Two senators have introduced the Nonadmitted and Reinsurance Reform Act of 2009, a companion bill to the House version introduced two months ago.

Mel Martinez

Sen. Evan Bayh (D-Ind.) and Sen. Mel Martinez (R-Fla.) filed S. 1363, which makes the policyholder’s home state the source of regulation for individual surplus lines transactions. The bill also seeks to reduce overlapping, multiple-state regulation of both reinsurer financial condition and credit-for-reinsurance on the balance sheets of ceding insurers, according to the Independent Insurance Agents & Brokers of America.

The Big I said the legislation is another example of a positive targeted approach to reform and is designed to streamline the regulation of nonadmitted insurance and reinsurance.

“S. 1363 is pragmatic legislation that will bring needed reform to an important component of the state insurance regulatory system: the surplus lines market,” said Charles E. Symington Jr., Big I’s senior vice president for government affairs, in a statement.

Independent insurance agents and brokers play “a crucial role” in surplus lines insurance, the Big I said in the statement.

“By applying single-state regulation and uniform standards to the nonadmitted and reinsurance markets along with giving the state sole regulatory authority, the surplus lines bill will preserve the strengths of the state-based insurance regulatory system without the need to create a federal insurance regulator,” said Tom Koonce, Big I’s assistant vice president for federal government affairs.

The bill, which was co-sponsored by Sens. Mike Crapo (R-Idaho) and Bill Nelson (D-Fla.), is before the Senate Committee on Banking, Housing, and Urban Affairs.

In May, the surplus lines bill was introduced by Rep. Dennis Moore (D-Kan.) and Rep. Scott Garrett (R-N.J.) in the House of Representatives. Similar legislation passed the House in prior years.