The Florida Surplus Lines Office (“FSLO”) has reported that, effective June 1, Florida will withdraw from the Nonadmitted Insurance Multi-State Agreement (NIMA). Filings after June 1 will now be filed with the FSLO and not through the Surplus Lines Clearinghouse. Premium tax exposures will not be affected and rates where the risk or exposure is located will be utilized. Furthermore, other state filings will not be affected by Florida’s withdrawal from NIMA as the FSLO is still contracted with NIMA to serve as the Surplus Lines Clearinghouse provider.
Florida has joined Louisiana in withdrawing from NIMA over the last year. A statement issued from the Florida Office of Insurance Regulation indicated that Florida was not recognizing the benefits it anticipated from joining NIMA, and expressed concern that “large states” may particularly fail to achieve desired benefits.
Florida’s withdrawal from NIMA is being applauded by some insurance industry participants, such as the National Association of Professional Surplus Lines Offices, which believes such withdrawal will help achieve the goal of having 100 percent of premium taxes paid to the home state of the insured, a uniformity envisioned by the Nonadmitted and Reinsurance Reform Act of 2010.
We will continue to regularly track and report on NIMA and the participants of the agreement. We will also continue to advise on the evolving trends in premium tax payments on both an individual level as well as on a group basis.