State first to sign multi-state insurance agreement
JACKSON — With the joint signing of the Nonadmitted Insurance Multistate Agreement (NIMA), Mississippi, Florida and Hawaii are the first states to establish such an agreement prior to a June 15 deadline established by Congress.
“Had Mississippi not taken this action, we could have lost up to $16 million in premium tax revenue annually, which includes approximately $10 million dollars in fees which go directly to the wind pool,” Mississippi Insurance Commissioner Mike Chaney said.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in July 2010, incorporated the Nonadmitted and Reinsurance Reform Act (NRRA) for the purpose of making the regulation of the surplus lines insurance market more efficient and more uniform on a national basis. A surplus lines company is not a licensed company, but is eligible to write coverage in the state that is not available from a licensed insurer. This coverage is typically specialized property or liability coverage.
Under the provisions of the NRRA, only an insured’s “Home State” may require a premium tax payment for surplus lines insurance. In the case of multi-state policies, this could result in a loss of premium taxes for states other than the Home State.
Gov. Haley Barbour signed House Bill 785 in March 2011, allowing Mississippi to proceed and sign to create the agreement.
Source: Mississippi Department of Insurance
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