Mississippi House Bill HB391

Mississippi 2022 Regular Session

• Introduced: 1/5/22
• Refer: 1/5/22
• Failed: 2/1/22

Caption

Nonadmitted policy fee; extend repealer on.

Impact

The passage of HB 391 is significant as it affects how surplus lines insurance is managed in the state. By extending the repeal date on the nonadmitted policy fee, the bill reinforces the requirement that insurance producers collect this fee, aiming to ensure compliance with state regulations. The fee set at three percent (3%) is not classified as premium and thus does not incur premium taxes or commissions, reflecting a careful regulatory approach to protect state interests while facilitating insurance transactions.

Summary

House Bill 391 aims to amend Section 83-34-4 of the Mississippi Code of 1972 by extending the repeal date on the nonadmitted policy fee. This legislation pertains specifically to surplus lines insurance producers who place insurance through nonadmitted insurers, mandating that they collect and remit a nonadmitted policy fee from insured individuals. The bill clarifies that this fee applies to all insurance written under these circumstances, with specific exemptions for residential earthquake or flood risks not covered by the National Flood Insurance Program.

Contention

While the bill provides a structured mechanism for handling nonadmitted policies, there are implications regarding the financial responsibilities placed on both insurers and insured parties. Some stakeholders may argue about the fairness of the nonadmitted policy fee and its impact on individuals seeking insurance in high-risk areas. Furthermore, the stipulation that nonadmitted insurance producers be bound by statutory provisions creates a framework that may cause contention among those advocating for more lenient economic policies in the insurance sector.