Bulletin #37: NRRA Information
General Bulletin #37
Although Illinois has not
changed its statutory language to harmonize it with the NRRA,
the NRRA is now the law of the land. The Department of
Insurance has issued implementation guidance (Bulletin
#2011-09) which we have previously sent out to members. As
you move forward in the new NRRA era, here are some things
to remember:
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Your first step
is always to determine the Home State of the
insured for the transaction. Once you have, you follow that
state's laws, regulations and published guidance. From now
on, for each transaction, there is only one set of
rules to follow!
-
It is
recommended that you document your file to
show how the Home State determination was made. Sooner or
later, some state is going to ask you how you came up with
your Home State determination on a particular policy - you'd
better be prepared to answer!
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When Illinois
is the Home State and the policy was effective prior to July
21, 2011, the old rules apply for that policy and any
endorsements to that policy. For all policies effective July
21, 2011 or later, the new rules apply.
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Illinois is not
currently participating in any tax sharing agreement or
compact. If Illinois is the Home State as defined by the NRRA, the entire premium for the policy is
used when applying Illinois surplus line tax, fire marshal
tax and stamping fee. Remember, fire marshal tax can apply
to varying percentages of the taxable premium. Check the
table in our Procedures Manual..
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As of this
date, nineteen states have adopted one of the two interstate
compacts (SLIMPACT and NIMA), however, neither compact has a
clearinghouse up and running. If you determine the Home
State to be one of these nineteen states, be sure to pay
close attention to guidance coming from these states about
how to handle transactions before, and after, any
clearinghouse is established. Remember, it doesn't matter
on a multistate transaction if some of the states are
SLIMPACT, some are NIMA and some are neither. Follow the
rules of the Home State, as defined. If the Home State is
SLIMPACT, it's a SLIMPACT policy ... period. If the Home
State is NIMA, it's NIMA. If the Home State is neither, you
file solely with the Home State. You no longer need to
apply multiple sets of rules to a multistate policy.
NAPSLO's NRRA Tracking Page
AAMGA's Compliance Guide
The materials and information contained herein are only synopses of laws, regulations and other information and do not constitute legal advice. It is recommended that you consult your legal advisers regarding application of state and federal laws and regulations to any particular situation. The Surplus Line Association of Illinois (SLAI) does not undertake and hereby disclaims any obligation to advise you of any change to laws and regulations or to the SLAI procedures.
22-Jul-2011
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