-state risks, thereby

providing certainty regarding such compliance to all persons who have an

interest in such transactions, including, but not limited to, insureds,

regulators, surplus lines licensees, other insurance producers, and surplus

lines insurers; and



   WHEREAS, coordination of regulatory resources and expertise

between state insurance departments and other state agencies, as well as state

surplus lines stamping offices, with respect to non-admitted insurance will be

improved; and



   NOW, THEREFORE, in consideration of the foregoing, it is

enacted by the general assembly as follows:



History of Section.

(P.L. 2011, ch. 20, § 1; P.L. 2011, ch. 29, § 1.)