An Act Adopting The National Conference Of Insurance Legislators' Surplus Lines Insurance Multistate Compliance Compact.
Impact
By adopting this compact, states will experience a shift in how they manage premium taxes on nonadmitted insurance. Specifically, the bill mandates that only the insured's home state can levy premium taxes, thereby preventing multiple states from imposing taxes on the same insurance transaction. This change is expected to safeguard state revenues while enhancing clarity for insurers. The framework also allows for a uniform tax allocation system, which states must adopt to comply with the compact, ensuring that premium taxes are efficiently collected and distributed.
Summary
House Bill HB06363 proposes the adoption of the National Conference of Insurance Legislators' Surplus Lines Insurance Multistate Compliance Compact. The purpose of this compact is to streamline and enhance the regulatory framework for surplus lines insurance, particularly in situations involving multistate risks. The bill's aim is to provide a consistent framework that allows states to simplify their regulations and improve efficiency for the insurance market, ultimately benefiting consumers by ensuring continued access to nonadmitted insurance products.
Contention
However, the bill has faced some dissent regarding its implications for local regulatory authority. Critics argue that centralizing insurance regulation could undermine state-level decision-making and diminish local oversight of insurance practices tailored to specific community needs. Furthermore, concerns have been raised about whether the compact could lead to reduced scrutiny of insurance companies that operate across multiple states, potentially allowing for lapses in consumer protections. Proponents, however, assert that the compact enhances regulatory coherence and reduces unnecessary bureaucratic complexity.
An Act Concerning Insurance Market Conduct And Insurance Licensing, The Insurance Department's Technical Corrections And Other Revisions To The Insurance Statutes And Captive Insurance.