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passage in the house, it may well become the source of Senate hearings. Efforts are underway
to attach the nrrA to any insurance reform legislation passed by the US Senate so as to bring
this needed reform to the market.
The states have also taken a greater interest in E&S matters over the past 12 months. These
include new Jersey and Montana, where the state legislature has decided to assume the
surplus lines premium fees and circumvent the efforts of the respective stamping offices or
other mechanisms in place. California courts are currently engaged in a lawsuit challenging
the interpretation of a state statute pertaining to what may constitute an E&S insurer “doing
business” in the state, thereby requiring additional taxes to be paid.
The Supreme Court in Florida also interpreted that state’s long-standing statutes precluding
surplus lines forms from having to be filed, thereby dramatically requiring a procedural mandate
even the Office of Insurance regulation wasn’t able to implement. Efforts by a coalition of
“ Whatever happens, the
E&S industry groups and organisations worked to have the state legislature reverse the court’s
ruling. governor Charlie Crist signed hb 853 into law, placing the procedural requirements
market will have its work
back to the way the legislature had originally intended.
cut out for it, by realising
These developments point to several realities the market must now face.
that the old days of laissez-
• Education and advocacy of state and federal legislators must be increased on the workings,
faire and darwinian
requirements and modernisation of the E&S market. There is no need to envelope E&S into
the broader systemic risk or financial services and products and life insurance regulatory
capitalism are no longer
matters that regulators are seeking to implement
going to be accepted.”
• To sustain its positive growth and reputation, E&S professionals must remain vigilant in
monitoring new bills and regulations offered in the states and by Capitol hill seeking to
undermine freedom of rate and form, and the ability of the niche market to serve those
who require other benefits and services unattainable from the admitted market
• Where the market is threatened, prompt, reliable and substantiated responses must be made
to ensure the professionalism and integrity of the marketplace is able to continue.
There will, undoubtedly, be other regulatory issues raised once the other economic,
jobs and housing issues are resolved. but whatever happens, the market will have its
work cut out for it, by realising that the old days of laissez-faire and darwinian capitalism
are no longer going to be accepted. Markets work, and they must be allowed to work,
but they will need the direction of government to be resurrected from the devastating
consequences of greed and unaccountability that put us in the current circumstances.
There are no limits to the advantages and innovative products and services that insurance
professionals can provide to their customers, so long as we do not put limits on the
very people who work hard to afford protection to the risks, homes and businesses that
comprise our business.
regulatory mandates, oversight and compliance are not only the government’s prerogative;
they are also our opportunity to ensure that our regulators and elected officials do not constrain
the entrepreneurial spirit we have earned and worked hard to protect, so as to enjoy the fruits
of our properly and honourably secured labours.
Curtis Anderson is president of the American Association of Managing General Agents and
president of the binding and programs division at Risk Placement Services, Inc. He can be contacted at:
September 2009 | INTELLIGENT INSURER | 51
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