S. 4869 2
among the states the premium taxes paid to an insured's home state; and
that each state adopt nationwide uniform requirements, form, and proce-
dures, such as an interstate compact, that provide for the reporting,
payment, collection and allocation of premium taxes for non-admitted
insurance.
The legislature finds further that after the expiration of the two-
year period beginning on the effective date of the NRRA, a state may not
collect any fees relating to licensing of an individual or entity as a
surplus lines licensee in the state unless the state has in effect at
such time laws or regulations that provide for participation by the
state in the national insurance producer database of the National Asso-
ciation of Insurance Commissioners (hereinafter the NAIC) or any other
equivalent uniform national database for the licensure of surplus lines
licensees and the renewal of such licenses.
The legislature recognizes that a need exists for a system of regu-
lation that will provide for surplus lines insurance to be placed with
reputable and financially sound non-admitted insurers and that will
permit orderly access to surplus lines insurance in this state and
encourage insurers to make new and innovative types of insurance avail-
able to consumers in this state.
The legislature finds that protecting the revenue of this state and
other compacting states may be accomplished by facilitating the payment
and collection of premium tax on non-admitted insurance and providing
for allocation of premium tax for non-admitted insurance of multi-state
risks among the states in accordance with uniform allocation formulas.
The legislature finds that the efficiency of the surplus lines market
may be improved by eliminating duplicative and inconsistent tax and
regulatory requirements among the states and by promoting and protecting
the interests of surplus lines licensees who assist such insureds and
non-admitted insurers, thereby ensuring the continued availability of
non-admitted insurance to consumers.
Regulatory compliance with respect to non-admitted insurance place-
ments may be streamlined by providing for exclusive single-state regula-
tory compliance for non-admitted insurance of multi-state risks, thereby
providing certainty regarding such compliance to all persons who have an
interest in such transactions, including but not limited to insureds,
regulators, surplus lines licensees, other insurance producers and
surplus lines insurers.
The legislature finds that coordination of regulatory resources and
expertise between state insurance departments and other state agencies,
as well as state surplus lines stamping offices, with respect to non-ad-
mitted insurance will be improved.
S 2. The insurance law is amended by adding a new article 29 to read
as follows:
ARTICLE 29
SURPLUS LINES INSURANCE MULTI-STATE COMPLIANCE COMPACT
SECTION 2901. SHORT TITLE.
2902. PURPOSES.
2903. DEFINITIONS.
2904. ESTABLISHMENT OF THE COMMISSION AND VENUE.
2905. AUTHORITY TO ESTABLISH MANDATORY RULES.
2906. POWERS OF THE COMMISSION.
2907. ORGANIZATION OF THE COMMISSION.
2908. MEETINGS AND ACTS OF THE COMMISSION.
2909. RULEMAKING FUNCTIONS OF THE COMMISSION.
2910. COMMISSION RECORDS AND ENFORCEMENT.
S. 4869 3
2911. DISPUTE RESOLUTION.
2912. REVIEW OF COMMISSION DECISIONS.
2913. FINANCE.
2914. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT.
2915. WITHDRAWAL, DEFAULT AND TERMINATION.
2916. SEVERABILITY AND CONSTRUCTION.
2917. BINDING EFFECT OF COMPACT AND OTHER LAWS.
S 2901. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "SURPLUS LINES INSURANCE MULTI-STATE COMPLIANCE COMPACT".
S 2902. PURPOSES. THE PURPOSES OF THIS COMPACT ARE:
(A) TO IMPLEMENT THE EXPRESS PROVISIONS OF THE NON-ADMITTED AND REIN-
SURANCE REFORM ACT OF 2010 (HEREINAFTER THE NRRA).
(B) TO PROTECT THE PREMIUM TAX REVENUES OF THE COMPACTING STATES
THROUGH FACILITATING THE PAYMENT AND COLLECTION OF PREMIUM TAX ON
NON-ADMITTED INSURANCE; AND TO PROTECT THE INTERESTS OF THE COMPACTING
STATES BY SUPPORTING THE CONTINUED AVAILABILITY OF SUCH INSURANCE TO
CONSUMERS; AND TO PROVIDE FOR ALLOCATION OF PREMIUM TAX FOR NON-ADMITTED
INSURANCE OF MULTI-STATE RISKS AMONG THE STATES IN ACCORDANCE WITH
UNIFORM ALLOCATION FORMULAS TO BE DEVELOPED, ADOPTED, AND IMPLEMENTED BY
THE COMMISSION.
(C) TO STREAMLINE AND IMPROVE THE EFFICIENCY OF THE SURPLUS LINES
MARKET BY ELIMINATING DUPLICATIVE AND INCONSISTENT TAX AND REGULATORY
REQUIREMENTS AMONG THE STATES; AND PROMOTE AND PROTECT THE INTEREST OF
SURPLUS LINES LICENSEES WHO ASSIST SUCH INSUREDS AND SURPLUS LINES
INSURERS, THEREBY ENSURING THE CONTINUED AVAILABILITY OF SURPLUS LINES
INSURANCE TO CONSUMERS.
(D) TO STREAMLINE REGULATORY COMPLIANCE WITH RESPECT TO NON-ADMITTED
INSURANCE PLACEMENTS BY PROVIDING FOR EXCLUSIVE SINGLE-STATE REGULATORY
COMPLIANCE FOR NON-ADMITTED INSURANCE OF MULTI-STATE RISKS, IN ACCORD-
ANCE WITH RULES TO BE ADOPTED BY THE COMMISSION, THEREBY PROVIDING
CERTAINTY REGARDING SUCH COMPLIANCE TO ALL PERSONS WHO HAVE AN INTEREST
IN SUCH TRANSACTIONS, INCLUDING BUT NOT LIMITED TO INSUREDS, REGULATORS,
SURPLUS LINES LICENSEES, OTHER INSURANCE PRODUCERS AND SURPLUS LINES
INSURERS.
(E) TO ESTABLISH A CLEARINGHOUSE FOR RECEIPT AND DISSEMINATION OF
PREMIUM TAX AND CLEARINGHOUSE TRANSACTION DATA RELATED TO NON-ADMITTED
INSURANCE OF MULTI-STATE RISKS, IN ACCORDANCE WITH RULES TO BE ADOPTED
BY THE COMMISSION.
(F) TO IMPROVE COORDINATION OF REGULATORY RESOURCES AND EXPERTISE
BETWEEN STATE INSURANCE DEPARTMENTS AND OTHER STATE AGENCIES, AS WELL AS
STATE SURPLUS LINES STAMPING OFFICES, WITH RESPECT TO NON-ADMITTED
INSURANCE.
(G) TO ADOPT UNIFORM RULES TO PROVIDE FOR PREMIUM TAX PAYMENT, REPORT-
ING, ALLOCATION, DATA COLLECTION AND DISSEMINATION FOR NON-ADMITTED
INSURANCE OF MULTI-STATE RISKS AND SINGLE-STATE RISKS, IN ACCORDANCE
WITH RULES TO BE ADOPTED BY THE COMMISSION, THEREBY PROMOTING THE OVER-
ALL EFFICIENCY OF THE NON-ADMITTED INSURANCE MARKET.
(H) TO ADOPT UNIFORM MANDATORY RULES WITH RESPECT TO REGULATORY
COMPLIANCE REQUIREMENTS FOR:
(1) FOREIGN INSURER ELIGIBILITY REQUIREMENTS; AND
(2) SURPLUS LINES POLICYHOLDER NOTICES.
(I) TO ESTABLISH THE SURPLUS LINES INSURANCE MULTI-STATE COMPLIANCE
COMPACT COMMISSION.
(J) TO COORDINATE REPORTING OF CLEARINGHOUSE TRANSACTION DATA ON NON-
ADMITTED INSURANCE OF MULTI-STATE RISKS AMONG COMPACTING STATES AND
CONTRACTING STATES.
S. 4869 4
(K) TO PERFORM THESE AND SUCH OTHER RELATED FUNCTIONS AS MAY BE
CONSISTENT WITH THE PURPOSES OF THE SURPLUS LINES INSURANCE MULTI-STATE
COMPLIANCE COMPACT.
S 2903. DEFINITIONS. FOR THE PURPOSES OF THIS COMPACT THE FOLLOWING
DEFINITIONS SHALL APPLY:
(A) "ADMITTED INSURER" MEANS AN INSURER THAT IS LICENSED OR AUTHORIZED
TO TRANSACT THE BUSINESS OF INSURANCE UNDER THE LAW OF THE HOME STATE;
FOR PURPOSES OF THIS COMPACT "ADMITTED INSURER" SHALL NOT INCLUDE A
DOMESTIC SURPLUS LINES INSURER AS MAY BE DEFINED BY APPLICABLE STATE
LAW.
(B) "AFFILIATE" MEANS, WITH RESPECT TO AN INSURED, ANY ENTITY THAT
CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL WITH THE INSURED.
(C) "ALLOCATION FORMULA" MEANS THE UNIFORM METHODS PROMULGATED BY THE
COMMISSION BY WHICH INSURED RISK EXPOSURES WILL BE APPORTIONED TO EACH
STATE FOR THE PURPOSE OF CALCULATING PREMIUM TAXES DUE.
(D) "BYLAWS" MEANS THOSE BYLAWS ESTABLISHED BY THE COMMISSION FOR ITS
GOVERNANCE OR FOR DIRECTING OR CONTROLLING THE COMMISSION'S ACTIONS OR
CONDUCT.
(E) "CLEARINGHOUSE" MEANS THE COMMISSION'S OPERATIONS INVOLVING THE
ACCEPTANCE, PROCESSING AND DISSEMINATION AMONG THE COMPACTING STATES,
CONTRACTING STATES, SURPLUS LINES LICENSEES, INSUREDS AND OTHER PERSONS
OF PREMIUM TAX AND CLEARINGHOUSE TRANSACTION DATA FOR NON-ADMITTED
INSURANCE OF MULTI-STATE RISKS IN ACCORDANCE WITH THIS COMPACT AND RULES
TO BE ADOPTED BY THE COMMISSION.
(F) "CLEARINGHOUSE TRANSACTION DATA" MEANS THE INFORMATION REGARDING
NON-ADMITTED INSURANCE OF MULTI-STATE RISKS REQUIRED TO BE REPORTED,
ACCEPTED, COLLECTED, PROCESSED AND DISSEMINATED BY SURPLUS LINES LICEN-
SEES FOR SURPLUS LINES INSURANCE AND INSUREDS FOR INDEPENDENTLY PROCURED
INSURANCE UNDER THIS COMPACT AND RULES TO BE ADOPTED BY THE COMMISSION.
CLEARINGHOUSE TRANSACTION DATA INCLUDES INFORMATION RELATED TO
SINGLE-STATE RISKS IF A STATE ELECTS TO HAVE THE CLEARINGHOUSE COLLECT
TAXES ON SINGLE-STATE RISKS FOR SUCH STATE.
(G) "COMPACTING STATE" MEANS ANY STATE WHICH HAS ENACTED THIS COMPACT
LEGISLATION AND WHICH HAS NOT WITHDRAWN PURSUANT TO SUBSECTION (A) OF
SECTION TWENTY-NINE HUNDRED FIFTEEN OF THIS ARTICLE OR BEEN TERMINATED
PURSUANT TO SUBSECTION (B) OF SECTION TWENTY-NINE HUNDRED FIFTEEN OF
THIS ARTICLE.
(H) "COMMISSION" MEANS THE SURPLUS LINES INSURANCE MULTI-STATE COMPLI-
ANCE COMPACT COMMISSION ESTABLISHED BY THIS COMPACT.
(I) "COMMISSIONER" MEANS THE CHIEF INSURANCE REGULATORY OFFICIAL OF A
STATE INCLUDING, BUT NOT LIMITED TO, COMMISSIONER, SUPERINTENDENT,
DIRECTOR OR ADMINISTRATOR OR THEIR DESIGNEES.
(J) "CONTRACTING STATE" MEANS ANY STATE WHICH HAS NOT ENACTED THIS
COMPACT LEGISLATION BUT HAS ENTERED INTO A WRITTEN CONTRACT WITH THE
COMMISSION TO UTILIZE THE SERVICES OF AND FULLY PARTICIPATE IN THE
CLEARINGHOUSE.
(K) "CONTROL" MEANS ONE ENTITY HAS POWER OVER ANOTHER. FOR THE
PURPOSES OF THIS ARTICLE, AN ENTITY HAS CONTROL OVER ANOTHER ENTITY IF:
(1) THE ENTITY DIRECTLY OR INDIRECTLY OR ACTING THROUGH ONE OR MORE
OTHER PERSONS OWN, CONTROLS OR HAS THE POWER TO VOTE TWENTY-FIVE PERCENT
OR MORE OF ANY CLASS OF VOTING SECURITIES OF THE OTHER ENTITY; OR
(2) SUCH ENTITY CONTROLS IN ANY MANNER THE ELECTION OF A MAJORITY OF
THE DIRECTORS OR TRUSTEES OF THE OTHER ENTITY.
(L) "HOME STATE" SHALL HAVE TWO MEANINGS DEPENDING ON CONTEXT:
(1) EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS SUBSECTION, THE TERM
"HOME STATE" MEANS, WITH RESPECT TO AN INSURED:
S. 4869 5
(A) THE STATE IN WHICH AN INSURED MAINTAINS ITS PRINCIPAL PLACE OF
BUSINESS OR, IN THE CASE OF AN INDIVIDUAL, THE INDIVIDUAL'S PRINCIPAL
RESIDENCE; OR
(B) IF ONE HUNDRED PERCENT OF THE INSURED RISK IS LOCATED OUT OF THE
STATE REFERRED TO IN SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE STATE TO
WHICH THE GREATEST PERCENTAGE OF THE INSURED'S TAXABLE PREMIUM FOR THAT
INSURANCE CONTRACT IS ALLOCATED.
(2) IF MORE THAN ONE INSURED FROM AN AFFILIATED GROUP ARE NAMED
INSUREDS ON A SINGLE NON-ADMITTED INSURANCE CONTRACT, THE TERM "HOME
STATE" MEANS THE HOME STATE, AS DETERMINED PURSUANT TO PARAGRAPH ONE OF
THIS SUBSECTION, OF THE MEMBER OF THE AFFILIATED GROUP THAT HAS THE
LARGEST PERCENTAGE OF PREMIUM ATTRIBUTED TO IT UNDER SUCH INSURANCE
CONTRACT.
(M) "INDEPENDENTLY PROCURED INSURANCE" MEANS INSURANCE PROCURED BY AN
INSURED DIRECTLY FROM A SURPLUS LINES INSURER OR OTHER NON-ADMITTED
INSURER AS PERMITTED BY THE LAWS OF THE HOME STATE.
(N) "INSURER ELIGIBILITY REQUIREMENTS" MEANS THE CRITERIA, FORMS AND
PROCEDURES ESTABLISHED TO QUALIFY AS A SURPLUS LINES INSURER UNDER THE
LAW OF THE HOME STATE PROVIDED THAT SUCH CRITERIA, FORMS AND PROCEDURES
ARE CONSISTENT WITH THE EXPRESS PROVISIONS OF THE NRRA ON AND AFTER JULY
TWENTY-FIRST, TWO THOUSAND ELEVEN.
(O) "MEMBER" MEANS THE PERSON OR PERSONS CHOSEN BY A COMPACTING STATE
AS ITS REPRESENTATIVE OR REPRESENTATIVES TO THE COMMISSION PROVIDED THAT
EACH COMPACTING STATE SHALL BE LIMITED TO ONE VOTE.
(P) "MULTI-STATE RISK" MEANS A RISK WITH INSURED EXPOSURES IN MORE
THAN ONE STATE.
(Q) "NON-COMPACTING STATE" MEANS ANY STATE WHICH HAS NOT ADOPTED THIS
COMPACT.
(R) "NON-ADMITTED INSURANCE" MEANS SURPLUS LINES INSURANCE AND INDE-
PENDENTLY PROCURED INSURANCE.
(S) "NON-ADMITTED INSURER" MEANS AN INSURER THAT IS NOT AUTHORIZED OR
ADMITTED TO TRANSACT THE BUSINESS OF INSURANCE UNDER THE LAW OF THE HOME
STATE.
(T) "NRRA" MEANS THE NON-ADMITTED AND REINSURANCE REFORM ACT OF 2010,
FOUND IN TITLE V, SUBTITLE B OF THE FEDERAL DODD-FRANK WALL STREET
REFORM AND CONSUMER PROTECTION ACT.
(U) "POLICYHOLDER NOTICE" MEANS THE DISCLOSURE NOTICE OR STAMP THAT IS
REQUIRED TO BE FURNISHED TO THE APPLICANT OR POLICYHOLDER IN CONNECTION
WITH A SURPLUS LINES INSURANCE PLACEMENT.
(V) "PREMIUM TAX" MEANS WITH RESPECT TO NON-ADMITTED INSURANCE, ANY
TAX, FEE, ASSESSMENT OR OTHER CHARGE IMPOSED BY A GOVERNMENT ENTITY
DIRECTLY OR INDIRECTLY BASED ON ANY PAYMENT MADE AS CONSIDERATION FOR
SUCH INSURANCE, INCLUDING PREMIUM DEPOSITS, ASSESSMENTS, REGISTRATION
FEES AND ANY OTHER COMPENSATION GIVEN IN CONSIDERATION FOR A CONTRACT OF
INSURANCE.
(W) "PRINCIPAL PLACE OF BUSINESS" MEANS WITH RESPECT TO DETERMINING
THE HOME STATE OF THE INSURED, THE STATE WHERE THE INSURED MAINTAINS ITS
HEADQUARTERS AND WHERE THE INSURED'S HIGH-LEVEL OFFICERS DIRECT, CONTROL
AND COORDINATE THE BUSINESS ACTIVITIES OF THE INSURED.
(X) "PURCHASING GROUP" MEANS ANY GROUP FORMED PURSUANT TO THE LIABIL-
ITY RISK RETENTION ACT WHICH HAS AS ONE OF ITS PURPOSES THE PURCHASE OF
LIABILITY INSURANCE ON A GROUP BASIS, PURCHASES SUCH INSURANCE ONLY FOR
ITS GROUP MEMBERS AND ONLY TO COVER THEIR SIMILAR OR RELATED LIABILITY
EXPOSURE AND IS COMPOSED OF MEMBERS WHOSE BUSINESSES OR ACTIVITIES ARE
SIMILAR OR RELATED WITH RESPECT TO THE LIABILITY TO WHICH MEMBERS ARE
S. 4869 6
EXPOSED BY VIRTUE OF ANY RELATED, SIMILAR OR COMMON BUSINESS, TRADE,
PRODUCT, SERVICES, PREMISES OR OPERATIONS AND IS DOMICILED IN ANY STATE.
(Y) "RULE" MEANS A STATEMENT OF GENERAL OR PARTICULAR APPLICABILITY
AND FUTURE EFFECT PROMULGATED BY THE COMMISSION DESIGNED TO IMPLEMENT,
INTERPRET OR PRESCRIBE LAW OR POLICY OR DESCRIBING THE ORGANIZATION,
PROCEDURE OR PRACTICE REQUIREMENTS OF THE COMMISSION WHICH SHALL HAVE
THE FORCE AND EFFECT OF LAW IN THE COMPACTING STATES.
(Z) "SINGLE-STATE RISK" MEANS A RISK WITH INSURED EXPOSURES IN ONLY
ONE STATE.
(AA) "STATE" MEANS ANY STATE, DISTRICT OR TERRITORY OF THE UNITED
STATES OF AMERICA.
(BB) "STATE TRANSACTION DOCUMENTATION" MEANS THE INFORMATION REQUIRED
UNDER THE LAWS OF THE HOME STATE TO BE FILED BY SURPLUS LINES LICENSEES
IN ORDER TO REPORT SURPLUS LINES INSURANCE AND VERIFY COMPLIANCE WITH
SURPLUS LINES LAWS AND BY INSUREDS IN ORDER TO REPORT INDEPENDENTLY
PROCURED INSURANCE.
(CC) "SURPLUS LINES INSURANCE" MEANS INSURANCE PROCURED BY A SURPLUS
LINES LICENSEE FROM A SURPLUS LINES INSURER OR OTHER NON-ADMITTED INSUR-
ER AS PERMITTED UNDER THE LAW OF THE HOME STATE. FOR THE PURPOSES OF
THIS COMPACT "SURPLUS LINES INSURANCE" SHALL ALSO MEAN EXCESS LINE
INSURANCE AS THAT TERM IS USED PURSUANT TO SECTION TWO THOUSAND ONE
HUNDRED FIVE OF THIS CHAPTER.
(DD) "SURPLUS LINES INSURER" MEANS A NON-ADMITTED INSURER ELIGIBLE
UNDER THE LAW OF THE HOME STATE TO ACCEPT BUSINESS FROM A SURPLUS LINES
LICENSEE. FOR THE PURPOSES OF THIS COMPACT "SURPLUS LINES INSURER"
SHALL ALSO MEAN AN INSURER WHICH IS PERMITTED TO WRITE SURPLUS LINES
INSURANCE UNDER THE LAWS OF THE STATE WHERE SUCH INSURER IS DOMICILED.
(EE) "SURPLUS LINES LICENSEE" MEANS AN INDIVIDUAL, FIRM OR CORPORATION
LICENSED UNDER THE LAW OF THE HOME STATE TO PLACE SURPLUS LINES INSUR-
ANCE.
S 2904. ESTABLISHMENT OF THE COMMISSION AND VENUE. (A) THE COMPACTING
STATES HEREBY CREATE AND ESTABLISH A JOINT PUBLIC AGENCY KNOWN AS THE
"SURPLUS LINES INSURANCE MULTI-STATE COMPLIANCE COMPACT COMMISSION."
(B) PURSUANT TO SECTION TWO THOUSAND NINE HUNDRED FIVE OF THIS ARTI-
CLE, THE COMMISSION WILL HAVE THE POWER TO ADOPT MANDATORY RULES WHICH
ESTABLISH EXCLUSIVE HOME STATE AUTHORITY REGARDING NON-ADMITTED INSUR-
ANCE OF MULTI-STATE RISKS, ALLOCATION FORMULAS, CLEARINGHOUSE TRANS-
ACTION DATA, A CLEARINGHOUSE FOR RECEIPT AND DISTRIBUTION OF ALLOCATED
PREMIUM TAX AND CLEARINGHOUSE TRANSACTION DATA AND UNIFORM RULEMAKING
PROCEDURES AND RULES FOR THE PURPOSE OF FINANCING, ADMINISTERING, OPER-
ATING AND ENFORCING COMPLIANCE WITH THE PROVISIONS OF THIS COMPACT, ITS
BYLAWS AND RULES.
(C) PURSUANT TO SECTION TWO THOUSAND NINE HUNDRED FIVE OF THIS ARTI-
CLE, THE COMMISSION WILL HAVE THE POWER TO ADOPT MANDATORY RULES ESTAB-
LISHING FOREIGN INSURER ELIGIBILITY REQUIREMENTS AND A CONCISE AND
OBJECTIVE POLICYHOLDER NOTICE REGARDING THE NATURE OF A SURPLUS LINES
PLACEMENT.
(D) THE COMMISSION IS A BODY CORPORATE AND POLITIC AND AN INSTRUMEN-
TALITY OF THE COMPACTING STATES.
(E) THE COMMISSION IS SOLELY RESPONSIBLE FOR ITS LIABILITIES, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED IN THIS COMPACT.
(F) VENUE IS PROPER AND JUDICIAL PROCEEDINGS BY OR AGAINST THE COMMIS-
SION SHALL BE BROUGHT SOLELY AND EXCLUSIVELY IN A COURT OF COMPETENT
JURISDICTION WHERE THE PRINCIPAL OFFICE OF THE COMMISSION IS LOCATED.
THE COMMISSION MAY WAIVE VENUE AND JURISDICTIONAL DEFENSES TO THE EXTENT
S. 4869 7
IT ADOPTS OR CONSENTS TO PARTICIPATE IN ALTERNATIVE DISPUTE RESOLUTION
PROCEEDINGS.
S 2905. AUTHORITY TO ESTABLISH MANDATORY RULES. THE COMMISSION SHALL
ADOPT MANDATORY RULES WHICH ESTABLISH:
(A) ALLOCATION FORMULAS FOR EACH TYPE OF NON-ADMITTED INSURANCE COVER-
AGE, WHICH ALLOCATION FORMULAS MUST BE USED BY EACH COMPACTING STATE AND
CONTRACTING STATE IN ACQUIRING PREMIUM TAX AND CLEARINGHOUSE TRANSACTION
DATA FROM SURPLUS LINES LICENSEES AND INSUREDS FOR REPORTING TO THE
CLEARINGHOUSE CREATED BY THE COMPACT COMMISSION. SUCH ALLOCATION FORMU-
LAS WILL BE ESTABLISHED WITH INPUT FROM SURPLUS LINES LICENSEES AND BE
BASED UPON READILY AVAILABLE DATA WITH SIMPLICITY AND UNIFORMITY FOR THE
SURPLUS LINES LICENSEE AS A MATERIAL CONSIDERATION.
(B) UNIFORM CLEARINGHOUSE TRANSACTION DATA REPORTING REQUIREMENTS FOR
ALL INFORMATION REPORTED TO THE CLEARINGHOUSE.
(C) METHODS BY WHICH COMPACTING STATES AND CONTRACTING STATES REQUIRE
SURPLUS LINES LICENSEES AND INSUREDS TO PAY PREMIUM TAX AND TO REPORT
CLEARINGHOUSE TRANSACTION DATA TO THE CLEARINGHOUSE, INCLUDING BUT NOT
LIMITED TO PROCESSING CLEARINGHOUSE TRANSACTION DATA THROUGH STATE
STAMPING AND SERVICE OFFICES, STATE INSURANCE DEPARTMENTS, OR OTHER
STATE-DESIGNATED AGENCIES OR ENTITIES.
(D) THAT NON-ADMITTED INSURANCE OF MULTI-STATE RISKS SHALL BE SUBJECT
TO ALL OF THE REGULATORY COMPLIANCE REQUIREMENTS OF THE HOME STATE
EXCLUSIVELY. HOME STATE REGULATORY COMPLIANCE REQUIREMENTS APPLICABLE TO
SURPLUS LINES INSURANCE SHALL INCLUDE, BUT NOT BE LIMITED TO:
(1) PERSONS REQUIRED TO BE LICENSED TO SELL, SOLICIT OR NEGOTIATE
SURPLUS LINES INSURANCE;
(2) INSURER ELIGIBILITY REQUIREMENTS OR OTHER APPROVED NON-ADMITTED
INSURER REQUIREMENTS;
(3) DILIGENT SEARCH; AND
(4) STATE TRANSACTION DOCUMENTATION AND CLEARINGHOUSE TRANSACTION DATA
REGARDING THE PAYMENT OF PREMIUM TAX AS SET FORTH IN THIS COMPACT AND
RULES TO BE ADOPTED BY THE COMMISSION. HOME STATE REGULATORY COMPLIANCE
REQUIREMENTS APPLICABLE TO INDEPENDENTLY PROCURED INSURANCE PLACEMENTS
SHALL INCLUDE, BUT NOT BE LIMITED TO, PROVIDING STATE TRANSACTION
DOCUMENTATION AND CLEARINGHOUSE TRANSACTION DATA REGARDING THE PAYMENT
OF PREMIUM TAX AS SET FORTH IN THIS COMPACT AND RULES TO BE ADOPTED BY
THE COMMISSION.
(E) THAT EACH COMPACTING STATE AND CONTRACTING STATE MAY CHARGE ITS
OWN RATE OF TAXATION ON THE PREMIUM ALLOCATED TO SUCH STATE BASED ON THE
APPLICABLE ALLOCATION FORMULA PROVIDED THAT THE STATE ESTABLISHES ONE
SINGLE RATE OF TAXATION APPLICABLE TO ALL NON-ADMITTED INSURANCE TRANS-
ACTIONS AND NO OTHER TAX, FEE ASSESSMENT OR OTHER CHARGE BY ANY GOVERN-
MENTAL OR QUASI-GOVERNMENTAL AGENCY BE PERMITTED. NOTWITHSTANDING THE
FOREGOING, STAMPING OFFICE FEES MAY BE CHARGED AS A SEPARATE, ADDITIONAL
COST UNLESS SUCH FEES ARE INCORPORATED INTO A STATE'S SINGLE RATE OF
TAXATION.
(F) THAT ANY CHANGE IN THE RATE OF TAXATION BY ANY COMPACTING STATE OR
CONTRACTING STATE BE RESTRICTED TO CHANGES MADE PROSPECTIVELY ON NOT
LESS THAN NINETY DAYS ADVANCE NOTICE TO THE COMPACT COMMISSION.
(G) THAT EACH COMPACTING STATE AND CONTRACTING STATE SHALL REQUIRE
PREMIUM TAX PAYMENTS EITHER ANNUALLY, SEMI-ANNUALLY OR QUARTERLY UTILIZ-
ING ONE OR MORE OF THE FOLLOWING DATES ONLY: MARCH FIRST, JUNE FIRST,
SEPTEMBER FIRST AND DECEMBER FIRST.
(H) THAT EACH COMPACTING STATE AND CONTRACTING STATE PROHIBIT ANY
OTHER STATE AGENCY OR POLITICAL SUBDIVISION FROM REQUIRING SURPLUS LINES
LICENSEES TO PROVIDE CLEARINGHOUSE TRANSACTION DATA AND STATE TRANS-
S. 4869 8
ACTION DOCUMENTATION OTHER THAN TO THE INSURANCE DEPARTMENT OR TAX OFFI-
CIALS OF THE HOME STATE OR ONE SINGLE DESIGNATED AGENT THEREOF.
(I) THE OBLIGATION OF THE HOME STATE BY ITSELF, THROUGH A DESIGNATED
AGENT, SURPLUS LINES STAMPING OR SERVICE OFFICE, TO COLLECT CLEARING-
HOUSE TRANSACTION DATA FROM SURPLUS LINES LICENSEES AND FROM INSUREDS
FOR INDEPENDENTLY PROCURED INSURANCE, WHERE APPLICABLE, FOR REPORTING TO
THE CLEARINGHOUSE.
(J) A METHOD FOR THE CLEARINGHOUSE TO PERIODICALLY REPORT TO COMPACT-
ING STATES, CONTRACTING STATES, SURPLUS LINES LICENSEES AND INSUREDS WHO
INDEPENDENTLY PROCURE INSURANCE ALL PREMIUM TAXES OWED TO EACH OF THE
COMPACTING STATES AND CONTRACTING STATES, THE DATES UPON WHICH PAYMENT
OF SUCH PREMIUM TAXES ARE DUE AND A METHOD TO PAY THEM THROUGH THE
CLEARINGHOUSE.
(K) THAT EACH SURPLUS LINES LICENSEE IS REQUIRED TO BE LICENSED ONLY
IN THE HOME STATE OF EACH INSURED FOR WHOM SURPLUS LINES INSURANCE HAS
BEEN PROCURED.
(L) THAT A POLICY CONSIDERED TO BE SURPLUS LINES INSURANCE IN THE
INSURED'S HOME STATE SHALL BE CONSIDERED SURPLUS LINES INSURANCE IN ALL
COMPACTING STATES AND CONTRACTING STATES AND TAXED AS A SURPLUS LINES
TRANSACTION IN ALL STATES TO WHICH A PORTION OF THE RISK IS ALLOCATED.
EACH COMPACTING STATE AND CONTRACTING STATE SHALL REQUIRE EACH SURPLUS
LINES LICENSEE TO PAY TO EVERY OTHER COMPACTING STATE AND CONTRACTING
STATE PREMIUM TAXES ON EACH MULTI-STATE RISK THROUGH THE CLEARINGHOUSE
AT SUCH TAX RATE CHARGED ON SURPLUS LINES TRANSACTIONS IN SUCH OTHER
COMPACTING STATES AND CONTRACTING STATES ON THE PORTION OF THE RISK IN
EACH SUCH COMPACTING STATE AND CONTRACTING STATE AS DETERMINED BY THE
APPLICABLE UNIFORM ALLOCATION FORMULA ADOPTED BY THE COMMISSION. A POLI-
CY CONSIDERED TO BE INDEPENDENTLY PROCURED INSURANCE IN THE INSURED'S
HOME STATE SHALL BE CONSIDERED INDEPENDENTLY PROCURED INSURANCE IN ALL
COMPACTING STATES AND CONTRACTING STATES. EACH COMPACTING STATE AND
CONTRACTING STATE SHALL REQUIRE THE INSURED TO PAY EVERY OTHER COMPACT-
ING STATE AND CONTRACTING STATE THE INDEPENDENTLY PROCURED INSURANCE
PREMIUM TAX ON EACH MULTI-STATE RISK THROUGH THE CLEARINGHOUSE PURSUANT
TO THE UNIFORM ALLOCATION FORMULA ADOPTED BY THE COMMISSION.
(M) UNIFORM FOREIGN INSURER ELIGIBILITY REQUIREMENTS AS AUTHORIZED BY
THE NRRA.
(N) A UNIFORM POLICYHOLDER NOTICE.
(O) UNIFORM TREATMENT OF PURCHASING GROUP SURPLUS LINES INSURANCE
PLACEMENTS.
S 2906. POWERS OF THE COMMISSION. THE COMMISSION SHALL HAVE THE
FOLLOWING POWERS:
(A) TO PROMULGATE RULES AND OPERATING PROCEDURES, PURSUANT TO SECTION
TWO THOUSAND NINE HUNDRED NINE OF THIS ARTICLE, WHICH SHALL HAVE THE
FORCE AND EFFECT OF LAW AND SHALL BE BINDING IN THE COMPACTING STATES TO
THE EXTENT AND IN THE MANNER PROVIDED IN THIS ARTICLE;
(B) TO BRING AND PROSECUTE LEGAL PROCEEDINGS OR ACTIONS IN THE NAME OF
THE COMMISSION, PROVIDED THAT THE STANDING OF ANY STATE INSURANCE
DEPARTMENT TO SUE OR BE SUED UNDER APPLICABLE LAW SHALL NOT BE AFFECTED;
(C) TO ISSUE SUBPOENAS REQUIRING THE ATTENDANCE AND TESTIMONY OF
WITNESSES AND THE PRODUCTION OF EVIDENCE, PROVIDED HOWEVER, THE COMMIS-
SION IS NOT EMPOWERED TO DEMAND OR SUBPOENA RECORDS OR DATA FROM NON-AD-
MITTED INSURERS;
(D) TO ESTABLISH AND MAINTAIN OFFICES, INCLUDING THE CREATION OF A
CLEARINGHOUSE FOR THE RECEIPT OF PREMIUM TAX AND CLEARINGHOUSE TRANS-
ACTION DATA REGARDING NON-ADMITTED INSURANCE OF MULTI-STATE RISKS,
SINGLE-STATE RISKS FOR STATES WHICH ELECT TO REQUIRE SURPLUS LINES
S. 4869 9
LICENSEES TO PAY PREMIUM TAX ON SINGLE-STATE RISKS THROUGH THE CLEARING-
HOUSE AND TAX REPORTING FORMS;
(E) TO PURCHASE AND MAINTAIN INSURANCE AND BONDS;
(F) TO BORROW, ACCEPT OR CONTRACT FOR SERVICES OF PERSONNEL, INCLUD-
ING, BUT NOT LIMITED TO, EMPLOYEES OF A COMPACTING STATE OR STAMPING
OFFICE, PURSUANT TO AN OPEN, TRANSPARENT, OBJECTIVE COMPETITIVE PROCESS
AND PROCEDURE ADOPTED BY THE COMMISSION;
(G) TO HIRE EMPLOYEES, PROFESSIONALS OR SPECIALISTS AND ELECT OR
APPOINT OFFICERS AND TO FIX THEIR COMPENSATION, DEFINE THEIR DUTIES AND
GIVE THEM APPROPRIATE AUTHORITY TO CARRY OUT THE PURPOSES OF THE COMPACT
AND DETERMINE THEIR QUALIFICATIONS, PURSUANT TO AN OPEN, TRANSPARENT,
OBJECTIVE COMPETITIVE PROCESS AND PROCEDURE ADOPTED BY THE COMMISSION;
AND TO ESTABLISH THE COMMISSION'S PERSONNEL POLICIES AND PROGRAMS RELAT-
ING TO CONFLICTS OF INTEREST, RATES OF COMPENSATION AND QUALIFICATIONS
OF PERSONNEL AND OTHER RELATED PERSONNEL MATTERS;
(H) TO ACCEPT ANY AND ALL APPROPRIATE DONATIONS AND GRANTS OF MONEY,
EQUIPMENT, SUPPLIES, MATERIALS AND SERVICES AND TO RECEIVE, UTILIZE AND
DISPOSE OF THE SAME; PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL
AVOID ANY APPEARANCE OF IMPROPRIETY AND/OR CONFLICT OF INTEREST;
(I) TO LEASE, PURCHASE, ACCEPT APPROPRIATE GIFTS OR DONATIONS OF, OR
OTHERWISE TO OWN, HOLD, IMPROVE OR USE ANY PROPERTY, REAL, PERSONAL OR
MIXED; PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL AVOID ANY APPEAR-
ANCE OF IMPROPRIETY AND/OR CONFLICT OF INTEREST;
(J) TO SELL, CONVEY, MORTGAGE, PLEDGE, LEASE, EXCHANGE, ABANDON OR
OTHERWISE DISPOSE OF ANY PROPERTY, REAL, PERSONAL OR MIXED;
(K) TO PROVIDE FOR TAX AUDIT RULES AND PROCEDURES FOR THE COMPACTING
STATES WITH RESPECT TO THE ALLOCATION OF PREMIUM TAXES, INCLUDING:
(1) MINIMUM AUDIT STANDARDS, INCLUDING SAMPLING METHODS;
(2) REVIEW OF INTERNAL CONTROLS;
(3) COOPERATION AND SHARING OF AUDIT RESPONSIBILITIES BETWEEN COMPACT-
ING STATES;
(4) HANDLING OF REFUNDS OR CREDITS DUE TO OVERPAYMENTS OR IMPROPER
ALLOCATION OF PREMIUM TAXES;
(5) TAXPAYER RECORDS TO BE REVIEWED INCLUDING A MINIMUM RETENTION
PERIOD; AND
(6) AUTHORITY OF COMPACTING STATES TO REVIEW, CHALLENGE OR RE-AUDIT
TAXPAYER RECORDS.
(L) TO ENFORCE COMPLIANCE BY COMPACTING STATES AND CONTRACTING STATES
WITH RULES AND BYLAWS PURSUANT TO THE AUTHORITY SET FORTH IN SECTION TWO
THOUSAND NINE HUNDRED SEVENTEEN OF THIS ARTICLE;
(M) TO PROVIDE FOR DISPUTE RESOLUTION AMONG COMPACTING STATES AND
CONTRACTING STATES;
(N) TO ADVISE COMPACTING STATES AND CONTRACTING STATES ON TAX-RELATED
ISSUES RELATING TO INSURERS, INSUREDS, SURPLUS LINES LICENSEES, AGENTS
OR BROKERS DOMICILED OR DOING BUSINESS IN NON-COMPACTING STATES,
CONSISTENT WITH THE PURPOSES OF THIS COMPACT;
(O) TO MAKE AVAILABLE ADVICE AND TRAINING TO THOSE PERSONNEL IN STATE
STAMPING OFFICES, STATE INSURANCE DEPARTMENTS OR OTHER STATE DEPARTMENTS
FOR RECORD KEEPING, TAX COMPLIANCE AND TAX ALLOCATIONS; AND TO BE A
RESOURCE FOR STATE INSURANCE DEPARTMENTS AND OTHER STATE DEPARTMENTS;
(P) TO ESTABLISH A BUDGET AND MAKE EXPENDITURES;
(Q) TO BORROW MONEY;
(R) TO APPOINT AND OVERSEE COMMITTEES, INCLUDING ADVISORY COMMITTEES
COMPRISED OF MEMBERS, STATE INSURANCE REGULATORS, STATE LEGISLATORS OR
THEIR REPRESENTATIVES, INSURANCE INDUSTRY AND CONSUMER REPRESENTATIVES
S. 4869 10
AND SUCH OTHER INTERESTED PERSONS AS MAY BE DESIGNATED IN THIS COMPACT
AND THE BYLAWS;
(S) TO ESTABLISH AN EXECUTIVE COMMITTEE OF NOT LESS THAN SEVEN NOR
MORE THAN FIFTEEN REPRESENTATIVES, WHICH SHALL INCLUDE OFFICERS ELECTED
BY THE COMMISSION AND SUCH OTHER REPRESENTATIVES AS PROVIDED FOR HEREIN
AND DETERMINED BY THE BYLAWS. REPRESENTATIVES OF THE EXECUTIVE COMMIT-
TEE SHALL SERVE A ONE YEAR TERM. REPRESENTATIVES OF THE EXECUTIVE
COMMITTEE SHALL BE ENTITLED TO ONE VOTE EACH. THE EXECUTIVE COMMITTEE
SHALL HAVE THE POWER TO ACT ON BEHALF OF THE COMMISSION, WITH THE EXCEP-
TION OF RULEMAKING, DURING PERIODS WHEN THE COMMISSION IS NOT IN
SESSION. THE EXECUTIVE COMMITTEE SHALL OVERSEE THE DAY TO DAY ACTIVITIES
OF THE ADMINISTRATION OF THE COMPACT, INCLUDING THE ACTIVITIES OF THE
OPERATIONS COMMITTEE CREATED UNDER THIS ARTICLE AND COMPLIANCE AND
ENFORCEMENT OF THE PROVISIONS OF THE COMPACT, ITS BYLAWS AND RULES AND
SUCH OTHER DUTIES AS PROVIDED HEREIN AND AS DEEMED NECESSARY;
(T) TO ESTABLISH AN OPERATIONS COMMITTEE OF NOT LESS THAN SEVEN AND
NOT MORE THAN FIFTEEN REPRESENTATIVES TO PROVIDE ANALYSIS, ADVICE,
DETERMINATIONS AND RECOMMENDATIONS REGARDING TECHNOLOGY, SOFTWARE AND
SYSTEMS INTEGRATION TO BE ACQUIRED BY THE COMMISSION AND TO PROVIDE
ANALYSIS, ADVICE, DETERMINATIONS AND RECOMMENDATIONS REGARDING THE
ESTABLISHMENT OF MANDATORY RULES TO BE ADOPTED BY THE COMMISSION;
(U) TO ENTER INTO CONTRACTS WITH CONTRACTING STATES SO THAT CONTRACT-
ING STATES CAN UTILIZE THE SERVICES OF AND FULLY PARTICIPATE IN THE
CLEARINGHOUSE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH
CONTRACTS;
(V) TO ADOPT AND USE A CORPORATE SEAL; AND
(W) TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE NECESSARY OR APPROPRIATE
TO ACHIEVE THE PURPOSES OF THIS COMPACT CONSISTENT WITH THE STATE REGU-
LATION OF THE BUSINESS OF INSURANCE.
S 2907. ORGANIZATION OF THE COMMISSION. (A) (1) EACH COMPACTING STATE
SHALL HAVE AND BE LIMITED TO ONE MEMBER. EACH STATE SHALL DETERMINE THE
QUALIFICATIONS AND THE METHOD BY WHICH IT SELECTS A MEMBER AND SET FORTH
THE SELECTION PROCESS IN THE ENABLING PROVISION OF THE LEGISLATION WHICH
ENACTS THIS COMPACT. IN THE ABSENCE OF SUCH A PROVISION THE MEMBER SHALL
BE APPOINTED BY THE GOVERNOR OF SUCH COMPACTING STATE. ANY MEMBER MAY BE
REMOVED OR SUSPENDED FROM OFFICE AS PROVIDED BY THE LAW OF THE STATE
FROM WHICH HE OR SHE SHALL BE APPOINTED. ANY VACANCY OCCURRING IN THE
COMMISSION SHALL BE FILLED IN ACCORDANCE WITH THE LAWS OF THE COMPACTING
STATE WHEREIN THE VACANCY EXISTS.
(2) EACH MEMBER SHALL BE ENTITLED TO ONE VOTE AND SHALL OTHERWISE HAVE
AN OPPORTUNITY TO PARTICIPATE IN THE GOVERNANCE OF THE COMMISSION IN
ACCORDANCE WITH THE BYLAWS.
(3) THE COMMISSION SHALL, BY A MAJORITY VOTE OF THE MEMBERS, PRESCRIBE
BYLAWS TO GOVERN ITS CONDUCT AS MAY BE NECESSARY OR APPROPRIATE TO CARRY
OUT THE PURPOSES AND EXERCISE THE POWERS OF THE COMPACT INCLUDING, BUT
NOT LIMITED TO:
(A) ESTABLISHING THE FISCAL YEAR OF THE COMMISSION;
(B) PROVIDING REASONABLE PROCEDURES FOR HOLDING MEETINGS OF THE
COMMISSION, THE EXECUTIVE COMMITTEE, AND THE OPERATIONS COMMITTEE;
(C) PROVIDING REASONABLE STANDARDS AND PROCEDURES:
(I) FOR THE ESTABLISHMENT AND MEETINGS OF COMMITTEES, AND
(II) GOVERNING ANY GENERAL OR SPECIFIC DELEGATION OF ANY AUTHORITY OR
FUNCTION OF THE COMMISSION;
(D) PROVIDING REASONABLE PROCEDURES FOR CALLING AND CONDUCTING MEET-
INGS OF THE COMMISSION THAT CONSIST OF A MAJORITY OF COMMISSION MEMBERS,
ENSURING REASONABLE ADVANCE NOTICE OF EACH SUCH MEETING AND PROVIDING
S. 4869 11
FOR THE RIGHT OF CITIZENS TO ATTEND EACH SUCH MEETING WITH ENUMERATED
EXCEPTIONS DESIGNED TO PROTECT THE PUBLIC'S INTEREST, THE PRIVACY OF
INDIVIDUALS AND INSURERS' AND SURPLUS LINES LICENSEES' PROPRIETARY
INFORMATION, INCLUDING TRADE SECRETS. THE COMMISSION MAY MEET IN CAMERA
ONLY AFTER A MAJORITY OF THE ENTIRE MEMBERSHIP VOTES TO CLOSE A MEETING
IN TOTO OR IN PART. AS SOON AS PRACTICABLE, THE COMMISSION MUST MAKE
PUBLIC:
(I) A COPY OF THE VOTE TO CLOSE THE MEETING REVEALING THE VOTE OF EACH
MEMBER WITH NO PROXY VOTES ALLOWED, AND
(II) VOTES TAKEN DURING SUCH MEETING;
(E) ESTABLISHING THE TITLES, DUTIES AND AUTHORITY AND REASONABLE
PROCEDURES FOR THE ELECTION OF THE OFFICERS OF THE COMMISSION;
(F) PROVIDING REASONABLE STANDARDS AND PROCEDURES FOR THE ESTABLISH-
MENT OF THE PERSONNEL POLICIES AND PROGRAMS OF THE COMMISSION. NOTWITH-
STANDING ANY CIVIL SERVICE OR OTHER SIMILAR LAWS OF ANY COMPACTING
STATE, THE BYLAWS SHALL EXCLUSIVELY GOVERN THE PERSONNEL POLICIES AND
PROGRAMS OF THE COMMISSION;
(G) PROMULGATING A CODE OF ETHICS TO ADDRESS PERMISSIBLE AND PROHIBIT-
ED ACTIVITIES OF COMMISSION MEMBERS AND EMPLOYEES; AND
(H) PROVIDING A MECHANISM FOR WINDING UP THE OPERATIONS OF THE COMMIS-
SION AND THE EQUITABLE DISPOSITION OF ANY EXCESS FUNDS THAT MAY EXIST
AFTER THE TERMINATION OF THE COMPACT AFTER THE PAYMENT AND/OR RESERVING
OF ALL OF ITS DEBTS AND OBLIGATIONS;
(4) THE COMMISSION SHALL PUBLISH ITS BYLAWS IN A CONVENIENT FORM AND
FILE A COPY THEREOF AND A COPY OF ANY AMENDMENT THERETO WITH THE APPRO-
PRIATE AGENCY OR OFFICER IN EACH OF THE COMPACTING STATES.
(B) (1) AN EXECUTIVE COMMITTEE OF THE COMMISSION ("EXECUTIVE COMMIT-
TEE") SHALL BE ESTABLISHED. ALL ACTIONS OF THE EXECUTIVE COMMITTEE,
INCLUDING COMPLIANCE AND ENFORCEMENT ARE SUBJECT TO THE REVIEW AND
RATIFICATION OF THE COMMISSION AS PROVIDED IN THE BYLAWS. THE EXECUTIVE
COMMITTEE SHALL HAVE NO MORE THAN FIFTEEN REPRESENTATIVES OR ONE FOR
EACH STATE IF THERE ARE LESS THAN FIFTEEN COMPACTING STATES, WHO SHALL
SERVE FOR A TERM AND BE ESTABLISHED IN ACCORDANCE WITH THE BYLAWS.
(2) THE EXECUTIVE COMMITTEE SHALL HAVE SUCH AUTHORITY AND DUTIES AS
MAY BE SET FORTH IN THE BYLAWS, INCLUDING BUT NOT LIMITED TO:
(A) MANAGING THE AFFAIRS OF THE COMMISSION IN A MANNER CONSISTENT WITH
THE BYLAWS AND PURPOSES OF THE COMMISSION;
(B) ESTABLISHING AND OVERSEEING AN ORGANIZATIONAL STRUCTURE WITHIN AND
APPROPRIATE PROCEDURES FOR THE COMMISSION TO PROVIDE FOR THE CREATION OF
RULES AND OPERATING PROCEDURES;
(C) OVERSEEING THE OFFICES OF THE COMMISSION; AND
(D) PLANNING, IMPLEMENTING AND COORDINATING COMMUNICATIONS AND ACTIV-
ITIES WITH OTHER STATE, FEDERAL AND LOCAL GOVERNMENT ORGANIZATIONS IN
ORDER TO ADVANCE THE GOALS OF THE COMMISSION.
(3) THE COMMISSION SHALL ANNUALLY ELECT OFFICERS FROM THE EXECUTIVE
COMMITTEE, WITH EACH HAVING SUCH AUTHORITY AND DUTIES AS MAY BE SPECI-
FIED IN THE BYLAWS.
(4) THE EXECUTIVE COMMITTEE MAY, SUBJECT TO THE APPROVAL OF THE
COMMISSION, APPOINT OR RETAIN AN EXECUTIVE DIRECTOR FOR SUCH PERIOD,
UPON SUCH TERMS AND CONDITIONS AND FOR SUCH COMPENSATION AS THE COMMIS-
SION MAY DEEM APPROPRIATE. THE EXECUTIVE DIRECTOR SHALL SERVE AS SECRE-
TARY TO THE COMMISSION BUT SHALL NOT BE A MEMBER OF THE COMMISSION. THE
EXECUTIVE DIRECTOR SHALL HIRE AND SUPERVISE SUCH OTHER PERSONS AS MAY BE
AUTHORIZED BY THE COMMISSION.
(C) (1) AN OPERATIONS COMMITTEE SHALL BE ESTABLISHED. ALL ACTIONS OF
THE OPERATIONS COMMITTEE ARE SUBJECT TO THE REVIEW AND OVERSIGHT OF THE
S. 4869 12
COMMISSION AND THE EXECUTIVE COMMITTEE AND MUST BE APPROVED BY THE
COMMISSION. THE EXECUTIVE COMMITTEE WILL ACCEPT THE DETERMINATIONS AND
RECOMMENDATIONS OF THE OPERATIONS COMMITTEE UNLESS GOOD CAUSE IS SHOWN
WHY SUCH DETERMINATIONS AND RECOMMENDATIONS SHOULD NOT BE APPROVED. ANY
DISPUTES AS TO WHETHER GOOD CAUSE EXISTS TO REJECT ANY DETERMINATION OR
RECOMMENDATION OF THE OPERATIONS COMMITTEE SHALL BE RESOLVED BY THE
MAJORITY VOTE OF THE COMMISSION. THE OPERATIONS COMMITTEE SHALL HAVE NO
MORE THAN FIFTEEN REPRESENTATIVES OR ONE FOR EACH STATE IF THERE ARE
LESS THAN FIFTEEN COMPACTING STATES, WHO SHALL SERVE FOR A TERM AND
SHALL BE ESTABLISHED AS SET FORTH IN THE BYLAWS. THE OPERATIONS COMMIT-
TEE SHALL HAVE RESPONSIBILITY FOR:
(A) EVALUATING TECHNOLOGY REQUIREMENTS FOR THE CLEARINGHOUSE, ASSESS-
ING EXISTING SYSTEMS USED BY STATE REGULATORY AGENCIES AND STATE STAMP-
ING OFFICES TO MAXIMIZE THE EFFICIENCY AND SUCCESSFUL INTEGRATION OF THE
CLEARINGHOUSE TECHNOLOGY SYSTEMS WITH STATE AND STATE STAMPING OFFICE
TECHNOLOGY PLATFORMS AND TO MINIMIZE COSTS TO THE STATES, STATE STAMPING
OFFICES AND THE CLEARINGHOUSE;
(B) MAKING RECOMMENDATIONS TO THE EXECUTIVE COMMITTEE BASED ON ITS
ANALYSIS AND DETERMINATION OF THE CLEARINGHOUSE TECHNOLOGY REQUIREMENTS
AND COMPATIBILITY WITH EXISTING STATE AND STATE STAMPING OFFICE SYSTEMS;
(C) EVALUATING THE MOST SUITABLE PROPOSALS FOR ADOPTION AS MANDATORY
RULES, ASSESSING SUCH PROPOSALS FOR EASE OF INTEGRATION BY STATES AND
LIKELIHOOD OF SUCCESSFUL IMPLEMENTATION AND TO REPORT TO THE EXECUTIVE
COMMITTEE ITS DETERMINATIONS AND RECOMMENDATIONS; AND
(D) SUCH OTHER DUTIES AND RESPONSIBILITIES AS ARE DELEGATED TO IT BY
THE BYLAWS, THE EXECUTIVE COMMITTEE OR THE COMMISSION.
(2) ALL REPRESENTATIVES OF THE OPERATIONS COMMITTEE SHALL BE INDIVID-
UALS WHO HAVE EXTENSIVE EXPERIENCE AND/OR EMPLOYMENT IN THE SURPLUS
LINES INSURANCE BUSINESS, INCLUDING, BUT NOT LIMITED TO, EXECUTIVES AND
ATTORNEYS EMPLOYED BY SURPLUS LINES INSURERS, SURPLUS LINES LICENSEES,
LAW FIRMS, STATE INSURANCE DEPARTMENTS AND/OR STATE STAMPING OFFICES.
OPERATIONS COMMITTEE REPRESENTATIVES FROM COMPACTING STATES WHICH
UTILIZE THE SERVICES OF A STATE STAMPING OFFICE MUST APPOINT THE CHIEF
OPERATING OFFICER OR A SENIOR MANAGER OF THE STATE STAMPING OFFICE TO
THE OPERATIONS COMMITTEE.
(D) (1) A LEGISLATIVE COMMITTEE COMPRISED OF STATE LEGISLATORS OR
THEIR DESIGNEES SHALL BE ESTABLISHED TO MONITOR THE OPERATIONS OF AND
MAKE RECOMMENDATIONS TO THE COMMISSION, INCLUDING THE EXECUTIVE COMMIT-
TEE; PROVIDED THAT THE MANNER OF SELECTION AND TERM OF ANY LEGISLATIVE
COMMITTEE MEMBER SHALL BE AS SET FORTH IN THE BYLAWS. PRIOR TO THE
ADOPTION BY THE COMMISSION OF ANY UNIFORM STANDARD, REVISION TO THE
BYLAWS, ANNUAL BUDGET OR OTHER SIGNIFICANT MATTER AS MAY BE PROVIDED IN
THE BYLAWS, THE EXECUTIVE COMMITTEE SHALL CONSULT WITH AND REPORT TO THE
LEGISLATIVE COMMITTEE.
(2) THE COMMISSION MAY ESTABLISH ADDITIONAL ADVISORY COMMITTEES AS ITS
BYLAWS MAY PROVIDE FOR THE CARRYING OUT OF ITS FUNCTIONS.
(E) THE COMMISSION SHALL MAINTAIN ITS CORPORATE BOOKS AND RECORDS IN
ACCORDANCE WITH THE BYLAWS.
(F) (1) THE MEMBERS, OFFICERS, EXECUTIVE DIRECTOR, EMPLOYEES AND
REPRESENTATIVES OF THE COMMISSION, THE EXECUTIVE COMMITTEE AND ANY OTHER
COMMITTEE OF THE COMMISSION SHALL BE IMMUNE FROM SUIT AND LIABILITY,
EITHER PERSONALLY OR IN THEIR OFFICIAL CAPACITY, FOR ANY CLAIM FOR
DAMAGE TO OR LOSS OF PROPERTY OR PERSONAL INJURY OR OTHER CIVIL LIABIL-
ITY CAUSED BY OR ARISING OUT OF ANY ACTUAL OR ALLEGED ACT, ERROR OR
OMISSION THAT OCCURRED, OR THAT THE PERSON AGAINST WHOM THE CLAIM IS
MADE HAD A REASONABLE BASIS FOR BELIEVING OCCURRED, WITHIN THE SCOPE OF
S. 4869 13
COMMISSION EMPLOYMENT, DUTIES OR RESPONSIBILITIES; PROVIDED THAT NOTHING
IN THIS PARAGRAPH SHALL BE CONSTRUED TO PROTECT ANY SUCH PERSON FROM
SUIT AND/OR LIABILITY FOR ANY DAMAGE, LOSS, INJURY OR LIABILITY CAUSED
BY THE INTENTIONAL OR WILLFUL OR WANTON MISCONDUCT OF THAT PERSON.
(2) THE COMMISSION SHALL DEFEND ANY MEMBER, OFFICER, EXECUTIVE DIREC-
TOR, EMPLOYEE OR REPRESENTATIVE OF THE COMMISSION, THE EXECUTIVE COMMIT-
TEE OR ANY OTHER COMMITTEE OF THE COMMISSION IN ANY CIVIL ACTION SEEKING
TO IMPOSE LIABILITY ARISING OUT OF ANY ACTUAL OR ALLEGED ACT, ERROR OR
OMISSION THAT OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES
OR RESPONSIBILITIES OR THAT THE PERSON AGAINST WHOM THE CLAIM IS MADE
HAD A REASONABLE BASIS FOR BELIEVING OCCURRED WITHIN THE SCOPE OF
COMMISSION EMPLOYMENT, DUTIES OR RESPONSIBILITIES; PROVIDED THAT NOTHING
HEREIN SHALL BE CONSTRUED TO PROHIBIT THAT PERSON FROM RETAINING HIS OR
HER OWN COUNSEL; AND PROVIDED FURTHER, THAT THE ACTUAL OR ALLEGED ACT,
ERROR OR OMISSION DID NOT RESULT FROM THAT PERSON'S INTENTIONAL OR WILL-
FUL OR WANTON MISCONDUCT.
(3) THE COMMISSION SHALL INDEMNIFY AND HOLD HARMLESS ANY MEMBER, OFFI-
CER, EXECUTIVE DIRECTOR, EMPLOYEE OR REPRESENTATIVE OF THE COMMISSION,
EXECUTIVE COMMITTEE OR ANY OTHER COMMITTEE OF THE COMMISSION FOR THE
AMOUNT OF ANY SETTLEMENT OR JUDGMENT OBTAINED AGAINST THAT PERSON ARIS-
ING OUT OF ANY ACTUAL OR ALLEGED ACT, ERROR OR OMISSION THAT OCCURRED
WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR RESPONSIBILITIES OR
THAT SUCH PERSON HAD A REASONABLE BASIS FOR BELIEVING OCCURRED WITHIN
THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR RESPONSIBILITIES, PROVIDED
THAT THE ACTUAL OR ALLEGED ACT, ERROR OR OMISSION DID NOT RESULT FROM
THE INTENTIONAL OR WILLFUL OR WANTON MISCONDUCT OF THAT PERSON.
S 2908. MEETINGS AND ACTS OF THE COMMISSION. (A) THE COMMISSION SHALL
MEET AND TAKE SUCH ACTIONS AS ARE CONSISTENT WITH THE PROVISIONS OF THIS
COMPACT AND THE BYLAWS.
(B) EACH MEMBER OF THE COMMISSION SHALL HAVE THE RIGHT AND POWER TO
CAST A VOTE TO WHICH THAT COMPACTING STATE IS ENTITLED AND TO PARTIC-
IPATE IN THE BUSINESS AND AFFAIRS OF THE COMMISSION. A MEMBER SHALL VOTE
IN PERSON OR BY SUCH OTHER MEANS AS PROVIDED IN THE BYLAWS. THE BYLAWS
MAY PROVIDE FOR MEMBERS' PARTICIPATION IN MEETINGS BY TELEPHONE OR OTHER
MEANS OF COMMUNICATION.
(C) THE COMMISSION SHALL MEET AT LEAST ONCE DURING EACH CALENDAR YEAR.
ADDITIONAL MEETINGS SHALL BE HELD AS SET FORTH IN THE BYLAWS.
(D) PUBLIC NOTICE SHALL BE GIVEN OF ALL MEETINGS AND ALL MEETINGS
SHALL BE OPEN TO THE PUBLIC, EXCEPT AS SET FORTH IN THE RULES OR OTHER-
WISE PROVIDED IN THE COMPACT.
(E) THE COMMISSION SHALL PROMULGATE RULES CONCERNING ITS MEETINGS
CONSISTENT WITH THE PRINCIPLES CONTAINED IN THE GOVERNMENT IN THE
SUNSHINE ACT, 5 U.S.C. S 552B, AS MAY BE AMENDED.
(F) THE COMMISSION AND ITS COMMITTEES MAY CLOSE A MEETING, OR PORTION
THEREOF, WHERE IT DETERMINES BY MAJORITY VOTE THAT AN OPEN MEETING WOULD
BE LIKELY TO:
(1) RELATE SOLELY TO THE COMMISSION'S INTERNAL PERSONNEL PRACTICES AND
PROCEDURES;
(2) DISCLOSE MATTERS SPECIFICALLY EXEMPTED FROM DISCLOSURE BY FEDERAL
AND STATE STATUTE;
(3) DISCLOSE TRADE SECRETS OR COMMERCIAL OR FINANCIAL INFORMATION
WHICH IS PRIVILEGED OR CONFIDENTIAL;
(4) INVOLVE ACCUSING A PERSON OF A CRIME, OR FORMALLY CENSURING A
PERSON;
(5) DISCLOSE INFORMATION OF A PERSONAL NATURE WHERE DISCLOSURE WOULD
CONSTITUTE A CLEARLY UNWARRANTED INVASION OF PERSONAL PRIVACY;
S. 4869 14
(6) DISCLOSE INVESTIGATIVE RECORDS COMPILED FOR LAW ENFORCEMENT
PURPOSES; OR
(7) SPECIFICALLY RELATE TO THE COMMISSION'S ISSUANCE OF A SUBPOENA OR
ITS PARTICIPATION IN A CIVIL ACTION OR OTHER LEGAL PROCEEDING.
(G) FOR A MEETING, OR PORTION OF A MEETING, CLOSED PURSUANT TO
SUBSECTION (F) OF THIS SECTION, THE COMMISSION'S LEGAL COUNSEL OR DESIG-
NEE SHALL CERTIFY THAT THE MEETING MAY BE CLOSED AND SHALL REFERENCE
EACH RELEVANT EXEMPTIVE PROVISION. THE COMMISSION SHALL KEEP MINUTES
WHICH SHALL FULLY AND CLEARLY DESCRIBE ALL MATTERS DISCUSSED IN A MEET-
ING AND SHALL PROVIDE A FULL AND ACCURATE SUMMARY OF ACTIONS TAKEN AND
THE REASONS THEREFORE, INCLUDING A DESCRIPTION OF THE VIEWS EXPRESSED
AND THE RECORD OF A ROLL CALL VOTE. ALL DOCUMENTS CONSIDERED IN
CONNECTION WITH AN ACTION SHALL BE IDENTIFIED IN SUCH MINUTES. ALL
MINUTES AND DOCUMENTS OF A CLOSED MEETING SHALL REMAIN UNDER SEAL,
SUBJECT TO RELEASE BY A MAJORITY VOTE OF THE COMMISSION.
S 2909. RULEMAKING FUNCTIONS OF THE COMMISSION. (A) THE COMMISSION
SHALL PROMULGATE REASONABLE RULES IN ORDER TO EFFECTIVELY AND EFFICIENT-
LY ACHIEVE THE PURPOSES OF THIS COMPACT. NOTWITHSTANDING THE FOREGOING,
IN THE EVENT THE COMMISSION EXERCISES ITS RULEMAKING AUTHORITY IN A
MANNER THAT IS BEYOND THE SCOPE OF THE PURPOSES OF THIS ARTICLE OR THE
POWERS GRANTED HEREUNDER, THEN SUCH AN ACTION BY THE COMMISSION SHALL BE
INVALID AND HAVE NO FORCE OR EFFECT.
(B) RULES SHALL BE MADE PURSUANT TO A RULEMAKING PROCESS THAT SUBSTAN-
TIALLY CONFORMS TO THE MODEL STATE ADMINISTRATIVE PROCEDURE ACT OF 1981,
FOUND IN VOLUME FIFTEEN OF THE UNIFORM LAWS ANNOTATED, AS AMENDED, AS
MAY BE APPROPRIATE TO THE OPERATIONS OF THE COMMISSION.
(C) ALL RULES AND AMENDMENTS THERETO SHALL BECOME EFFECTIVE AS OF THE
DATE SPECIFIED IN EACH RULE, OPERATING PROCEDURE OR AMENDMENT.
(D) NOT LATER THAN THIRTY DAYS AFTER A RULE IS PROMULGATED, ANY PERSON
MAY FILE A PETITION FOR JUDICIAL REVIEW OF THE RULE; PROVIDED THAT THE
FILING OF SUCH A PETITION SHALL NOT STAY OR OTHERWISE PREVENT THE RULE
FROM BECOMING EFFECTIVE UNLESS THE COURT FINDS THAT THE PETITIONER HAS A
SUBSTANTIAL LIKELIHOOD OF SUCCESS. THE COURT SHALL GIVE DEFERENCE TO THE
ACTIONS OF THE COMMISSION CONSISTENT WITH APPLICABLE LAW AND SHALL NOT
FIND THE RULE TO BE UNLAWFUL IF THE RULE REPRESENTS A REASONABLE EXER-
CISE OF THE COMMISSION'S AUTHORITY.
S 2910. COMMISSION RECORDS AND ENFORCEMENT. (A) THE COMMISSION SHALL
PROMULGATE RULES ESTABLISHING CONDITIONS AND PROCEDURES FOR PUBLIC
INSPECTION AND COPYING OF ITS INFORMATION AND OFFICIAL RECORDS, EXCEPT
SUCH INFORMATION AND RECORDS INVOLVING THE PRIVACY OF INDIVIDUALS,
INSURERS, INSUREDS OR SURPLUS LINES LICENSEE TRADE SECRETS. STATE TRANS-
ACTION DOCUMENTATION AND CLEARINGHOUSE TRANSACTION DATA COLLECTED BY THE
CLEARINGHOUSE SHALL BE USED FOR ONLY THOSE PURPOSES EXPRESSED IN OR
REASONABLY IMPLIED UNDER THE PROVISIONS OF THIS COMPACT AND THE COMMIS-
SION SHALL AFFORD THIS DATA THE BROADEST PROTECTIONS AS PERMITTED BY ANY
APPLICABLE LAW FOR PROPRIETARY INFORMATION, TRADE SECRETS OR PERSONAL
DATA. THE COMMISSION MAY PROMULGATE ADDITIONAL RULES UNDER WHICH IT MAY
MAKE AVAILABLE TO FEDERAL AND STATE AGENCIES, INCLUDING LAW ENFORCEMENT
AGENCIES, RECORDS AND INFORMATION OTHERWISE EXEMPT FROM DISCLOSURE AND
MAY ENTER INTO AGREEMENTS WITH SUCH AGENCIES TO RECEIVE OR EXCHANGE
INFORMATION OR RECORDS SUBJECT TO NONDISCLOSURE AND CONFIDENTIALITY
PROVISIONS.
(B) EXCEPT AS TO PRIVILEGED RECORDS, DATA AND INFORMATION, THE LAWS OF
ANY COMPACTING STATE PERTAINING TO CONFIDENTIALITY OR NONDISCLOSURE
SHALL NOT RELIEVE ANY COMPACTING STATE MEMBER OF THE DUTY TO DISCLOSE
ANY RELEVANT RECORDS, DATA OR INFORMATION TO THE COMMISSION; PROVIDED
S. 4869 15
THAT DISCLOSURE TO THE COMMISSION SHALL NOT BE DEEMED TO WAIVE OR OTHER-
WISE AFFECT ANY CONFIDENTIALITY REQUIREMENT AND FURTHER PROVIDED THAT,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE, THE COMMISSION
SHALL NOT BE SUBJECT TO THE COMPACTING STATE'S LAWS PERTAINING TO CONFI-
DENTIALITY AND NONDISCLOSURE WITH RESPECT TO RECORDS, DATA AND INFORMA-
TION IN ITS POSSESSION. CONFIDENTIAL INFORMATION OF THE COMMISSION
SHALL REMAIN CONFIDENTIAL AFTER SUCH INFORMATION IS PROVIDED TO ANY
MEMBER, AND THE COMMISSION SHALL MAINTAIN THE CONFIDENTIALITY OF ANY
INFORMATION PROVIDED BY A MEMBER THAT IS CONFIDENTIAL UNDER THAT
MEMBER'S STATE LAW.
(C) THE COMMISSION SHALL MONITOR COMPACTING STATES FOR COMPLIANCE WITH
DULY ADOPTED BYLAWS AND RULES. THE COMMISSION SHALL NOTIFY ANY NON-COM-
PLYING COMPACTING STATE IN WRITING OF ITS NONCOMPLIANCE WITH COMMISSION
BYLAWS OR RULES. IF A NON-COMPLYING COMPACTING STATE FAILS TO REMEDY
ITS NONCOMPLIANCE WITHIN THE TIME SPECIFIED IN THE NOTICE OF NONCOMPLI-
ANCE, THE COMPACTING STATE SHALL BE DEEMED TO BE IN DEFAULT AS SET FORTH
IN SECTION TWO THOUSAND NINE HUNDRED FIFTEEN OF THIS ARTICLE.
S 2911. DISPUTE RESOLUTION. (A) BEFORE A MEMBER MAY BRING AN ACTION IN
A COURT OF COMPETENT JURISDICTION FOR VIOLATION OF ANY PROVISION, STAND-
ARD OR REQUIREMENT OF THE COMPACT, THE COMMISSION SHALL ATTEMPT, UPON
THE REQUEST OF A MEMBER, TO RESOLVE ANY DISPUTES OR OTHER ISSUES THAT
ARE SUBJECT TO THIS COMPACT AND WHICH MAY ARISE BETWEEN TWO OR MORE
COMPACTING STATES, CONTRACTING STATES OR NON-COMPACTING STATES AND THE
COMMISSION SHALL PROMULGATE A RULE PROVIDING ALTERNATIVE DISPUTE RESOL-
UTION PROCEDURES FOR SUCH DISPUTES.
(B) THE COMMISSION SHALL ALSO PROVIDE ALTERNATIVE DISPUTE RESOLUTION
PROCEDURES TO RESOLVE ANY DISPUTES BETWEEN INSUREDS OR SURPLUS LINES
LICENSEES CONCERNING A TAX CALCULATION OR ALLOCATION OR RELATED ISSUES
WHICH ARE THE SUBJECT OF THIS COMPACT.
(C) ANY ALTERNATIVE DISPUTE RESOLUTION PROCEDURES SHALL BE UTILIZED IN
CIRCUMSTANCES WHERE A DISPUTE ARISES AS TO WHICH STATE CONSTITUTES THE
HOME STATE.
S 2912. REVIEW OF COMMISSION DECISIONS. REGARDING COMMISSION DECI-
SIONS:
(A) EXCEPT AS NECESSARY FOR PROMULGATING RULES TO FULFILL THE PURPOSES
OF THIS COMPACT, THE COMMISSION SHALL NOT HAVE AUTHORITY TO OTHERWISE
REGULATE INSURANCE IN THE COMPACTING STATES.
(B) NOT LATER THAN THIRTY DAYS AFTER THE COMMISSION HAS GIVEN NOTICE
OF ANY RULE OR ALLOCATION FORMULA, ANY THIRD PARTY FILER OR COMPACTING
STATE MAY APPEAL THE DETERMINATION TO A REVIEW PANEL APPOINTED BY THE
COMMISSION. THE COMMISSION SHALL PROMULGATE RULES TO ESTABLISH PROCE-
DURES FOR APPOINTING SUCH REVIEW PANELS AND PROVIDE FOR NOTICE AND HEAR-
ING. AN ALLEGATION THAT THE COMMISSION, IN MAKING COMPLIANCE OR TAX
DETERMINATIONS ACTED ARBITRARILY, CAPRICIOUSLY OR IN A MANNER THAT IS AN
ABUSE OF DISCRETION OR OTHERWISE NOT IN ACCORDANCE WITH THE LAW, IS
SUBJECT TO JUDICIAL REVIEW IN ACCORDANCE WITH SUBSECTION (F) OF SECTION
TWO THOUSAND NINE HUNDRED FOUR OF THIS ARTICLE.
(C) THE COMMISSION SHALL HAVE AUTHORITY TO MONITOR, REVIEW AND RECON-
SIDER COMMISSION DECISIONS UPON A FINDING THAT THE DETERMINATIONS OR
ALLOCATIONS DO NOT MEET THE RELEVANT RULE. WHERE APPROPRIATE, THE
COMMISSION MAY WITHDRAW OR MODIFY ITS DETERMINATION OR ALLOCATION AFTER
PROPER NOTICE AND HEARING, SUBJECT TO THE APPEAL PROCESS SET FORTH IN
SUBSECTION (B) OF THIS SECTION.
S 2913. FINANCE. (A) THE COMMISSION SHALL PAY OR PROVIDE FOR THE
PAYMENT OF THE REASONABLE EXPENSES OF ITS ESTABLISHMENT AND ORGANIZA-
TION. TO FUND THE COST OF ITS INITIAL OPERATIONS THE COMMISSION MAY
S. 4869 16
ACCEPT CONTRIBUTIONS, GRANTS AND OTHER FORMS OF FUNDING FROM THE STATE
STAMPING OFFICES, COMPACTING STATES AND OTHER SOURCES.
(B) THE COMMISSION SHALL COLLECT A FEE PAYABLE BY THE INSURED DIRECTLY
OR THROUGH A SURPLUS LINES LICENSEE ON EACH TRANSACTION PROCESSED
THROUGH THE COMPACT CLEARINGHOUSE TO COVER THE COST OF THE OPERATIONS
AND ACTIVITIES OF THE COMMISSION AND ITS STAFF IN A TOTAL AMOUNT SUFFI-
CIENT TO COVER THE COMMISSION'S ANNUAL BUDGET.
(C) THE COMMISSION'S BUDGET FOR A FISCAL YEAR SHALL NOT BE APPROVED
UNTIL IT HAS BEEN SUBJECT TO NOTICE AND COMMENT AS SET FORTH IN SECTION
TWO THOUSAND NINE HUNDRED NINE OF THIS ARTICLE.
(D) THE COMMISSION SHALL BE REGARDED AS PERFORMING ESSENTIAL GOVERN-
MENTAL FUNCTIONS IN EXERCISING SUCH POWERS AND FUNCTIONS AND IN CARRYING
OUT THE PROVISIONS OF THIS COMPACT AND OF ANY LAW RELATING THERETO AND
SHALL NOT BE REQUIRED TO PAY ANY TAXES OR ASSESSMENTS OF ANY CHARACTER
LEVIED BY ANY STATE OR POLITICAL SUBDIVISION THEREOF UPON ANY OF THE
PROPERTY USED BY IT FOR SUCH PURPOSES OR ANY INCOME OR REVENUE THERE-
FROM, INCLUDING ANY PROFIT FROM A SALE OR EXCHANGE.
(E) THE COMMISSION SHALL KEEP COMPLETE AND ACCURATE ACCOUNTS OF ALL
ITS INTERNAL RECEIPTS, INCLUDING GRANTS AND DONATIONS AND DISBURSEMENTS
FOR ALL FUNDS UNDER ITS CONTROL. THE INTERNAL FINANCIAL ACCOUNTS OF THE
COMMISSION SHALL BE SUBJECT TO THE ACCOUNTING PROCEDURES ESTABLISHED
UNDER ITS BYLAWS. THE FINANCIAL ACCOUNTS AND REPORTS INCLUDING THE
SYSTEM OF INTERNAL CONTROLS AND PROCEDURES OF THE COMMISSION SHALL BE
AUDITED ANNUALLY BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. UPON THE
DETERMINATION OF THE COMMISSION, BUT NOT LESS FREQUENTLY THAN EVERY
THREE YEARS, THE REVIEW OF THE INDEPENDENT AUDITOR SHALL INCLUDE A
MANAGEMENT AND PERFORMANCE AUDIT OF THE COMMISSION. THE COMMISSION SHALL
MAKE AN ANNUAL REPORT TO THE GOVERNOR AND LEGISLATURE OF THE COMPACTING
STATES, WHICH SHALL INCLUDE A REPORT OF THE INDEPENDENT AUDIT. THE
COMMISSION'S INTERNAL ACCOUNTS SHALL NOT BE CONFIDENTIAL AND SUCH MATE-
RIALS MAY BE SHARED WITH THE COMMISSIONER, THE CONTROLLER OR THE STAMP-
ING OFFICE OF ANY COMPACTING STATE UPON REQUEST; PROVIDED, HOWEVER, THAT
ANY WORK PAPERS RELATED TO ANY INTERNAL OR INDEPENDENT AUDIT AND ANY
INFORMATION REGARDING THE PRIVACY OF INDIVIDUALS AND LICENSEES' AND
INSURERS' PROPRIETARY INFORMATION, INCLUDING TRADE SECRETS, SHALL REMAIN
CONFIDENTIAL.
(F) NO COMPACTING STATE SHALL HAVE ANY CLAIM TO OR OWNERSHIP OF ANY
PROPERTY HELD BY OR VESTED IN THE COMMISSION OR TO ANY COMMISSION FUNDS
HELD PURSUANT TO THE PROVISIONS OF THIS COMPACT.
(G) THE COMMISSION SHALL NOT MAKE ANY POLITICAL CONTRIBUTIONS TO
CANDIDATES FOR ELECTED OFFICE, ELECTED OFFICIALS, POLITICAL PARTIES OR
POLITICAL ACTION COMMITTEES. THE COMMISSION SHALL NOT ENGAGE IN LOBBYING
EXCEPT WITH RESPECT TO CHANGES TO THIS COMPACT.
S 2914. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT. (A) ANY STATE
IS ELIGIBLE TO BECOME A COMPACTING STATE.
(B) THE COMPACT SHALL BECOME EFFECTIVE AND BINDING UPON LEGISLATIVE
ENACTMENT OF THE COMPACT INTO LAW BY TWO COMPACTING STATES; PROVIDED,
THE COMMISSION SHALL BECOME EFFECTIVE FOR PURPOSES OF ADOPTING RULES AND
CREATING THE CLEARINGHOUSE WHEN THERE ARE A TOTAL OF TEN COMPACTING
STATES AND CONTRACTING STATES OR, ALTERNATIVELY, WHEN THERE ARE COMPACT-
ING STATES AND CONTRACTING STATES REPRESENTING GREATER THAN FORTY
PERCENT OF THE SURPLUS LINES INSURANCE PREMIUM VOLUME BASED ON RECORDS
OF THE PERCENTAGE OF SURPLUS LINES INSURANCE PREMIUM SET FORTH IN APPEN-
DIX A OF SECTION TWO THOUSAND NINE HUNDRED SEVENTEEN OF THIS ARTICLE.
THEREAFTER, IT SHALL BECOME EFFECTIVE AND BINDING AS TO ANY OTHER
COMPACTING STATE UPON ENACTMENT OF THE COMPACT INTO LAW BY THAT STATE.
S. 4869 17
NOTWITHSTANDING THE FOREGOING, THE CLEARINGHOUSE OPERATIONS AND THE DUTY
TO REPORT CLEARINGHOUSE TRANSACTION DATA SHALL BEGIN ON THE FIRST OF
JANUARY OR THE FIRST OF JULY NEXT FOLLOWING THE FIRST ANNIVERSARY OF THE
COMMISSION'S EFFECTIVE DATE. FOR STATES WHICH JOIN THE COMPACT SUBSE-
QUENT TO THE EFFECTIVE DATE, A START DATE FOR REPORTING CLEARINGHOUSE
TRANSACTION DATA SHALL BE SET BY THE COMMISSION PROVIDED SURPLUS LINES
LICENSEES AND ALL OTHER INTERESTED PARTIES RECEIVE NOT LESS THAN NINETY
DAYS ADVANCE NOTICE.
(C) AMENDMENTS TO THE COMPACT MAY BE PROPOSED BY THE COMMISSION FOR
ENACTMENT BY THE COMPACTING STATES. NO AMENDMENT SHALL BECOME EFFECTIVE
AND BINDING UPON THE COMMISSION AND THE COMPACTING STATES UNLESS AND
UNTIL ALL COMPACTING STATES ENACT THE AMENDMENT INTO LAW.
S 2915. WITHDRAWAL, DEFAULT AND TERMINATION. (A) (1) ONCE EFFECTIVE,
THE COMPACT SHALL CONTINUE IN FORCE AND REMAIN BINDING UPON EACH AND
EVERY COMPACTING STATE, PROVIDED THAT A COMPACTING STATE MAY WITHDRAW
FROM THE COMPACT ("WITHDRAWING STATE") BY ENACTING A STATUTE SPECIF-
ICALLY REPEALING THE STATUTE WHICH ENACTED THE COMPACT INTO LAW.
(2) THE EFFECTIVE DATE OF WITHDRAWAL IS THE EFFECTIVE DATE OF THE
REPEALING STATUTE. HOWEVER, THE WITHDRAWAL SHALL NOT APPLY TO ANY TAX
OR COMPLIANCE DETERMINATIONS APPROVED ON THE DATE THE REPEALING STATUTE
BECOMES EFFECTIVE, EXCEPT BY MUTUAL AGREEMENT OF THE COMMISSION AND THE
WITHDRAWING STATE UNLESS THE APPROVAL IS RESCINDED BY THE COMMISSION.
(3) THE MEMBER OF THE WITHDRAWING STATE SHALL IMMEDIATELY NOTIFY THE
EXECUTIVE COMMITTEE OF THE COMMISSION IN WRITING UPON THE INTRODUCTION
OF LEGISLATION REPEALING THIS COMPACT IN THE WITHDRAWING STATE.
(4) THE COMMISSION SHALL NOTIFY THE OTHER COMPACTING STATES OF THE
INTRODUCTION OF SUCH LEGISLATION WITHIN TEN DAYS AFTER ITS RECEIPT OF
NOTICE THEREOF.
(5) THE WITHDRAWING STATE IS RESPONSIBLE FOR ALL OBLIGATIONS, DUTIES
AND LIABILITIES INCURRED THROUGH THE EFFECTIVE DATE OF WITHDRAWAL,
INCLUDING ANY OBLIGATIONS, THE PERFORMANCE OF WHICH EXTEND BEYOND THE
EFFECTIVE DATE OF WITHDRAWAL. TO THE EXTENT THOSE OBLIGATIONS MAY HAVE
BEEN RELEASED OR RELINQUISHED BY MUTUAL AGREEMENT OF THE COMMISSION AND
THE WITHDRAWING STATE, THE COMMISSION'S DETERMINATIONS PRIOR TO THE
EFFECTIVE DATE OF WITHDRAWAL SHALL CONTINUE TO BE EFFECTIVE AND BE GIVEN
FULL FORCE AND EFFECT IN THE WITHDRAWING STATE, UNLESS FORMALLY RESCIND-
ED BY THE COMMISSION.
(6) REINSTATEMENT FOLLOWING WITHDRAWAL OF ANY COMPACTING STATE SHALL
OCCUR UPON THE EFFECTIVE DATE OF THE WITHDRAWING STATE REENACTING THE
COMPACT.
(B) (1) IF THE COMMISSION DETERMINES THAT ANY COMPACTING STATE HAS AT
ANY TIME DEFAULTED ("DEFAULTING STATE") IN THE PERFORMANCE OF ANY OF ITS
OBLIGATIONS OR RESPONSIBILITIES UNDER THIS COMPACT, THE BYLAWS OR DULY
PROMULGATED RULES, THEN AFTER NOTICE AND HEARING AS SET FORTH IN THE
BYLAWS, ALL RIGHTS, PRIVILEGES AND BENEFITS CONFERRED BY THIS COMPACT ON
THE DEFAULTING STATE SHALL BE SUSPENDED FROM THE EFFECTIVE DATE OF
DEFAULT AS FIXED BY THE COMMISSION. THE GROUNDS FOR DEFAULT INCLUDE, BUT
ARE NOT LIMITED TO, FAILURE OF A COMPACTING STATE TO PERFORM ITS OBLI-
GATIONS OR RESPONSIBILITIES AND ANY OTHER GROUNDS DESIGNATED IN COMMIS-
SION RULES. THE COMMISSION SHALL IMMEDIATELY NOTIFY THE DEFAULTING STATE
IN WRITING OF THE DEFAULTING STATE'S SUSPENSION PENDING A CURE OF THE
DEFAULT. THE COMMISSION SHALL STIPULATE THE CONDITIONS AND THE TIME
PERIOD WITHIN WHICH THE DEFAULTING STATE MUST CURE ITS DEFAULT. IF THE
DEFAULTING STATE FAILS TO CURE THE DEFAULT WITHIN THE TIME PERIOD SPECI-
FIED BY THE COMMISSION, THE DEFAULTING STATE SHALL BE TERMINATED FROM
S. 4869 18
THE COMPACT AND ALL RIGHTS, PRIVILEGES AND BENEFITS CONFERRED BY THIS
COMPACT SHALL BE TERMINATED FROM THE EFFECTIVE DATE OF TERMINATION.
(2) DECISIONS OF THE COMMISSION THAT ARE ISSUED ON THE EFFECTIVE DATE
OF TERMINATION SHALL REMAIN IN FORCE IN THE DEFAULTING STATE IN THE SAME
MANNER AS IF THE DEFAULTING STATE HAD WITHDRAWN VOLUNTARILY PURSUANT TO
SUBSECTION (A) OF THIS SECTION.
(3) REINSTATEMENT FOLLOWING TERMINATION OF ANY COMPACTING STATE
REQUIRES A REENACTMENT OF THE COMPACT.
(C) (1) THE COMPACT DISSOLVES EFFECTIVE UPON THE DATE OF THE WITH-
DRAWAL OR DEFAULT OF THE COMPACTING STATE WHICH REDUCES MEMBERSHIP IN
THE COMPACT TO ONE COMPACTING STATE.
(2) UPON THE DISSOLUTION OF THIS COMPACT, THE COMPACT BECOMES NULL AND
VOID AND SHALL HAVE NO FURTHER FORCE OR EFFECT AND THE BUSINESS AND
AFFAIRS OF THE COMMISSION SHALL BE WOUND UP AND ANY EXCESS FUNDS SHALL
BE DISTRIBUTED IN ACCORDANCE WITH THE RULES AND BYLAWS.
S 2916. SEVERABILITY AND CONSTRUCTION. (A) THE PROVISIONS OF THIS
COMPACT SHALL BE SEVERABLE AND IF ANY PHRASE, CLAUSE, SENTENCE OR
PROVISION IS DEEMED UNENFORCEABLE, THE REMAINING PROVISIONS OF THE
COMPACT SHALL BE ENFORCEABLE.
(B) THE PROVISIONS OF THIS COMPACT SHALL BE LIBERALLY CONSTRUED TO
EFFECTUATE ITS PURPOSES.
(C) THROUGHOUT THIS COMPACT THE USE OF THE SINGULAR SHALL INCLUDE THE
PLURAL AND VICE-VERSA.
(D) THE HEADINGS AND CAPTIONS OF ARTICLES, SECTIONS AND SUBSECTIONS
USED IN THIS COMPACT ARE FOR CONVENIENCE ONLY AND SHALL BE IGNORED IN
CONSTRUING THE SUBSTANTIVE PROVISIONS OF THIS COMPACT.
S 2917. BINDING EFFECT OF COMPACT AND OTHER LAWS. (A) (1) NOTHING
HEREIN PREVENTS THE ENFORCEMENT OF ANY OTHER LAW OF A COMPACTING STATE,
EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION.
(2) DECISIONS OF THE COMMISSION AND ANY RULES AND ANY OTHER REQUIRE-
MENTS OF THE COMMISSION SHALL CONSTITUTE THE EXCLUSIVE RULE OR DETERMI-
NATION APPLICABLE TO THE COMPACTING STATES. ANY LAW OR REGULATION
REGARDING NON-ADMITTED INSURANCE OF MULTI-STATE RISKS THAT IS CONTRARY
TO RULES OF THE COMMISSION IS PREEMPTED WITH RESPECT TO THE FOLLOWING:
(A) CLEARINGHOUSE TRANSACTION DATA REPORTING REQUIREMENTS;
(B) ALLOCATION FORMULA;
(C) CLEARINGHOUSE TRANSACTION DATA COLLECTION REQUIREMENTS;
(D) PREMIUM TAX PAYMENT TIME FRAMES AND RULES CONCERNING DISSEMINATION
OF DATA AMONG THE COMPACTING STATES FOR NON-ADMITTED INSURANCE OF
MULTI-STATE RISKS AND SINGLE-STATE RISKS;
(E) EXCLUSIVE COMPLIANCE WITH SURPLUS LINES LAW OF THE HOME STATE OF
THE INSURED;
(F) RULES FOR REPORTING TO A CLEARINGHOUSE FOR RECEIPT AND DISTRIB-
UTION OF CLEARINGHOUSE TRANSACTION DATA RELATED TO NON-ADMITTED INSUR-
ANCE OF MULTI-STATE RISKS;
(G) UNIFORM FOREIGN INSURERS ELIGIBILITY REQUIREMENTS;
(H) UNIFORM POLICYHOLDER NOTICE; AND
(I) UNIFORM TREATMENT OF PURCHASING GROUPS PROCURING NON-ADMITTED
INSURANCE.
(3) EXCEPT AS SET FORTH IN SUBSECTION (B) OF THIS SECTION, ANY RULE,
UNIFORM STANDARD OR OTHER REQUIREMENT OF THE COMMISSION SHALL CONSTITUTE
THE EXCLUSIVE PROVISION THAT A COMMISSIONER MAY APPLY TO COMPLIANCE OR
TAX DETERMINATIONS. NOTWITHSTANDING THE FOREGOING, NO ACTION TAKEN BY
THE COMMISSION SHALL ABROGATE OR RESTRICT:
(A) THE ACCESS OF ANY PERSON TO STATE COURTS;
S. 4869 19
(B) THE AVAILABILITY OF ALTERNATIVE DISPUTE RESOLUTION UNDER SECTION
TWO THOUSAND NINE HUNDRED ELEVEN OF THIS ARTICLE;
(C) REMEDIES AVAILABLE UNDER STATE LAW RELATED TO BREACH OF CONTRACT,
TORT OR OTHER LAWS NOT SPECIFICALLY DIRECTED TO COMPLIANCE OR TAX DETER-
MINATIONS;
(D) STATE LAW RELATING TO THE CONSTRUCTION OF INSURANCE CONTRACTS; OR
(E) THE AUTHORITY OF THE ATTORNEY GENERAL OF THE STATE, INCLUDING BUT
NOT LIMITED TO MAINTAINING ANY ACTIONS OR PROCEEDINGS, AS AUTHORIZED BY
LAW.
(B) (1) ALL LAWFUL ACTIONS OF THE COMMISSION, INCLUDING ALL RULES
PROMULGATED BY THE COMMISSION, ARE BINDING UPON THE COMPACTING STATES,
EXCEPT AS PROVIDED HEREIN.
(2) ALL AGREEMENTS BETWEEN THE COMMISSION AND THE COMPACTING STATES
ARE BINDING IN ACCORDANCE WITH THEIR TERMS.
(3) UPON THE REQUEST OF A PARTY TO A CONFLICT OVER THE MEANING OR
INTERPRETATION OF COMMISSION ACTIONS AND UPON A MAJORITY VOTE OF THE
COMPACTING STATES, THE COMMISSION MAY ISSUE ADVISORY OPINIONS REGARDING
THE MEANING OR INTERPRETATION IN DISPUTE. THIS PROVISION MAY BE IMPLE-
MENTED BY RULE AT THE DISCRETION OF THE COMMISSION.
(4) IN THE EVENT ANY PROVISION OF THIS COMPACT EXCEEDS THE CONSTITU-
TIONAL LIMITS IMPOSED ON THE LEGISLATURE OF ANY COMPACTING STATE, THE
OBLIGATIONS, DUTIES, POWERS OR JURISDICTION SOUGHT TO BE CONFERRED BY
THAT PROVISION UPON THE COMMISSION SHALL BE INEFFECTIVE AS TO THAT STATE
AND THOSE OBLIGATIONS, DUTIES, POWERS OR JURISDICTION SHALL REMAIN IN
THE COMPACTING STATE AND SHALL BE EXERCISED BY THE AGENCY THEREOF TO
WHICH THOSE OBLIGATIONS, DUTIES, POWERS OR JURISDICTION ARE DELEGATED BY
LAW IN EFFECT AT THE TIME THIS COMPACT BECOMES EFFECTIVE.
APPENDIX A
SURPLUS LINE INSURANCE PREMIUMS BY STATE
PREMIUMS BASED ON SHARE OF TOTAL
STATE TAXES PAID PREMIUMS
ALABAMA 445,746,000 1.47%
ALASKA 89,453,519 0.29%
ARIZONA 663,703,267 2.18%
ARKANSAS 201,859,750 0.66%
CALIFORNIA 5,622,450,467 18.49%
COLORADO 543,781,333 1.79%
CONNECTICUT 329,358,800 1.08%
DELAWARE 92,835,950 0.31%
FLORIDA 2,660,908,760 8.75%
GEORGIA 895,643,150 2.95%
HAWAII 232,951,489 0.77%
IDAHO 74,202,255 0.24%
ILLINOIS 1,016,504,629 3.34%
INDIANA 412,265,320 1.36%
IOWA 135,130,933 0.44%
KANSAS 160,279,300 0.53%
KENTUCKY 167,996,133 0.55%
LOUISIANA 853,173,280 2.81%
MAINE 60,111,200 0.20%
MARYLAND 434,887,600 1.43%
MASSACHUSETTS 708,640,225 2.33%
MICHIGAN 703,357,040 2.31%
MINNESOTA 393,128,400 1.29%
MISSISSIPPI 263,313,175 0.87%
MISSOURI 404,489,860 1.33%
S. 4869 20
MONTANA 64,692,873 0.21%
NEBRASKA 92,141,167 0.30%
NEVADA 354,271,514 1.17%
NEW HAMPSHIRE 102,946,250 0.34%
NEW JERSEY 1,087,994,033 3.58%
NEW MEXICO 67,608,458 0.22%
NEW YORK 2,768,618,083 9.11%
NORTH CAROLINA 514,965,060 1.69%
NORTH DAKOTA 36,223,943 0.12%
OHIO 342,000,000 1.12%
OKLAHOMA 319,526,400 1.05%
OREGON 312,702,150 1.03%
PENNSYLVANIA 780,666,667 2.57%
RHODE ISLAND 71,794,067 0.24%
SOUTH CAROLINA 412,489,825 1.36%
SOUTH DAKOTA 38,702,120 0.13%
TENNESSEE 451,775,240 1.49%
TEXAS 3,059,170,454 10.06%
UTAH 142,593,412 0.47%
VERMONT 41,919,433 0.14%
VIRGINIA 611,530,667 2.01%
WASHINGTON 739,932,050 2.43%
WEST VIRGINIA 130,476,250 0.43%
WISCONSIN 248,758,333 0.82%
WYOMING 40,526,967 0.13%
TOTAL 30,400,197,251 100.00%
S 3. Subsection (d) of section 2118 of the insurance law is amended by
adding a new paragraph 4 to read as follows:
(4) IN THE EVENT THAT THE SURPLUS LINES INSURANCE MULTISTATE COMPLI-
ANCE COMPACT ("SLIMPACT") IS ENACTED BY THIS STATE AND THE COMMISSION
CREATED THEREUNDER BECOMES ACTIVE PURSUANT TO THE PROVISION OF SLIMPACT,
THEN THIS STATE, WHEN IT IS THE HOME STATE OF THE INSURED, WILL REQUIRE
THE PAYMENT OF TAXES BE ALLOCATED BASED UPON SLIMPACT'S PROVISIONS TO
ALL OTHER STATES WHICH HAVE ADOPTED SLIMPACT; PROVIDED, HOWEVER, THAT
THIS STATE WILL APPLY ITS STATE TAX TO THE PREMIUM FOR ALL RISK EXPO-
SURES ALLOCATED TO THIS STATE AND TO RISK EXPOSURES LOCATED IN ANY
STATES WHICH HAVE NOT ENACTED SLIMPACT.
S 4. Section 9102 of the insurance law, as amended by section 14 of
part I of chapter 61 of the laws of 2011, is amended to read as follows:
S 9102. Allocation of premiums. In determining the amount of direct
premiums taxable in this state, all such premiums written, procured, or
received in this state shall be deemed written on property or risks
located or resident in this state except such premiums properly allo-
cated and reported as taxable premiums of any other state or states. IN
THE EVENT THAT THE SURPLUS LINES INSURANCE MULTISTATE COMPLIANCE COMPACT
("SLIMPACT") IS ENACTED BY THIS STATE AND THE COMMISSION CREATED THERE-
UNDER BECOMES ACTIVE PURSUANT TO THE PROVISIONS OF SLIMPACT, THEN THIS
STATE, WHEN IT IS THE HOME STATE OF THE INSURED, WILL REQUIRE THE
PAYMENT OF TAXES BE ALLOCATED BASED UPON SLIMPACT'S PROVISIONS TO ALL
OTHER STATES WHICH HAVE ADOPTED SLIMPACT; PROVIDED, HOWEVER, THAT THIS
STATE WILL APPLY ITS STATE TAX TO THE PREMIUM FOR ALL RISK EXPOSURES
ALLOCATED TO THIS STATE AND TO RISK EXPOSURES LOCATED IN ANY STATES
WHICH HAVE NOT ENACTED SLIMPACT.
S 5. Section 1552 of the tax law, as amended by section 18 of part I
of chapter 61 of the laws of 2011, is amended to read as follows:
S. 4869 21
S 1552. Allocation. Where the taxable insurance contract covers risks
located or resident both within and without this state and the taxpay-
er's home state is New York, one hundred percent of premiums shall be
allocable to this state. IN THE EVENT THAT THE SURPLUS LINES INSURANCE
MULTISTATE COMPLIANCE COMPACT ("SLIMPACT") IS ENACTED BY THIS STATE AND
THE COMMISSION CREATED THEREUNDER BECOMES ACTIVE PURSUANT TO THE
PROVISIONS OF SLIMPACT, THEN THIS STATE, WHEN IT IS THE HOME STATE OF
THE INSURED, WILL REQUIRE THE PAYMENT OF TAXES BE ALLOCATED BASED UPON
SLIMPACT'S PROVISIONS TO ALL OTHER STATES WHICH HAVE ADOPTED SLIMPACT;
PROVIDED, HOWEVER, THAT THIS STATE WILL APPLY ITS STATE TAX TO THE
PREMIUM FOR ALL RISK EXPOSURES ALLOCATED TO THIS STATE AND TO RISK EXPO-
SURES LOCATED IN ANY STATES WHICH HAVE NOT ENACTED SLIMPACT.
S 6. This act shall take effect October 19, 2011; provided, however,
that if the amendments to section 9102 of the insurance law and section
1552 of the tax law made by sections 14 and 18 of Part I of chapter 61
of the laws of 2011, respectively, shall not have taken effect on or
before such date, then sections four and five of this act shall take
effect on the same date and in the same manner as such sections take
effect pursuant to section 19 of Part I of chapter 61 of the laws of
2011, takes effect.
