There is good news to report. During yesterday's hearing Senator Dodd noted the "consensus" that has developed on the issues surrounding reform and modernization of the surplus lines market and, especially, in respect of Senate Bill 929, the "Nonadmitted & Reinsurance Reform Act." Senator Mel Martinez (R. FL), who jointly introduced the Bill with colleague Senator Bill Nelson (D. FL) following its unanimous passage in the House of Representatives, also stated during the Hearing that the legislation would "boost the vitality of surplus lines and provide coverage for and protection of consumers," especially in coastal states. Click here for a full copy of S 929.

"This Committee has a responsibility to consider the current state of the insurance industry and the regulatory framework within which it operates... The Committee also has a responsibility to consider proposals intended to modernize and improve the regulation of insurance."

In response to the New York State Department of Insurance and Attorney General's Office joint hearing on the appropriateness of "contingent commissions," the AAMGA Governmental Affairs Committee Co-Chairs, Bill Malone and Kurt Bingeman, along with Executive Director Bernie Heinze, each offered testimony on the integral nature and operation of the wholesale insurance marketplace, and the propriety of profit commissions. Click here for a copy of the testimony presented.

A lawsuit has been filed by two CA taxpayers in the Superior Court of California against Lexington Insurance Company and other "John Doe" defendants to collect additional surplus lines taxes the insurer(s) allegedly did not pay on premiums collected in the state.

In Silvers & Gold vs. State Board of Equalization and Lexington Insurance Company, et al., a declaratory judgment action, the Plaintiffs allege that Lexington owes California more than $88 million in Section 28 taxes on more than $3.75 billion of premiums on insurance policies issued to California policyholders issued during the past five (5) calendar years. A copy of the Complaint can be downloaded by clicking here.

Lexington filed an objection to the action on the grounds that the sole cause of action fails for lack of legal capacity to sue and to state facts sufficient to constitute a cause of action.

Creation of the Office of Insurance Information (HR 5840)

Representative Paul Kanjorski (D-PA) held a hearing on Tuesday June 10, 2008, to examine H.R. 5840, the Insurance Information Act of 2008. Congressman Kanjorski introduced H.R. 5840 on April 17th, 2008. The hearing occurred before the Capital Markets, Insurance, and Government-Sponsored Enterprises Subcommittee of the House Committee on Financial Services, which Congressman Kanjorski chairs.

If enacted into law, H.R. 5840 would create an Office of Insurance Information (OII) within the Department of the Treasury. Key supporters of the Insurance Information Act noted during the hearing that the legislation only empowers the OII to have preemptive regulatory authority over international issues, not domestic insurance matters. Those supporters described the OII as designed to serve as an on-call adviser and information clearinghouse to help address domestic insurance policy concerns.

In the wake of two tumultuous storm seasons, Florida has experienced the significant growth of both its state-backed insurer and reinsurance fund. This article briefly summarizes the major legislative, regulatory, and market developments in Florida’s property insurance industry over the past three years. It is also intended to highlight the state’s metamorphosis into a full-fledged market competitor and the deliberate steps the state took in making that transition. This article concludes with an overview of the new problems facing a state that continues to struggle with a shrinking voluntary property insurance market while state officials remain perplexed over the failure of recent reform to result in meaningful rate reduction. To read the full article, please click here.

WASHINGTON, D.C., April 3, 2008-House Majority Whip Rep. James Clyburn (D-S.C.) and Sen. Susan Collins (R-Maine) addressed 1,200 independent insurance agents and brokers at the Independent Insurance Agents & Brokers of America's (the Big "I") Legislative Conference & Convention this morning.

Clyburn discussed the current financial crisis and the economic stimulus package. "We kept small businesses in mind....and we came out with a bill that was pretty good," he says. "Especially after Ben Bernanke's discussion on the Hill yesterday, we're going to need to take a second look (at the economic stimulus package)."
On agent licensing, Clyburn noted that he stood ready to assist in passing H.R. 5611, the NARAB Reform Act or NARAB II. "I plan to work with Rep. Scott to get the legislation passed---legislation that will make your job easier," he said. "That's my job."

THE RESULTS ARE IN!
AAMGA Past President Scott Anderson today announced the outcome of the Association's 2008 Election. Curtis Anderson of RPS/Scottsdale Curtis_Anderson@rpsins.com, was elected by a majority of the membership to serve as President-Elect for the coming year and will then become President of the AAMGA for the 2009-2010 term.

Also elected as Directors to serve on the Board from the Eastern Region was R.C. Chaffin of SeaCoast Underwriters rcc@seacoastunderwriters.com, and from the Western Region was Corinne Jones of Bliss & Glennon, Inc. jonesc@bgsurplus.com

BYLAWS APPROVED
Mr. Anderson also reported that amendments to the AAMGA Bylaws were also approved by the membership. "More votes were received this year than at any time in the past 7 years, and I believe this is representative of the impressive quality of candidates who stood for election this year, and the confidence the Association members have in their leadership," Mr. Anderson added.

Alabama's leading homeowners insurer is cutting back its catastrophe exposure in coastal territories around Mobile Bay.

State Farm has announced it is not writing new wind and hail policies for homes south of Interstate 10 in Mobile County, and generally along the Highway 98 corridor in Baldwin County, beginning April 1. Homeowners here will likely turn to the Alabama Insurance Underwriters Association, which has about 9,100 policies.

"It was a tough decision but this is an ongoing process to reduce exposure so that we are able to respond to the needs of all of our policyholders," said State Farm spokesman David Majors.

There will be no changes to existing State Farm policyholders unless they move to an area in which the company is no longer writing new business or an area where State Farm is no longer offering wind and hail coverage, Majors said.

An earthquake of 6.8 magnitude or greater on California's Hayward Fault, in the heart of the San Francisco Bay area, could impact more than 5 million people and impact more than $1.5 trillion in property and contents, according to new information from members of the 1868 Hayward Earthquake Alliance and Risk Management Solutions (RMS).

The last major earthquake on the Hayward Fault was in 1868, 140 years ago: research by the U.S. Geological Survey (USGS) and others indicate the past five such earthquakes have been 140 years apart on average. So an earthquake on this fault is increasingly likely.

If the 1868 earthquake were to reoccur today, RMS estimates total economic losses to residential and commercial properties would likely exceed $165 billion. Other factors, such as fire, damage to infrastructure and related disruption would substantially increase the loss.