News from the Director on Nonadmitted Insurance Multistate Agreement (NIMA)
A big step toward implementing a multi-state system for surplus lines was taken on Friday, March 30, 2012. Nonadmitted Insurance Multistate Agreement (NIMA) member state representatives met via conference call on Friday, March 30, 2012 and voted to adopt agreements that provide for a premium tax clearinghouse service agreement between NIMA, Inc. and the Florida Surplus Lines Service Office. The agreements will allow surplus lines premium tax for multi-state risks to be collected and reported via one clearinghouse for all NIMA member states.
The target date for NIMA to become operational and available for use by surplus lines brokers is July 1st of this year. NIMA will enable multi-state surplus lines brokers to have a single source for filing and paying premium taxes for risks applicable to the participating states.
NIMA is designed to provide a mechanism to report, collect, allocate and distribute surplus lines tax revenues consistent with the Non-admitted and Reinsurance Reform Act (NRRA). The NRRA is part of the Dodd-Frank Wall Street Reform legislation passed in 2010 that allows only the home state of the insured to require premium tax payments for non-admitted insurance in the absence of an agreement among states. NIMA will allow participating states to continue to collect surplus lines premium taxes according to state laws consistent with the agreement.
While NIMA is supported by the National Association of Insurance Commissioners (NAIC), there is a competing agreement, SLIMPACT, that has been endorsed by other states. NIMA states currently represent 21.6 percent of the surplus lines marketplace based on 2009 data.