Preface: States’ Implementation Of NRRA In 2014:
The Nonadmitted and Reinsurance Reform Act (“NRRA”) came into effect on July 21, 2011 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The purpose of the NRRA was to create a more simplified and efficient surplus lines tax payment and regulatory systemby limiting regulatory authority of surplus lines transactions to the home state of the insured and by establishing federal standards for the collection of surplus lines premium taxes, insurer eligibility, and commercial purchaser exemptions.
Thus far, all states, except Michigan and Washington DC, have enacted legislation to implement the NRRA. These state laws focus on surplus lines premium taxation, which is themost challenging compliance issue for both brokers and state regulators. In addition to the tax issue, most of the states have attempted to conform their laws to the other issues addressed by the NRRA, including the exempt commercial purchaser exemption and surplus lines insurer eligibility standards. However, even if a state has not taken appropriate action, the NRRA standards still apply. Therefore, surplus lines brokersmust look to both the NRRA and the laws of the home state of the insured to determine what they need to do to comply with all applicable rules under NRRA.
What follows is a summary of the key provisions of the NRRA that will affect the current regulation of surplus lines insurance in the United States.
Please see full publication below for more information.