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Brady R. Kelley is the executive director of the Kansas City, Missouri-based National Association of Professional Surplus Lines Offices Ltd., where he is responsible for the overall management of the association's staff activities, services to members and business operations. He started with NAPSLO in September 2011 as executive director. Prior to joining NAPSLO, Mr. Kelley spent 13 years with the Kansas City-based National Association of Insurance Commissioners, most recently as its chief financial and business strategy officer responsible for financial management and reporting, business strategy, risk management and compliance activities. He recently spoke with Business Insurance Senior Editor Judy Greenwald about NAPSLO's challenges, outlook and legislative priorities. Edited excerpts follow.
Q: What challenges and opportunities face the excess and surplus lines market in the coming year?
A: The annual A.M. Best Co. review of the surplus lines industry continues to demonstrate opportunity in the market's financial strength and stability. That report demonstrates the market's success in developing new and innovative solutions to emerging complex risks. That commitment to innovation creates opportunity for our industry.
Second, I would say adapting to changes in surplus lines legislation and regulation across the country also can be a challenge. As an example, the Terrorism Risk Insurance Act is set to expire at the end of 2014, but the timing and substance of its renewal is still somewhat unclear.
We are hopeful that reauthorization legislation, which is approved now in both the Senate and House committees, will move quickly through Congress. We've been saying for some time the reauthorization would happen sooner rather than later. This is our best hope that some reauthorization will happen quickly.
Q: How does NAPSLO help its members recruit and train new talent for the surplus lines industry?
A: We have our career awareness and internship committee, and that committee supports a number of initiatives to attract and retain new talent to NAPSLO member companies. NAPSLO and its member firms host an average of 15 students in an internship program that exposes students to a variety of roles within the surplus lines industry.
What makes that program great is that interns work with both insurance company and wholesale broker members and gain hands-on experience in all facets of the surplus lines business.
We are also working very hard to raise the level of awareness on university campuses about careers in our industry, and that works best when we connect a NAPSLO member to share their experience in a college classroom. We've made 17 of these presentations in 2014 alone, reaching more than a thousand students.
Q: What legislative issues are on the horizon for the industry?
A: A key priority has been the uniform implementation of the Nonadmitted and Reinsurance Reform Act. The NRRA created a national framework for uniformity and efficiency in surplus lines regulation and taxation, and we continue our work to insure the NRRA establishment of home-state regulation and taxation truly streamlines compliance in these areas for our industry.
We are also focused on reformation of the National Flood Insurance Program and promoting private-market solutions to flood insurance. There are two bills that will amend the definition of private flood insurance and clarify the eligibility of surplus lines insurers to provide these solutions.