Industry Issues | Surplus Lines Reform

NIMA Responds to Home State Tax Advocates for Surplus Lines

NIMA Inc. and its members issued a September 27, response to assertions made by certain national industry groups that Home State rule provides a more practical option for states taxing multi-state, surplus lines premium.

According to the press release, " NIMA, Inc. stands by the Clearinghouse and its benefits to member states who honor the full intent of the Non-admitted and Reinsurance Reform Act (NRRA) ."

Said Merle Scheiber, Chairman of NIMA, Inc. and South Dakota’s Director of Insurance: “Yes, it is a disproportionate and bureaucratic burden to have no standard system or approach. NIMA, Inc. membership, however, specifically addresses this concern by offering uniformity and ease in reporting and taxation of surplus lines, thus removing the bureaucratic burden and honoring the intent and spirit of the NRRA.”

Director Scheiber further added: “We cannot speak to this supposed cost and burden, because NIMA, Inc. critics have yet to supply a cost analysis or supporting data to illustrate the benefits of home-state taxation.”

To date, PCI has voiced no position on the burdens or benefits of NIMA tax sharing vs. 100% home state taxation, except for suggesting consideration that the tax rules related to premiums allocated to non-participating states be uniform. Further discussion will be held at the Committee's Annual Fall Meeting on November 14.