NEW YORK CLARIFIES NEWLY EFFECTIVE DODD-FRANK REINSURANCE PROVISIONS
The New York Insurance Department issued Circular Letter No. 9 on July 22, 2011, which provides “guidance and clarification” on the impact of the Nonadmitted and Reinsurance Reform Act of 2010 (“NRRA”) (passed as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act) on surplus line placements in the state. The letter cites to and discusses the various New York state insurance and tax laws which were amended to conform to the NRRA. New York is one of the states which has declined to enter into a surplus insurance premium tax compact, keeping 100% of the tax it collects. The letter clarifies eligibility requirements for non-admitted insurers under NAIC’s Nonadmitted Insurance Model Act, which was codified under New York law; it clarifies exemptions for “exempt commercial purchasers” from satisfying due diligence requirements concerning placement with admitted insurers; and it discusses the “home state” law governing the exclusive regulation of non-admitted insurers by the insurer’s “home state” only. The letter also addresses licensing and taxation issues. Certain of the New York laws, and the NRRA, became effective on July 21, 2011.
This post written by John Pitblado.
