Federal Nonadmitted and Reinsurance Reform Act of 2010.
The Act was enacted in July 2010 as Title IX, subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203. Part I of the Nonadmitted and Reinsurance Reform Act (“NRRA”) establishes new federal rules regarding state taxation and regulation of insurance placed with nonadmitted insurers. This includes insurance placed through a surplus lines broker and insurance directly procured by an insured from an insurance company that does not have a certificate of authority in a relevant state to transact the business of insurance.
The News Flash discusses the provisions of NRRA as applicable to captive insurance companies, which generally place insurance directly rather than as an authorized surplus lines insurance company. Under the NRRA terminology, such insurance is “independently procured insurance.” With that in mind, the discussion will touch only briefly on the NRRA provisions applicable to surplus lines insurers and focus primarily on the provisions dealing with independently procured insurance.