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Member, Beacon International Group, Ltd.
We hope the Senate quickly follows the lead of the House of Representatives and passes the Nonadmitted and Reinsurance Reform Act of 2007.
The measure would streamline the regulation and taxation of surplus lines insurers and cut through a lot of red tape that has hampered an important market sector.
More importantly, the measure would allow brokers representing large policyholders to go directly to the non-admitted market without having to first submit the risk to admitted insurers. This aspect of the bill is a welcome acknowledgement that those involved in buying commercial coverage usually are well aware of the realities of the marketplace, and making them go through the charade of seeking quotes they know won't materialize is just a waste of everybody's time.
In addition, the most recent version of the legislation takes a more practical approach in defining a "qualified risk manager," who would be allowed to go directly to the surplus lines market. Earlier versions included unduly rigorous academic requirements. You really don't need a chain of letters after your name to know when the admitted market is not going to meet your needs.
The only question that now remains is whether the Senate will take up the bill and approve this common-sense proposal. Last year, the House passed a similar bill, but it generated little interest in the other chamber. We hope lawmakers will now consider a measure that should be welcomed by just about everyone in the commercial insurance placement process.