The Non-admitted and Reinsurance Reform Act (NRRA) was passed as a part of the Financial Reform Bill H.R.4173 and signed into law by the President on July 22, 2010.
NRRA will take effect one year from the date the Financial Reform Bill was signed (July 22, 2010). All current state regulations should be followed until the Act takes effect.
The Major Features Are:
- Home states have exclusive authority. Only the home state of an insured may require any premium tax for non-admitted insurance. “Home state” is defined as the state in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence.
- Streamlined application for Commercial Purchasers. Surplus line brokers making surplus line insurance placements for “commercial purchasers” would be exempt from diligent search requirements.
- Uniform Standards for Surplus Lines Eligibility. A state may not impose eligibility criteria for surplus line insurers domiciled in the US except in conformance with the criteria the Act establishes in sections 5A(2) and 5C(2)(a) of the Non-admitted Insurance Model Act. It also calls for use of those insurers maintained on the Quarterly Listing of Alien Insurers published by the International Insurers Department of the NAIC.
- Allocation of Non-admitted Premium Taxes. The Act states: “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 described in subsection (a).”
NRRA will take effect one year from the date the Financial Reform Bill was signed (July 22, 2010). All current state regulations should be followed until the Act takes effect.
The insurance licensing information provided on this blog is not legal advice and the reader is advised to consult an attorney regarding application of this information in any particular situation.
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