DE SB109 | 2011-2012 | 146th General Assembly
Status
Completed Legislative Action
Spectrum: Partisan Bill (Democrat 3-0)
Status: Passed on August 16 2011 - 100% progression
Action: 2011-08-16 - Signed by Governor
Text: Latest bill text (Engrossed) [HTML]
Spectrum: Partisan Bill (Democrat 3-0)
Status: Passed on August 16 2011 - 100% progression
Action: 2011-08-16 - Signed by Governor
Text: Latest bill text (Engrossed) [HTML]
Summary
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. Contained in its entirety within this legislation was the Nonadmitted and Reinsurance Reform Act of 2010, referred to as the NRRA. The NRRA places surplus lines taxation, regulatory and licensing authority under the exclusive oversight of the home state of the insured, so that multi-state policies would have premiums taxed in just one state. Along with certain other regulatory requirements for nonadmitted insurance, the NRRA compels the establishment of nationwide uniform requirements, forms, and procedures, such as an interstate compact or agreement, that provide for the reporting, payment, collection, and allocation of premium taxes among the states. The States have 330 days from the date of enactment of the NRRA to adopt and implement the compact or otherwise establish allocation procedures. This bill describes the requirements of the NRRA and amends Chapter 19 of Title 18, Delaware’s current surplus lines law, to bring the Delaware Code into compliance with those requirements. Section 1 of the bill creates Subchapter I pertaining to findings regarding the implementation of the NRRA, establishment of single-state regulatory and taxing authority, authorization for participation in an interstate cooperative compact or agreement related to regulation of nonadmitted insurance and the collection, allocation, and distribution of premium tax; establishment of a committee to study the fiscal impact of entering into an interstate agreement; adoption of definitions found in the NRRA; and the exclusion of certain lines of business from the provisions of the chapter. Section 2 of the bill creates Subchapter II pertaining to placement and regulation of surplus lines insurance through licensed surplus lines brokers or by insureds who independently procure coverage; conditions for export of coverage; authorization for the Insurance Commissioner to set diligent search requirements; certain procedural requirements for surplus lines brokers; definition and provisions for streamlined application for certain commercial insureds; endorsement of contract and required disclosure statement ensuring that the insured is aware that the surplus lines policy is placed with a company not under the jurisdiction of the Insurance Department and no guaranty fund coverage is available; allowance for delayed surplus lines licensing if Delaware is the home state of the insured; mandated use of the NAIC national producer database for licensing; and certain records and reports required from surplus lines brokers. Section 3 amends sections of Chapter 19 pertaining to surplus lines premium tax to provide that 100% of the premium for all policies written on home state insureds, whether single-state or multi-state, is considered Delaware premium for tax purposes; provide for the payment of premium tax on independently procured nonadmitted insurance; and provide for penalties for noncompliance with tax filing requirements. Section 4 creates Subchapter III pertaining to the eligibility and regulation of nonadmitted insurers as specified in the NRRA including clarification that surplus lines insurance is exempt from rate and form approval and stating criteria for withdrawal of eligibility. Section 4 also adds a section creating the company type of Delaware domestic surplus lines insurers that are admitted insurers permitted to write surplus lines policies on Delaware risks if they are sufficiently solvent, their board of directors allows it, and the Insurance Commissioner approves. Section 5 creates Subchapter IV providing for miscellaneous material such as applicability, alteration, and repeal of this law; renaming the law; providing for penalties; and declaring urgency of enactment due to the 330 day requirement in the NRRA.
Title
An Act To Amend Chapter 19 Of Title 18 Of The Delaware Code Relating To Regulation Of Surplus Lines Insurance.
Sponsors
Roll Calls
2011-06-29 - House - House Third Reading (Y: 41 N: 0 NV: 0 Abs: 0) [PASS]
2011-06-09 - Senate - Senate Third Reading (Y: 16 N: 3 NV: 1 Abs: 1) [PASS]
2011-06-09 - Senate - Senate Third Reading (Y: 16 N: 3 NV: 1 Abs: 1) [PASS]
History
| Date | Chamber | Action |
|---|---|---|
| 2011-08-16 | Signed by Governor | |
| 2011-06-29 | Passed by House of Representatives. Votes: Passed 41 YES 0 NO 0 NOT VOTING 0 ABSENT 0 VACANT | |
| 2011-06-22 | Reported Out of Committee (ECONOMIC DEVELOPMENT/BANKING/INSURANCE/COMMERCE) in House with 7 On Its Merits | |
| 2011-06-14 | Introduced and Assigned to Economic Development/Banking/Insurance/Commerce Committee in House | |
| 2011-06-09 | Passed by Senate. Votes: Passed 16 YES 3 NO 1 NOT VOTING 1 ABSENT 0 VACANT | |
| 2011-06-09 | Amendment SA 1 - Passed by Senate. Votes: Passed 20 YES 0 NO 0 NOT VOTING 1 ABSENT 0 VACANT | |
| 2011-06-09 | Amendment SA 1 - Introduced in Senate | |
| 2011-06-08 | Reported Out of Committee (INSURANCE) in Senate with 5 On Its Merits | |
| 2011-06-07 | Assigned to Insurance Committee in Senate |
