Significant new business opportunities are opening up in the US for London Market companies as a result of legislative changes, the International Underwriting Association has stated.
Title V of the Dodd-Frank Act – also known as the Non-admitted and Reinsurance Reform Act 2010 (NRRA) – has now come into force.
It allows any IUA member company to write surplus lines business from any US state providing the firm appears on the NAIC (National Association of Insurance Commissioners) International Insurance Department list of eligible Surplus Lines Insurers.
Dave Matcham, chief executive of the IUA, said: “The IUA has 40 member companies and over half operate as a surplus lines carrier in the US. In the past a number of states have simply not been available to them as a result of strict eligibility requirements that severely limited market openings.
“Since the Dodd-Frank Act was passed there has been a sense of anticipation among London firms looking forward to the welcome harmonisation of regulation for surplus lines business.
“The removal of restrictive eligibility constraints will enable a more competitive market and a greater choice for domestic US clients.”
Another major advantage of the NRRA is that it simplifies and streamlines the system by which surplus lines broker remit insurance premium taxes payable on multi-state risks. It achieves this by requiring payments to be made only to the insured’s ‘home state’.
Dave Matcham explained: “The arrangements ushered in by the NRRA enable agents and brokers to file multi-state policies with a single agency rather than with each individual state involved.”
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