- Florida Withdraws from NIMA Effective June 1, 2016
- April 27, 2016 | Author: Jennifer C. Erdelyi
- Law Firm: Colodny Fass, P.A. - Sunrise Office
The Florida Surplus Lines Service Office ("FSLSO") issued Bulletin 2016-03 today, April 14, 2016, stating that Florida has withdrawn from the Nonadmitted Insurance Multi-State Agreement ("NIMA") effective June 1, 2016.
The Bulletin also provides guidance on the filing of multi-state surplus lines policies where Florida is the home state of the insured.
In an advisory also issued today, the National Association of Professional Surplus Lines Offices ("NAPSLO") noted that all policies issued or renewed on or after the June 1 effective date will be filed through the FSLSO, rather than the Surplus Lines Clearinghouse.
For multi-state risk policies issued or renewed prior to June 1, 2016, filings will continue to be made through the Surplus Lines Clearinghouse, including endorsements to new and renewal policies effective prior to June 1, 2016, through May 31, 2017.
The Bulletin further advises that, even though Florida will no longer participate in NIMA, pursuant to current Florida statutes, multi-state premium will continue to be taxed based on the rate of the state where the risk or exposure is located.
NAPSLO emphasized that its top state legislative priority remains achieving uniformity among all states on the regulation and taxation of surplus lines premium. The organization said it continues to advocate that home state taxation, where surplus lines taxes are calculated at the home state's tax rate on 100 percent of the premium and retained 100 percent by the home state, is the only viable and uniform national solution.
"Given Florida's withdrawal from NIMA, the reality of this uniformity envisioned and made possible with the Nonadmitted and Reinsurance Reform Act of 2010 is one huge step closer. We applaud Florida's decision to effectuate this change," NAPSLO wrote today in its advisory.
Florida is the second of the six NIMA jurisdictions to withdraw from the tax-sharing agreement since it became operational in July 2012. With Louisiana's withdrawal from NIMA last October, today's announcement leaves only Puerto Rico, South Dakota, Utah and Wyoming as full members of NIMA, along with Tennessee participating as an associate member.
Today's FSLSO Bulletin indicates this announcement does not impact the remaining NIMA states' filing procedures.
NIMA, Inc. formally contracted with the FSLSO on April 16, 2012 to serve as its central clearinghouse provider for the collection and allocation of surplus lines premium tax payments for multi-state surplus lines policies. The FSLSO has served as the technology platform provider for the NIMA Clearinghouse and performed all of its administrative duties. The NIMA Clearinghouse began receiving filings for policies issued or renewed on or after July 1, 2012.