AAMGA Special Section

Government Affairs Committee makes its mark

MGAs are well-represented on state and national levels

By Phil Zinkewicz

For the past few years, the AAMGA Government Affairs Committee has put high on its list of endeavors the passage of the Nonadmitted and Reinsurance Reform Act. Among other things, the bill would streamline the regulation of surplus lines insurance and reinsurance by creating a uniform system of premium tax allocation and remittance, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated purchasers. Last year, the bill passed in the House, but it became bogged down in the Senate.

Kurt Bingeman of the Boca Raton, Florida-based Russell Bond & Co. and co-chair of the committee, says that the AAMGA will work diligently again this year for passage of the proposed law. Simply stated, the bill says that, if an agent has a risk that is based in one state but has offices in other states, taxes and filings need be presented only to the risk’s state of domicile. The state would then be responsible for sharing the taxes with the other states involved. The hope is that this would result in greater efficiency and easier access for the consumer to the surplus lines arena. The problem of how to implement the new law needs to be considered because each state would be responsible for sharing taxes paid to it.

“We will be looking again this year to work for passage for such streamlining,” says Bingeman. “I know there are some states that are worried they will lose tax dollars, but I believe it will all work out in the end for the benefit of everybody. Whether the law will pass, though, this year depends on so many variables. Not only do we have a new administration in power, but a differently constructed Congress and a financial crisis which is going to demand everybody’s full attention.”

The reform proposal is not the only thing on the government committee’s plate, however. “Committee members regularly meet with state and federal elected and appointment officials across the country,” says Bingeman. “The AAMGA’s influence in Congress and with state regulators has enabled members of the Association to advance needed insurance reforms and then to lobby their own elected representatives and regulators on matters of importance to the wholesale insurance industry.

“It has also resulted in the AAMGA being afforded the opportunity of testifying and providing specific data and information on our industry before Senate and House of Representatives committees in Washington, D.C. We also attend regularly the meetings of the National Association of Insurance Commissioners (NAIC), the National Association of Professional and Surplus Lines Offices (NAPSLO), the National Council of Insurance Legislators (NCOIL) and other industry conferences,” Bingeman continues. “We also liaise regularly with the Financial Services Authority (FSA) in the United Kingdom, in order to discuss and advise how regulatory initiatives there will impact their business in North America,” he said.

In addition to all that, Bingeman says that each week the AAMGA provides its members with “podcasts” of important information, which would have an impact on the Association. “In an exclusive relationship with the Patton & Boggs law firm and its partner, Kevin O’Neill, Esquire, the podcasts provide weekly updates to keep AAMGA members on top of developments and trends,” says Bingeman.

The podcasts are available on the AAMGA Web site. Recent podcasts have to do with how President Obama is handling the financial crisis, congressional response to financial bailouts and any political debates going on between the president and Congress.

Finally, Bingeman says that the AAMGA continues to work with federal legislators on the proposed Optional Federal Charter. “We’ve been providing them with information as to how our industry works. Basically, we are educating them. I believe that, generally, we support state regulation of insurance. However, there’s no question that our business is in need of streamlining.”