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SPRING 2011 NEWS EXCLUSIVELY FOR MEMBERS OF THE PSLA “The Consistency of Change” Insurance Commissioner to Address PSLA Annual Meeting New Surplus Lines Premium Tax Regulation Workshop to Highlight Conference Pennsylvania’s Acting Insurance Commissioner, Michael Consedine, will provide his personal views on the current developments in the state’s surplus lines and insurance industry when he speaks exclusively to members of the Pennsylvania Surplus Lines Association at the Annual Meeting, May 11-12, 2011. Given the upcoming July 21, 2011 deadline for implementation of the Non- Admitted and Reinsurance Reform Act, timing of the Meeting to prepare PSLA members for the Pennsylvania’s Acting changes ahead could not be more appropriate. Insurance Commissioner, Michael Consedine This year’s Annual Meeting theme is “The Consistency of Change,” and will highlight speakers, Meeting events for PSLA members are: workshops, educational events and networking • A workshop and panel forum on the new opportunities. “Our 2011 Annual Meeting will surplus lines premium reporting and payment serve as a vitally important opportunity for PSLA requirements; members and their colleagues to be informed of • Two continuing education classes: This is an important and an essential time environmental liabilities, and nanotechnology / for us to inform PSLA members on the new hazardous products, will provide an update on regulatory requirements and to answer these unique risk exposures; and everyone’s questions. The rules are changing • Two keynote speakers will provide ideas and we need to be prepared as we write on how to embrace change and profit from surplus lines risks in the months and years incorporating new principles into agency or ahead. company operations by differentiating PSLA members from the competition. See page 10 of this newslettter to register The annual golf outing on the Bedford Springs for the 2011 Annual Meeting. Old Course and receptions during the meeting will also enable PSLA members to foster relationships and further discuss market changes and prepare for the changes and developments and dynamics. The Annual Business Meeting that lie ahead, and to incorporate new ideas will also provide further information on the and processes into their operations”, said PSLA PSLA’s activities during the past year and plans Executive Director Ken Rudert. The Meeting takes for the year ahead. “This is an important and an place Wednesday May 11th to Thursday, May 12th essential time for us to inform PSLA members on at the Omni Bedford Springs Resort in Bedford the new regulatory requirements and to answer Springs, PA. Information and registration materials everyone’s questions. The rules are changing and about the meeting can obtained by clicking here. we need to be prepared as we write surplus lines risks in the months and years ahead,” Mr. Rudert In addition to the address by the Acting Insurance added. Commissioner, included in this year’s Annual PSLA NEWS 180 SHEREE BOULEVARD, SUITE 3100 | EXT ON, PA 19341 | 610-594-1340 | WWW.PASLA.ORG NEWS EXCLUSIVELY FOR MEMBERS OF THE PSLA PSLA Issues Revised Bulletin on Changes to the Filing of Multi-State Risks The PSLA issued an November 30, 2010 Bulletin, on the Nonadmitted and Reinsurance Reform Act (NRRA), which was signed into Law on July 21, 2010. Its provisions become effective on July 21, 2011. In the meantime, current Pennsylvania Laws and Regulations and their affect on the filing process remain. A revised Bulletin was issued April 18, 2011. One of the provisions within the NRRA is “No State other than the home State of an • A Workshop on insured may require any premium tax payment for nonadmitted insurance.” During this the status of the interim period, the Pennsylvania Insurance Department is requiring three fields to be NRRA’s adoption and added to the end of the affidavit filing form in the Electronic Filing System (EFS). This implementation on additional information relating to Multi-state risks will enable the Department Pennsylvania risks, will be to respond effectively to the many unknown factors to be contemplated. held as part of the PSLA’s The following fields will be available in EFS starting December 1, 2010. Annual Meeting at Multi-state Risk the Omni Bedford Does the policy cover risks in the Commonwealth of Pennsylvania Springs Resort on plus one or more other state or territory (yes or no). • Note: If a filing May 12, 2011 - see has been made related story on Home State with incorrect multi-state page 1 of this (A) IN GENERAL – Except as provided in subparagraph (B), the information since Newsletter. term ‘‘home state’’ means, with respect to an insured - December 1, 2010, (i) The State in which an insured maintains its principal place of please revise the filing as soon as possible. business or, in the case of an individual, the individual’s principal residence; or (ii) If 100 percent of the insured risk is located out of the State referred to in clause (i), the State to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated. (B) AFFILIATED GROUPS – If more than 1 insured from an affiliated group are named insureds on a single non-admitted insurance contract, the term ‘‘home state’’ means the home State, as determined pursuant to subparagraph (A), of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract. Click on the EFS helptext link or refer to the Procedures and Electronic Filing User Manual for additional information on Multi- state risks. Total Multi-state Policy Premium Multi-state Policy Premium is the total premium for a policy that covers risks in the Commonwealth of Pennsylvania plus one or more other state or territory. At this time the fields only collect information and there is no impact to surplus lines tax or stamping fee, however your assistance in collecting this information is requested. 2 PSLA NEWS NEWS EXCLUSIVELY FOR MEMBERS OF THE PSLA Surplus Lines Premium Tax Reforms Take Effect July 21, 2011 Pennsylvania surplus lines insurance writers Association of Insurance Commissioner’s State Compliance Compact” (SLIMPACT). will have to amend their operational practices (NAIC) Non-Admitted Insurance Multistate Thereafter, a scaled down version of the starting July 21, 2011 when the provisions of Agreement (NIMA). interstate compact was drafted and adopted the Non-Admitted and Reinsurance Reform by the National Council of Insurance Act (NRRA) take effect. Intended to bring The NRRA provides, among other things, Legislators; American Association of efficiency and uniformity to surplus lines that surplus lines premium taxes on multi- Managing General Agents; Council of State premium payments on multistate risks, the state risks will be paid to the Home State of Governments; and the National Conference NRRA was incorporated into the Dodd- the insured, as opposed to the surplus lines of State Legislators. Frank Wall Street Reform and Consumer agent/broker determining the amount of risk Protection Act (Public Law 111-203, H.R. 4173), residing in each of the states and allocating a At the present time, SLIMPACT-Lite has been and passed in both Houses of Congress and proportionate percentage of the risk in each signed into law on July 21, 2010. As part of of those states and then calculating and the legislation, Congress gave the states a paying the appropriate surplus lines premium A Workshop on how to comply with the mandate: bring surplus lines premium tax tax in each state. The intent of Congress, as new surplus lines law will be presented collection and payments into a uniform and set forth in §101(b)(4) is for a nationwide as part of the PSLA Annual Meeting, on consistent framework. system to be developed whereby “each State Thursday, May 12th, 2011 at the Omni [to] adopt nationwide uniform requirements, Bedford Springs Resort in Bedford To date, the PA Legislature has not introduced forms, and procedures, such as an interstate Springs, PA. a formal bill to implement the provisions of compact, that provides for the reporting, the NRRA in the Commonwealth. However, payment, collection, and allocation of draft legislation is making its way through premium taxes for nonadmitted insurance mark-up in the Committees. The current consistent with this section.” signed into law by the Governor of Kentucky, proposal follows what the legislatures in and awaits the Governors’ signature in New New York and California have done: follow Since that time, both industry and Mexico and Ohio. It has also passed at the federal law by having all premium taxes the National Association of Insurance least one chamber of the state legislatures on surplus lines multi-state risks paid to the Commissioners have adopted proposals to in Alabama, Connecticut, Iowa, New York, Home State of the insured. The measure implement the new law by the July 21, 2011 Rhode Island, Tennessee, Texas and Vermont. also presently delegates authority to the deadline established by Congress. Surplus PA Department of Revenue to determine, Lines practitioners and insurance industry PSLA will keep members advised of further at a later time, whether to enter into an groups worked together to draft and developments as they materialize. interstate compact or adopt the National advance the “Surplus Lines Insurance Multi- Election for PSLA Board of Governors Underway Balloting is currently underway by members of the PSLA to select its Board of Governors for an upcoming three (3) year term. Ballots were sent to all members eligible to vote on April 06, 2011. Pursuant to Section 3.04.2 of the Bylaws of the Pennsylvania Surplus Lines Association, the Nominating Committee submitted the following slate of candidates: Irene Barbera Judith Klingerman Edwin Rice W. N. Tuscano Agency, Inc. Partners Specialty Group, LLC Insurance Consultant 950 Highland Avenue 100 Tournament Drive, Suite 214 603 South Bedford Street Greensburg, PA 15601 Horsham, PA 19044 Carlisle, PA 17013 Gerald Henner Dennis Lewandowski Anthony Saltzman Edgehill Special Risk Wagner Agency, Inc.

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