[Congressional Record Volume 156, Number 166 (Wednesday, December 15, 2010)]
[Extensions of Remarks]
[Pages E2144-E2145]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 H.R. 4173, THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION 
    ACT--CLARIFICATION OF INTENT WITH RESPECT TO TITLE V, SUBTITLE B

                                 ______
                                 

                           HON. DENNIS MOORE

                               of kansas

                    in the house of representatives

                      Wednesday, December 15, 2010

  Mr. MOORE of Kansas. Madam Speaker, as a House conferee for H.R. 
4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(``Dodd-Frank Act''), and the chief sponsor of the Nonadmitted and 
Reinsurance Reform Act (NRRA) that was included as Title V, Subtitle B 
of the Dodd-Frank Act, I rise to reaffirm these important provisions. 
The President signed the Dodd-Frank Act into law earlier this year 
(P.L. 111-203).
  The NRRA seeks to address an issue that most people have never heard 
of. But it is an issue that we in this House have successfully 
addressed a number of times in the past few years, and one that affects 
the lives of millions of Americans, individuals and businesses large 
and small.
  Non-admitted insurance, or surplus lines, is specialty insurance you 
cannot purchase in the traditional, admitted market. Often called the 
``safety net'' of the insurance market, surplus lines provides for 
coverage when the traditional market is not available. This is 
insurance for satellites, toxic chemicals, new inventions, or insurance 
on homes and businesses in a scarce market.
  With my distinguished colleague from New Jersey, Mr. Garrett, I 
sponsored the Nonadmitted and Reinsurance Reform Act to fix the 
fragmented, cumbersome regulation of this important marketplace. The 
goal of the NRRA was not to eliminate regulatory protections, but to 
streamline the regulatory regime to enable insurers and brokers to more 
easily and efficiently comply with state rules and provide much-needed 
insurance protections to consumers. The law accomplishes this by giving 
sole regulatory authority over a surplus lines transaction--including 
the authority to collect premium taxes--to the home state of the 
insured.
  The NRRA passed the House four times--three times as a stand-alone 
measure and, finally, as part of the Dodd-Frank Act. With the law's 
enactment, the responsibility for implementation moves to the states. 
I'm told that the National Association of Insurance Commissioners 
(NAIC) is moving swiftly to draft a model agreement and statutory 
language to enable the states to collect and share surplus lines 
premium taxes. This sounds like a promising start, but only if the 
agreement and authorizing legislation are in keeping with the letter 
and spirit of the NRRA: to provide a simpler, uniform tax reporting and 
payment process with a single payment, to the insured's home state, for 
each transaction.
  Premium tax simplification, while important, is but one part of the 
NRRA's goals. The broader intent of the law is to provide a 
comprehensive, uniform solution to the current regulatory mess by 
addressing the full spectrum of surplus lines regulation: declination 
and reporting requirements, broker licensing requirements and 
electronic processing, insurer eligibility standards, and treatment of 
sophisticated commercial purchasers. Most of

[[Page E2145]]

the provisions of the law will become effective next July without state 
action--as I mentioned, the rules of the insured's home state govern 
multi-state transactions and the insurer eligibility requirements and 
sophisticated commercial purchaser standards are set forth in the 
federal law.
  Having said that, however, in order to truly realize the promise of 
the new law, the states need to take this opportunity to adopt a single 
set of uniform surplus lines regulatory requirements--requirements that 
are not just similar but the same in every state. I have no stake in 
how this is accomplished--by individual state laws based on NAIC or 
NCOIL models, through a standard-setting compact (which is authorized 
under the NRRA), or in some other manner. But it can and should be 
done--and the states should realize that now is the time to do it.
  I urge the Congress to continue closely monitoring the full 
implementation of these important provisions.

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