Industry Issues | Surplus Lines Reform

Mississippi DOI Issues Letter Regarding Reconciliation of Nonadmitted Premium

State Regulatory Update - Mississippi

The Mississippi Department of Insurance (MID) has issued a letter (attached) to its list of eligible surplus lines insurers requesting an annual report of information on 2017 nonadmitted insurance written on policies where Mississippi is the home state of the insured. 

The requested data includes: Policy Number; Insured Name; Premium; Policy Effective Date and Expiration Date; Transaction Effective Date; and, Name of the entity that is responsible for the tax filing (licensee). The MID and the Mississippi Surplus Lines Association will reconcile the reported premiums written with the premiums reported by Mississippi licensed surplus lines insurance producers.

Insurers are to use the MSLA's Surplus Lines Information Portal (SLIP) to submit policy data. See www.msla.org

Of note, foreign insurers are requested to forward a copy of the 2017 Schedule T to the MSLA for purposes of confirming the SLIP filings.

The deadline for policy submission is March 15, for foreign insurers, and June 1, for alien insurers.



Mississippi DOI Issues Bulletins on Nonadmitted Policy Fee

The Mississippi Insurance Department has issued Bulletin 2012-3 to notify the industry of the state's intention to withdraw from the Nonadmitted Insurance Multi-State Agreement (NIMA), effective June 18. As a result, surplus lines brokers will be required to adhere to the 100 percent home state taxation approach set forth in the bulletin.

Additionally, the MID issued Bulletin 2012-2 to provide instructions to surplus lines brokers on how to collect and remit the 3 percent nonadmitted policy fee to the Mississippi Windstorm Underwriting Association. The fee was reduced from 5 percent to 3 percent pursuant to Senate Bill 2626, effective July 1, 2012.


Mississippi Enacts Surplus Lines Reform

Mississippi enacted House Bill 785 which brings the surplus lines insurance statutes into conformity with the federal Nonadmitted and Reinsurance Reform Act of 2010. The law became effective immediately upon passage on March 11, 2011.

In response to passage of HB 785, the Mississippi Department of Insurance issued Bulletin 2011-1 to highlight the changes for surplus lines insurers and insurance producers.

New section 83-21-18 authorizes the insurance commissioner to enter into an agreement, or compact, with other states to establish procedures for allocating premium taxes. According to the MDI Bulletin, the Department will work closely with the NAIC to finalize the details of a compact or agreement which would allow participating states to collect and allocate premium taxes and fees through a central clearinghouse where a multi-state risk is involved. PCI will monitor this closely to ensure that such an agreement will not impose new or additional reporting requirements on insurance companies.

Bill Summary:

Section 1 of H-785 amends Section 83-21-17 of the Mississippi Code of 1972 by revising the eligibility requirements of nonadmitted insurers to write business in Mississippi.

Section 2 enacts new Section 83-21-18 which authorizes the insurance commissioner to enter into an agreement, or compact, with other states to establish procedures for allocating premium taxes. The provisions set forth in Sections 83-21-19 through 83-21-27 shall only apply if Mississippi is the home state.

Section 3 amends Section 83-21-19 by revising the licensing provisions for resident and nonresident surplus lines insurance producers.

Section 4 amends Section 83-21-21 to provide that stamping procedures may apply to the reporting, payment, collection, and allocation of premium taxes for nonadmitted insurance consistent with any agreement, compact or procedures entered into by the insurance commissioner.

Section 5 amends Section 83-21-23 to provide that, when placing nonadmitted insurance for an exempt commercial purchaser, a surplus lines insurance producer is not required to make a due diligence search to determine whether the full amount or type of insurance can be obtained from admitted insurers.

Section 6 makes nonsubstantive technical amendments to Sections 83-21-25, 83-21-27, and 83-21-29.

Section 7 amends Section 83-34-4 to provide that each insured in this state who directly procures or renews insurance with a nonadmitted insurer on properties, risks or exposures located in this state, other than insurance procured through a surplus lines licensee, shall be subject to the nonadmitted policy fee which shall be paid pursuant to the procedures provided for premium taxes.


Mississippi Introduces House Bill 785, Surplus Lines

Mississippi Rep. Walter L. Robinson, Jr. (D) has introduced House Bill 785 an act to amend the provisions of laws regarding the business of nonadmitted insurance in conformance with the NRRA. Rep. Robinson is the current Chair of the House Committee on Insurance.

Section 2 provides for delegated authority to the insurance commissioner:

SECTION 2. The following shall be codified as Section 83-21-18, Mississippi Code of 1972: 83-21-18. (1) The Commissioner of Insurance may enter into an agreement, compact, or otherwise establish procedures to allocate among the states the premium taxes paid to an insured's home state according to the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), which was incorporated intact into the Dodd-Frank Financial Reform Bill, H.R. 4173, which provides that only an insured's "home state" may require a premium tax payment for nonadmitted insurance, and that the placement of all nonadmitted insurance shall be subject solely to the statutory and regulatory requirements imposed by the insured's "home state." (a) The agreement, compact, or procedures may provide for the adoption of nationwide uniform requirements, forms and procedures which provide for the reporting, payment, collection and allocation of premium taxes for nonadmitted insurance consistent with the NRRA.