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Oct. 27, 2010
Wholesaler and company representatives joined forces once again for the 2010 PIWA Annual Conference, Oct. 20 at the Pearl River Hilton.
A look at the National scene
The program kicked off with a luncheon, featuring Marshall Kath, immediate past president of NAPSLO, who addressed marketplace issues and company underwriting strategies in the difficult investment and economic environment of the last two years. He then focused on federal legislation and addressed changes that will occur with the enactment of the Non-admitted and Reinsurance Reform Act of 2010 (NRRA)-an issue that was discussed in more detail later in the day during the legislative/regulatory update.
State legislative update
During the PIWA legislative and regulatory update, ELANY Executive Director Dan Maher discussed the implementation of the Non-Admitted Insurance portion of the State-Based Insurance Reform of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the new federal law, starting July 21, 2011, excess line brokers will only have to pay the premium tax to the home state of the insured for multi-state risks. Unfortunately, not all the terms in the new law were carefully defined, so implementation of the new law in New York and the other states will be a challenge. For example, the definition of "home state of the insured" is not a bright line. Also, excess line brokers will need only to meet the surplus line eligibility requirements for the home state of the insured. Additionally, excess line brokers placing certain exempt commercial insureds with consent, will not have to comply with limitations on the export of the coverage (for example the 3 declination requirement.)
PIWA's legislative representative Bob Pastel recalled that 20 years ago PIWA members worked on implementing an allocation of premium taxes for multi-state risks when the Department had decided that 100% of the premium tax was due to New York. New York also adopted the tax on independently procured insurance (direct placement tax) when resolving the issue when members were faced with double and triple taxation by the various states.
PIWA will be working on facilitating the implementation of the new law as it applies in New York, which should, theoretically, simplify payments by excess brokers to the states.
Pastel also talked about the upcoming November elections and the possibility of the state Senate returning to Republican control; or a 31-31 vote tie with the Democrats. He also provided a summary of the legislative session to date, including, in particular the passage in the state Senate of legislation which would mandate $1 million dollar financial responsibility requirements for public vessels, and would allow the recognition of non-admitted paper for public vessel liability insurance. The bill, S.5203-A by Senator Breslin has passed the Senate. The Assembly Companion bill by Assemblymen Schimminger and Morelle was reported out of Assembly Insurance Committee but is currently sitting in Assembly Codes Committee.
Pastel indicated that for the first time in his memory, he was starting to hear from legislators that the non-admitted companies were obtaining an advantage over admitted insurance companies. PIWA members will have to redouble their efforts to inform the legislature.
Members heard about efforts about revival of the NY Insurance Exchange. Also, they heard about challenge to the producer compensation disclosure regulation in the state Supreme Court. (In NY the state Supreme Court is the lowest court.) The challengers have sought to have the regulation set aside as outside the statutory authority. The challengers also pointed to the exemption of wholesalers from the regulation as "irrational" because although they do not direct customer contact, it they maintain the decision making power over the placement of the risk.
PIWA intends to meet with the legislature early next year to discuss matters of concern.
Bermuda and beyond--a look at wholesalers' market alternatives
The afternoon panel discussion at PIWA's 2010 Annual Conference featured a group of industry professionals with widely differing backgrounds and areas of expertise, discussing alternative markets and the opportunities they present to wholesalers.
Many thanks to:
Abe Snyder Memorial Scholarship
Following a lively networking reception, the conference dinner opened with the presentation of the Abe Snyder Memorial Scholarship to this year's winner, St. John's University senior Veronica Fouad. In her acceptance remarks, Fouad spoke of her love for the 'world of risk' and the great opportunities she has had through her college internships here and in London.
Service to the Industry Presentation
The keynote speaker of the evening was PIWA's Service to the Industry Honoree Stephen J. Vaccaro, Jr., Chief Executive Officer of Max Specialty (now Alterra). "The wholesale marketplace is here to stay," Vaccaro stated. He said that to grow, wholesalers and the companies they represent need to find their space in the marketplace and bring added value to their clients. He noted that the excess and surplus market is a "problem solver, not a commodity writer," and urged wholesalers to find companies with risk appetites that match up to their own needs.
Thanks to our sponsors
Please join PIWA in thanking and supporting the many companies who made this year's event possible through their generous sponsorships and support: