Exempt Commercial Purchaser (ECP) Adjustments
Provisions in the federal NRRA law and in corresponding state statutes require that the minimum threshold dollar amounts in the Exempt Commercial Purchaser ("ECP") definition be revised on January 1, 2015 and each 5th January 1 thereafter based on changes in the Consumer Price Index. The NAIC Surplus Lines Task Force reviews the required data and determines the percentage change calculation and adjusted minimum amounts for the affected categories as shown below:
Sub-
clause |
|
Category |
|
Previous
Minimum |
|
Adjusted Minimum
Effective 1/1/2015 |
|
Adjusted Minimum
Effective 1/1/2020 |
| |
| (I) |
|
Net Worth |
|
$20,000,000 |
|
$22,040,000 |
|
$23,781,160 |
| (II) |
|
Annual Revenues |
|
$50,000,000 |
|
$55,100,000 |
|
$59,452,900 |
| (IV) |
|
Annual Budgeted Expenditures |
|
$30,000,000 |
|
$33,060,000 |
|
$35,671,740 |
| |
| |
| Change Calculation |
|
|
|
1/1/2015 |
|
1/1/2020 |
| |
| |
|
CPI Previous |
|
|
|
Sep-2009
215.9691 |
|
Sep-2014
238.0312 |
| |
| |
|
CPI Current |
|
|
|
Sep-2014
238.0311 |
|
Sep-2019
256.7592 |
| |
| |
|
Adjustment Calculation |
|
|
|
(238.031 - 215.969)
215.969 |
|
(256.759 - 238.031)
238.031 |
| |
| |
|
Percentage Change |
|
|
|
= .102 or 10.2% |
|
= .079 or 7.9% |
1 Source: CPI, October 2014, Table 1: Consumer Price Index for All Urban Consumers
2 Source: CPI, October 2019, Table 1: Consumer Price Index for All Urban Consumers
If you have questions about how these amount apply to the determination of ECP status, please feel free to contact the Association. |
