TALLAHASSEE, Fla. – The Florida Office of Insurance Regulation (Office) today announced that Florida has entered into a multi-agency Nonadmitted Insurance Multi-State Agreement (NIMA).
is authorized by the federal Dodd-Frank Wall Street Reform legislation that was passed last year and allows state authorities to work cooperatively to consolidate reporting and collect and allocate premium taxes for multi-state surplus lines insurance transactions. Surplus Lines insurance companies cover risks that are not insurable in the admitted or licensed insurance market.
"Florida and the other participating states are leading the nation in the modernization of the reporting process for surplus lines premium," remarked Florida Insurance Commissioner Kevin McCarty. "I would especially like to recognize the National Association of Insurance Commissioners for their leadership with the task force and in creating this new agreement."
Florida's principal participation was possible because of the collaborative efforts with the Department of Financial Services, the Surplus Lines Service Office, legislative staff and bill sponsors including Representative Hager, Chairman Richter, and Senator Fasano, and the Governor, who has already signed the enabling legislation.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted last year. It included a section known as the Nonadmitted and Reinsurance Reform Act of 2010, which in the absence of an agreement, prohibits states other than the “home state” of the insured from collecting premium tax on a surplus lines policy covering risks in more than one state. Without the agreement, Florida stood to lose an estimated $15 to $20 million per year in premium tax.
This new agreement provides for the creation of a Clearinghouse, which will collect premium taxes and distribute them efficiently to participating states in accordance with a formula set forth in the agreement. States that do not participate in such an agreement will not be allowed to collect taxes for business conducted in their state if the insured’s home state is located elsewhere.
Florida, Mississippi and Hawaii are the lead states in forming this agreement but other states are expected to join. The agreement was proposed by the Surplus Lines Implementation Task Force of the National Association of Insurance Commissioners for use by the participating states. The Office and Chief Financial Officer Atwater have entered into this agreement on behalf of Florida.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about the Office, please visit www.floir.com