Tax News

CCH (cch.taxgroup.com) reports:

The U.S. House of Representatives unanimously voted on June 25, 2007, to approve the Nonadmitted and Reinsurance Reform Act of 2007 (H.R. 1065) regarding the reporting, payment, and allocation of state insurance premium taxes for nonadmitted insurance. The bill, sponsored by Reps. Ginny Brown-Waite, R-Fla., and Dennis Moore, D-Kan., seeks to revise the regulation of two specific areas in the commercial insurance marketplace, specifically, surplus lines and reinsurance transactions. The measure is nearly identical to the version that passed the 109th Congress by a vote of 417-0.
Currently, insurers and brokers who want to provide insurance across state lines are subjected to a myriad of different state tax and licensing requirements, said Brown-Waite. Moore said the bill would prohibit the extraterritorial application of state insurance laws and allow ceding insurers and reinsurers to resolve disputes pursuant to contractual arbitration clauses.
"This important bill will harmonize and in some cases reduce regulation and taxation of this insurance by vesting the home state where it is headquartered with the sole authority to regulate and collect the taxes on a surplus lines transaction," Moore said. "Those taxes that will be collected may be distributed according to a future interstate compact. Absent such a compact, their distribution would be up to the home state."
Subscribers to CCH Tax Research NetWork can view the bill.
  By Stephen K. Cooper, CCH News Staff
H.R. 1065, as passed by the U.S. House of Representatives on June 25, 2007
By Paula Cruickshank, CCH News Staff