NEWS RELEASE – FOR IMMEDIATE RELEASE
Contact: Brianne Mallaghan
Director of Communications
THE COUNCIL PRAISES SENATE PASSAGE OF SURPLUS LINES REFORM LEGISLATION
WASHINGTON, D.C., May 21, 2010 – The Council of Insurance Agents & Brokers praised the U.S. Senate today for passing the surplus lines provisions of the Nonadmitted and Reinsurance Reform Act (NRRA) as a part of the larger financial services regulatory reform bill, S. 3217, the “Restoring America’s Financial Stability Act.”
The NRRA provisions embody a major step toward insurance regulatory modernization by providing a uniform approach to regulating the commercial surplus lines market. They dictate that for multi-state surplus lines placements, the only state whose rules govern is the state in which the insurance is placed.
In recognizing the importance of this legislation, Council President Ken A. Crerar acknowledged the leadership of Banking Committee Chairman Chris Dodd, D-Conn, and the contributions of Sens. Richard Shelby, R-Ala., and Tim Johnson, D-S.D.
"We are very grateful to Chairman Dodd for his support for modernizing the surplus lines marketplace, and extend our thanks for his leadership on this issue," Crerar said. "We are also very grateful to Senators Shelby and Johnson for their work on the insurance title of the legislation and their support of the surplus lines provisions. These reforms provide a practical solution to longtime marketplace problems. The result will be lower costs to insurance consumers and greater access to affordable products."
"The passage of this legislation is the culmination of six years of hard work by The Council and its members," Crerar said. "The provisions have garnered the broadest stakeholder support of any insurance regulatory reform legislation before Congress, including the support of the National Association of Insurance Commissioners. We are very gratified that we are one step closer to enacting these sorely-needed reforms."
More than 25 percent of commercial insurance in the United States is placed in the surplus lines market, also known as the nonadmitted insurance marketplace. Replacing the existing complicated quilt of state regulations with a uniform approach under which the rules of the insureds' home state apply in the case of multistate placements is a tremendous advantage in providing Americans quality insurance products.
By freeing up access to capital, the bill enables increased access to surplus lines insurance in both coastal and non-coastal areas without any reduction in substantive scope of consumer protection. Without the reforms provided by the bill, access to capital is tight, the surplus lines marketplace is diminished, and corporate consumers that need insurance coverage to build their businesses and the economy are unable to do so.
"We thank all of the lawmakers who have supported this bill, and want to particularly thank Senator Evan Bayh of Indiana, who authored the original stand-alone surplus lines reform legislation with several co-sponsors, including Senator Bill Nelson of Florida." Crerar said.
The Council president also thanked the House authors of this legislation, Reps. Dennis Moore, D-Kan., and Scott Garrett, R-N.J., and the leadership of the House Financial Services Committee, Chairman Barney Frank, D-Mass., and ranking Member Spencer Bachus, R-Ala., for their support of these provisions.
The Council of Insurance Agents & Brokers is the premier association for the top national, regional and international commercial brokerage firms and agencies in the United States and around the world. Member firms have offices in more than 3,000 locations across 100 countries. Council members place more than $200 billion in commercial property/casualty and employee benefits premium worldwide. More than 16 percent of the membership is comprised of firms headquartered outside the United States. Founded in 1913, The Council is based in Washington, D.C.