Louisiana Withdraws From Nonadmitted Insurance Multi-State Agreement (NIMA)
Jul 15, 2015 | By Colodny Fass
The State of Louisiana announced tonight, July 15, 2015, that it will withdraw from the Nonadmitted Insurance Multi-State Agreement (“NIMA”) and the NIMA-sponsored Surplus Lines Clearinghouse effective October 1, 2015. Accordingly, Louisiana will no longer share surplus lines tax revenue with NIMA-participating states.
The withdrawal comes pursuant to the enactment of HB 259, which was sponsored by Louisiana State Representative Ledricka Johnson Thierry, a Democrat.
To read a summary of HB 259, click here.
Among other provisions, the bill repeals the requirement of Louisiana’s Insurance Commissioner to enter the NIMA, which provides its members with 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 federal 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.
The announcement came as part of Bulletin 2015-06, which provides guidance for calculating, reporting and paying surplus lines taxes as a consequence of Louisiana’s withdrawal from NIMA and the reduction of the surplus lines tax rate.
To view the complete Bulletin, click here.