WASHINGTON, D.C., June 29, 2009 —The Independent Insurance Agents & Brokers of America (the Big “I”) praised the introduction of S.1363, the Nonadmitted and Reinsurance Reform Act of 2009, by Sen. Evan Bayh (D-Ind.) and Sen. Mel Martinez (R-Fla.). The legislation is another example of a positive targeted approach to reform and is designed to streamline the regulation of nonadmitted insurance and reinsurance.
“S. 1363 is pragmatic legislation that will bring needed reform to an important component of the state insurance regulatory system: the surplus lines market,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs.
The legislation singles out two areas where there is general consensus for reform: surplus lines regulation and reinsurance supervision. Independent insurance agents and brokers play a crucial role in surplus lines (or nonadmitted) insurance, which provides coverage for unique or hard-to-place property-casualty risks.
The bill modernizes surplus lines regulation by making the insured’s home state the source of regulation for individual surplus lines transactions. The bill also seeks to reduce overlapping, multiple-state regulation of both reinsurer financial condition and credit-for-reinsurance on the balance sheets of ceding insurers.
“By applying single-state regulation and uniform standards to the nonadmitted and reinsurance markets along with giving the state sole regulatory authority, the surplus lines bill will preserve the strengths of the state-based insurance regulatory system without the need to create a federal insurance regulator,” says Tom Koonce, Big “I” assistant vice president for federal government affairs.
S.1363 is currently pending in the Senate Committee on Banking, Housing, and Urban Affairs. The bill was also co-sponsored by Senators Mike Crapo (R-Idaho) and Bill Nelson (D-Fla.) and is expected to continue to gain bipartisan support.
“We appreciate Senators Bayh and Martinez for introducing this measure and look forward to working with these Senators and others for passage in the 111th Congress,” says Symington.
Last month, the surplus lines bill was introduced by Rep. Dennis Moore (D-Kan.) and Rep. Scott Garrett (R-N.J.) in the House of Representatives. Similar legislation passed the House in previous Congresses with overwhelming support from both sides of the aisle. The Big “I” believes that such strong bipartisan support coupled with near-unanimous industry approval proves that this model of limited regulatory reform of state regulation is the appropriate and most practical approach.
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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