Kentucky becomes first state to enact SLIMPACT

FRANKFORT, Ky.—Kentucky on March 16 became the first state to enact a surplus lines insurance multistate compliance compact, or SLIMPACT.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, only the home state of a surplus lines insurance policyholder can collect premium taxes on that policy. Among other things, the law calls on states to work out a way to allocate taxes among themselves and promote uniformity in surplus lines regulation.

SLIMPACT would authorize a governing commission to establish allocation formulas to help states share premium tax dollars, uniform payment methods and reporting requirements for policyholders and surplus lines brokers, national eligibility standards, and a single policyholder notice to replace various forms used across the country.

The surplus lines provisions of Dodd-Frank take effect on July 21. Ohio enacted SLIMPACT legislation March 18, and legislation has passed both houses in New Mexico.

Ten states must enact legislation establishing a compact before the commission can be created.