Senate Bill 1112 provides an exemption from surplus lines law to federally recognized Indian tribes or members of federally recognized Indian tribes.  This bill was signed by the Governor and became effective August 3, 2018.


The Department of Consumer Affairs announced the re-adoption of emergency cannabis ‎regulations for the Bureau of Cannabis Control related to the industry’s activities in the state.  ‎The regulations continue to permit non-admitted companies to provide insurance required to ‎operate a cannabis distributor.  The regulations became effective on June 6, 2018.‎


House Bill 1011 provides for disclosure on all homeowner’s insurance policies that such policies ‎do not cover flood insurance.  Previous versions of the bill suggested purchasing insurance from ‎an admitted insurer or from the NFIP.  The amended bill encouraged homeowners to buy a ‎separate flood policy but does not endorse any particular source.  The bill took effect on ‎January 1, 2019.


Senate Bill 381 establishes standards to allow domestic ‎surplus lines insurance insurers (“DSLI’s”) in Georgia. ‎With the enactment of this bill, Georgia became the ‎sixteenth state to allow DSLI’s joining Arizona, ‎Arkansas, Connecticut, Delaware, Illinois, Louisiana, ‎Missouri, New Hampshire, New Jersey, North Carolina, ‎North Dakota, Texas, Virginia, Wisconsin and ‎Oklahoma.This bill took effect on July 1, 2018.


House Bill 1301 repeals all statutes related to the ‎Surplus Lines Insurance Multistate Compliance ‎Compact which never went into effect as an ‎insufficient number of states enacted the legislation. ‎The bill reduced the number and tax filing dates for ‎surplus lines brokers from two to one so that taxes will ‎be paid by February 1 of each year, eliminating the ‎previous additional requirement of August 1. The bill ‎was enacted on March 25, 2018 and took effect on ‎July 1, 2018.‎


House Bill 345 eliminated language authorizing the state ‎to join SLIMPACT and also incorporated certain types of ‎disability insurance within the definition of non-admitted ‎insurance including disability coverage: 1) with policy ‎limits in excess of those available from an admitted ‎insurer; 2) with participation limits; or 3) insuring ‎occupations for which coverage is not procurable through ‎an admitted insurer. The bill also allows licensed agents ‎with lines of authority in health and life to export the ‎disability insurance after a diligent effort to the surplus ‎lines market provided that the broker procuring the ‎surplus lines disability coverage maintains his or her agent ‎license with lines of authority for health and life. This ‎bill passed both houses and took effect on July 25, ‎‎2018.‎


House Bill 247 permits health and accident insurance to be ‎written on a surplus lines basis. The bill also requires a ‎disclosure notice on surplus lines health and accident policies ‎to the effect that there is no life and health guarantee fund ‎coverage for such policies and allows the Insurance ‎Commissioner to require filing of forms and rates but only ‎for health and accident insurance when necessary to comply ‎with federal laws or regulators. This bill passed and took ‎effect on January 1, 2019.‎


Senate Bill 743 established requirements for peer-to-peer ‎car sharing programs and allows surplus lines insurers to ‎provide required insurance. (A peer-to-peer car sharing ‎program is one in which individuals rent their cars to ‎others for short periods.) This bill became effective July ‎‎1, 2018.‎


Senate Bill 2238 eliminates multistate premium tax ‎allocation and instead has brokers calculate all premium ‎for which Massachusetts is the home state entirely at the ‎Massachusetts rate of 4%. This bill became effective on ‎August 10, 2018.


House Bill 223 transfers certain duties for premium tax ‎collection, including those related to surplus lines, from ‎the Superintendent of Insurance to the Taxation and ‎Revenue Department. The bill also includes various ‎technical changes related to taxation, eliminating required ‎broker allocation reports as well as state authority to join ‎a tax sharing compact. The bill was signed by the ‎Governor and takes effect on January 1, 2020.‎


House Bill 382 requires surplus lines brokers to keep ‎records of insurance contracts open for examination by ‎the Commissioner for a period of five years, extended ‎from three. The bill also makes technical changes related ‎to the implementation of the North Carolina Surplus ‎Lines Association. The Governor vetoed the bill on ‎June 25, 2018 but the legislature overrode the veto and ‎the bill became effective on June 28, 2018.‎


Assembly Bill 1042 Senate Bill 4987 amends the ‎definition of surplus lines insurance to allow ‎‎“international major medical insurance” as a form of ‎insurance that may be written in the non-admitted ‎market. International major medical insurance is defined ‎as “a temporary health insurance policy that covers the ‎expenses associated with illnesses or accidents that occur ‎while travelling or when temporarily residing outside of ‎the person’s home country.” This bill took effect on ‎May 15, 2018.‎


Senate Bill 1795 provides exemptions from rate and ‎form filing for admitted commercial lines insurance, ‎including boiler and machinery, environmental ‎impairment/ pollution liability, kidnap and ransom, ‎political risk or expropriation, employment practices ‎liability, media liability, and product liability. These ‎revisions did not eliminate diligent effort requirements for ‎placement in the non-admitted market. The bill took ‎effect on May 21, 2018.‎

House Bill 2094 eliminates the requirement that a retail ‎agent hold a surplus lines license when placing non-‎admitted coverage through a wholesale broker. This bill ‎took effect on March 16, 2018.‎


House Bill 39 eliminated a statutory requirement related ‎to allocating a multi-state surplus lines premium tax and ‎stamping fee and codifies a home state approach to ‎taxation, meaning that a surplus lines broker is not ‎required to allocate taxes among all states where there is ‎exposure but can simply submit the surplus lines tax ‎based 100% on Utah’s surplus lines tax rate. The bill also ‎modernizes carrier eligibility requirements consistent with ‎the NRRA. The bill took effect on May 8, 2018.‎


Surplus Lines Taxation

Since the Non-Admitted Insurance Multistate Agreement ‎‎(NIMA) officially ended its run-off ‎period on October 1, ‎‎2017, surplus lines taxes are now calculated at the home ‎state’s tax rate on ‎‎100% of the premium, and retained ‎‎100% by the home state, in 47 jurisdictions (45 states ‎plus ‎the District of Columbia and Puerto Rico). The only ‎jurisdictions that continue to require taxes ‎be submitted ‎with multistate allocations of risk are Florida, Hawaii, ‎Massachusetts, New ‎Hampshire and Vermont.‎

NAIC Cyber/Data Activity

On October 24, 2017, the NAIC passed the Insurance ‎Data Security Model Law. The model is intended to ‎assist states in establishing standards for data security ‎and investigation and notification of Insurance ‎Commissioners after an insurance-related cybersecurity ‎event. The NAIC is also considering the creation of a ‎Cybersecurity Insurance Institute to catalog and study ‎breach events, provide information on risk mitigation and ‎coordinate other cyber education initiatives among the ‎states.‎


National Association of Registered Agents and Brokers (NARAB)

NARAB in effect is a new federal agency that will ‎become operational as a clearinghouse once its board of ‎directors is in place. It will allow insurance producers ‎licensed in their home states to sell, solicit, or negotiate in ‎every other state in which they intend to do business, ‎provided the producers are licensed for those lines of ‎business in their home states and pay their home states’ ‎licensing fees. The 13 members of the board are ‎nominated by the President and subject to confirmation ‎by the Senate and are to be made up of eight state ‎insurance regulators and five industry members, three of ‎which will represent the property and casualty segment. ‎‎(Unfortunately, NARAB has not become operational ‎because a board of directors has not yet been established. ‎‎ However, reports indicate that the FIO and the White ‎House have begun efforts to review and nominate ‎candidates for the inaugural board.)‎

Private Flood Insurance and Reauthorization of the ‎NFIP

Since the National Flood Insurance Program (NFIP) originally expired on September 30, 2017 the NFIP has received 14 short-term reauthorizations.  The insurance and real estate industries are supportive of a long-term extension to the NFIP that includes the National Flood Insurance Program Reauthorization Act of 2019 (H.R. 3167), which addresses facilitating a more robust private flood insurance market. It is not yet known when or if the program will receive a long-term extension, but given the many states being impacted by flooding, it remains a top priority and a hot issue in Congress.‎

The Foreign Account Tax Compliance Act (FATCA)‎

H.R. 871 is pending and, if passed, would eliminate the ‎P&C industry’s requirement to report non-cash-value ‎premiums under FATCA. Since FATCA was passed, the ‎P&C industry has asked for relief from FATCA reporting ‎due to its unnecessary and burdensome application to the ‎insurance industry. Ultimately, FATCA is directed at ‎foreign financial institutions and financial intermediaries ‎and aims to prevent tax evasion by U.S. citizens, U.S. ‎residents and corporations through the use of offshore ‎accounts.‎

This legislation is noncontroversial and is not expected to ‎have any opposition; however, the issue with moving the ‎legislation will be a matter of priority with the Committees ‎of jurisdiction (House Ways & Means and Senate ‎Finance). ‎

TRIA Data Calls

In the terrorism risk insurance data call for 2018, both the ‎Federal Insurance Office (FIO) and the NAIC made ‎revisions to reporting of federal and state terrorism ‎insurance-related activities. For the first time, state ‎insurance regulators and the Treasury agreed to ‎consolidate the collection of related data, which allows ‎companies subject to both the federal and state data calls ‎to submit the same information to Treasury and the ‎states. (The International Insurers Department will ‎continue to issue a separate terrorism risk data call for ‎alien surplus lines insurers.)‎

Domestic Surplus Lines Insurance Companies ‎‎(DSLIs)‎

While a surplus lines carrier is generally not able to write ‎surplus lines insurance in its state of domicile, many ‎states are changing their laws to allow surplus lines ‎carriers to issue policies in their state of domicile as ‎Domestic Surplus Lines Insurers (DSLI), for which a ‎carrier would be approved or admitted in that state as a ‎DSLI.‎

In 2018, Georgia, North Carolina, and Virginia all ‎passed DSLI legislation. The Georgia and Virginia laws ‎became effective on July 1, and North Carolina’s on ‎June 28. With these new states, a total of 16 states ‎allow DSLI companies including: Arizona, Arkansas, ‎Connecticut, Delaware, Georgia, Illinois, Louisiana, ‎Missouri, New Hampshire, New Jersey, North Carolina, ‎North Dakota, Oklahoma, Texas, Virginia, and ‎Wisconsin.‎