The Non-admitted and Reinsurance Reform Act (NRRA) was created to make multistate surplus lines transactions and tax payments more uniform, efficient and streamlined for consumers, businesses and surplus lines brokers.
The NRRA mandates the insured’s home state be the only state with jurisdiction over multistate surplus lines transactions and the only state that can require a tax to be paid by the broker.
The NRRA expects the states to implement a compact creating a clearinghouse for the efficient transfer of premium taxes paid to the home state, but owed to other states based on the risk and exposures in those other states. However, 10 states have adopted NIMA, 9 states have adopted SLIMPACT and some states do not require that taxes be shared at all.
State interpretation and implementation of the NRRA is inconsistent. While 45 states and Puerto Rico have either enacted legislation or published rules bringing their state laws into compliance with the NRRA, the laws are not uniform.
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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