NRAA Publications

My numerous articles about the NRRA cover a plethora of surplus lines issues from original implementation effective July 21, 2011, to issues that continue to cause confusion for surplus lines brokers.

These issues include the NRRA exemption from diligent search requirements as well as state attempts to redefine certain NRRA terms and provisions to generate additional surplus lines tax revenue, have redefined what is subject to surplus lines tax. These issues concern, among others, whether broker compensation is subject to surplus lines tax, a continuing saga.

There also is the issue of alien surplus lines insurers and whether the NAIC provides adequate oversight. And, historically, why state efforts to share surplus lines taxes failed.

The definition of “Home State” continues to be a thorny issue, particularly for “affiliated groups.”

What Is an NRRA Exempt Commercial Purchaser?

NRRA Exemption from Diligent Search: Some larger commercial insurance brokers appear to be uncertain about how the Exempt Commercial Purchaser (ECP) feature of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), part of the Dodd Frank Act, effective July 21, 2011, works.

Posted in Uncategorized | Comments Off on What Is an NRRA Exempt Commercial Purchaser?
Read moreView PDF

Things to Consider When Charging Broker Fees

A broker fee is a fee in addition to premium and commission that is charged by retail and wholesale insurance brokers and that ultimately is paid by
the insurance buyer. Such fees are subject to two overriding rules: (1) they must be fully disclosed to the insurance buyer and (2) they must be reasonable.

Posted in Uncategorized | Comments Off on Things to Consider When Charging Broker Fees
Read moreView PDF

To Fee or Not to Fee… That is the Question!

Presentation On Broker Fee Considerations

Posted in Uncategorized | Comments Off on To Fee or Not to Fee… That is the Question!
View PDF

Rebating Laws Should Not Apply to Broker Fee Agreements

Broker Fee Agreements: A negotiated retail broker agreement is a contract between a retail producer and an insuranace buyer whereby the parties agree to a total package of services for a fee that takes account of the broker’s commission compensation for procuring insurance — as well as for other “value-added” services that may extend beyond the specified terms of the various insurance policies.

Posted in Uncategorized | Comments Off on Rebating Laws Should Not Apply to Broker Fee Agreements
Read more

Why Regulators Should Dump Anti-Rebating Laws

Anti-Rebating Laws are Anti-Competitive: For the commercial property and casualty, and employee benefits segments of the insurance industry, anti-rebating laws are both nonsense and anti-consumer. Competition is intended to protect competitiveness in the marketplace, not to protect competitors.

Posted in Uncategorized | Comments Off on Why Regulators Should Dump Anti-Rebating Laws
Read more

Surplus Lines Regulatory Picture for 2013

Emerging Surplus Lines Market Risks: State implementation of the Nonadmitted and Reinsurance Reform Act (NRRA), effective July 21, 2011, proceeded relatively smoothly during 2012, albeit with a few hiccups as industry and regulators navigated the transition to home state taxation and regulation of surplus lines transactions.

Posted in Uncategorized | Comments Off on Surplus Lines Regulatory Picture for 2013
Read more

Surplus Lines: Regulators Vetting of Alien Nonadmitted Insurers

The NAIC as Gatekeeper for Alien Surplus Lines Insurers: The National Association of Insurance Commissioners (NAIC) is a non-profit entity that acts as the trade association for state insurance commissioners.

Posted in Uncategorized | Comments Off on Surplus Lines: Regulators Vetting of Alien Nonadmitted Insurers
Read more

Surplus Lines Analysis: Multistate Clearinghouse Economics Don’t Work

Multistate Clearinghouses for Surplus Lines Premium are Destined for Failure: Recent data from Florida indicate that the economics for a multistate surplus lines tax allocation clearinghouse are unworkable. There simply is not enough multistate surplus lines tax to support the cost of a clearinghouse.

Posted in Uncategorized | Comments Off on Surplus Lines Analysis: Multistate Clearinghouse Economics Don’t Work
Read more

Good Morning NRRA! Home State Scenarios for Affiliated Groups

Gaming the NRRA to Reduce Surplus Lines Tax: Welcome to the magical mystery tour of Home State taxation and regulation under Nonadmitted Insurance and Reinsurance Reform Act of 2010 (NRRA). The NRRA went live at 12:01 a.m., July 21, 2011, in all time zones. You may have been sleeping.

Posted in Uncategorized | Comments Off on Good Morning NRRA! Home State Scenarios for Affiliated Groups
Read more

Surplus Lines Sea Change: Calif.’s AB 315

NRRA Transition Rules: California is expected to pass surplus lines regulations before July 21, 2011. On that date, the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) becomes effective, and only the “insured’s home state” may tax surplus lines premium and regulate surplus lines transactions.

Posted in Uncategorized | Comments Off on Surplus Lines Sea Change: Calif.’s AB 315
Read more

Pending State Legislation to Implement NRRA Is Fly in the Ointment

California Tries to End-Run NRRA Home State and Other Definitions: Pending state legislative proposals, such as California’s AB 315, that would implement the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA) are akin to the fly in the ointment.

Posted in Uncategorized | Comments Off on Pending State Legislation to Implement NRRA Is Fly in the Ointment
View PDF

How the California Bill Implements Federal NRRA Surplus Lines Reform

California Tries to Retain Pre-NRRA Taxing System: The Nonadmitted and Reinsurance Reform Act (NRRA), Subtitle B, Part I, Dodd-Frank Wall Street Reform and Consumer Protection Act, reaches out and touches California on July 21, 2011. In anticipation of its effective date, the California Department of Insurance (CDI) has crafted Assembly Bill No. 315 (AB 315).

Posted in Uncategorized | Comments Off on How the California Bill Implements Federal NRRA Surplus Lines Reform
View PDF

NRRA Surplus Lines Requirements: The Devil is in the Details

Ground Rules for NRRA Compliance: When the Nonadmitted and Reinsurance Reform Act (NRRA), Subtitle B, Part I, Dodd-Frank Wall Street Reform and Consumer Protection Act, takes effect on July 21, 2011, it will represent a sea change for taxation and regulation of surplus lines insurance.

Posted in Uncategorized | Comments Off on NRRA Surplus Lines Requirements: The Devil is in the Details
View PDF

NRRA Compliance Checklist: Prepare Now for Surplus Line Tax Changes and Enjoy Your Summer Vacation

Initial Compliance with NRRA: The Nonadmitted and Reinsurance Reform Act (NRRA), Subtitle B, Part I, Dodd-Frank Wall Street Reform and Consumer Protection Act, will usher in a new era of premium taxation and regulation for surplus lines insurance.

Posted in Uncategorized | Comments Off on NRRA Compliance Checklist: Prepare Now for Surplus Line Tax Changes and Enjoy Your Summer Vacation
View PDF

California Proposes to Disable Itself From Taxing 100% of Surplus Lines Premium

State Reformulations of NRRA Principal Place of Business Produce Bizarre Results: A California legislator has proposed a surplus lines bill — one effect of which will reduce California’s surplus lines premium tax revenues.

Posted in Uncategorized | Comments Off on California Proposes to Disable Itself From Taxing 100% of Surplus Lines Premium
Read more

Prepareth Not and Doom Your Summer Vacation

Initial NRRA Compliance and Related Issues: The Nonadmitted and Reinsurance Reform Act (NRRA), Subtitle B, Part I, Dodd-Frank Wall Street Reform and Consumer Protection Act, will usher in a new era of premium taxation and regulation for surplus lines insurance on July 21, 2011, a convenient Thursday shortly after the Fourth of July.

Posted in Uncategorized | Comments Off on Prepareth Not and Doom Your Summer Vacation
Read more

Much State Regulatory Ado About Little

Economic Fallacy of Multistate Taxation: As of July 21, 2011, the Nonadmitted and Reinsurance Reform Act (NRRA), also known as Subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, reshapes the landscape for state taxation of surplus lines insurance premium.

Posted in Uncategorized | Comments Off on Much State Regulatory Ado About Little
View PDF

Multi-State Surplus Lines Tax

The States Drop the Ball: The States appear poised, through inaction, to leave untold millions of dollars in premium tax revenue “on the table” when the Nonadmitted Insurance and Reinsurance Reform Act (NRRA) becomes the law of the land on July 21, 2011.

Posted in Uncategorized | Comments Off on Multi-State Surplus Lines Tax
View PDF