2006 Legislation

Last Update: August 2006

California Legislature

AB 2125 (Juan Vargas, D-79)

AB 2125 (Vargas), a bill sponsored by the California Department of Insurance would, among other things, impose a 1% monthly interest charge on the late payment of surplus line premium taxes when a surplus line broker has obtained an extension of time to pay the taxes. The bill has passed the Assembly and is pending in the Senate Committee on Appropriations.

United States Congress

H.R. 5637 (Ginny Brown-Waite, R-FL)

H.R. 5637, "The Non-Admitted and Reinsurance Reform Act of2006", was introduced by Representative Ginny Brown-Waite (R-FL). The bill calls for a uniform 50-state system of surplus line premium tax allocation on multi-state policies, and single situs or home state regulation of surplus line transactions, participation in the national producer database, uniform standards for surplus line insurer eligibility, and streamlined regulation of commercial purchases. The bill also calls for uniformity in credit for reinsurance by prohibiting extraterritorial application of State laws and solvency regulation. The bill was referred to the House Committee on Financial Services and is expected to be reported out of Committee this year.

S. 2509 (John Sununu, R-NH)

S 2509, "The National Insurance Act of 2006," was introduced by Senator John Sununu (R-NH) and would create an office of National Insurance within the U.S. Treasury Department to oversee a parallel system of state and federal insurance regulation. The bill would also offer life and property/casualty insurers the choice of a federal rather than a state charter. The bill was referred to the Banking Committee where hearings were held July 11 and 18. The 290-page bill does not include language to address surplus line premium tax remittance and allocation or licensing concerns.