14VAC5-350 Rules Governing Surplus Lines Insurance

REGULATIONS

Vol. 27 Iss. 17 - April 25, 2011

TITLE 14. INSURANCE

STATE CORPORATION COMMISSION

Chapter 350

Proposed Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is exempt from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Title of Regulation: 14VAC5-350. Rules Governing Surplus Lines Insurance (repealing 14VAC5-350-10 through 14VAC5-350-220).

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.

Public Hearing Information: A public hearing will be held upon request.

Public Comment Deadline: May 9, 2011.

Agency Contact: Katie Johnson, Coordinator of Special Projects, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

The General Assembly passed House Bill 2286 (Chapter 498 of the 2011 Acts of Assembly) effective July 1, 2011, which changes how surplus lines brokers pay premium taxes. Consequently, the Rules Governing Surplus Lines Insurance are no longer needed and should be repealed. In addition, the forms used by surplus lines brokers are on the website for the State Corporation Commission's Bureau of Insurance, and surplus lines brokers are notified of changes by administrative letter.

AT RICHMOND, MARCH 30, 2011

COMMONWEALTH OF VIRGINIA

At the relation of the

STATE CORPORATION COMMISSION

CASE NO. INS-2011-00049

Ex Parte: In the matter of Repealing the
Rules Governing Surplus Lines Insurance

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code") provides that the State Corporation Commission ("Commission") shall have the power to promulgate rules and regulations in the enforcement and administration of all laws within its jurisdiction, and § 38.2-223 of the Code provides that the Commission may issue any rules and regulations necessary or appropriate for the administration and enforcement of Title 38.2 of the Code of Virginia. Section 38.2-4813 of the Code provides that the Commission may make, approve, and adopt rules and regulations to effect the purposes of Chapter 48 of Title 38.2 of the Code. The rules and regulations issued by the Commission pursuant to §§ 38.2-223 and 38.2-4813 of the Code are set forth in Title 14 of the Virginia Administrative Code.

The Bureau of Insurance ("Bureau") has submitted to the Commission a proposal to repeal Chapter 350 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Surplus Lines Insurance" ("Rules"), which are set out at 14 VAC 5-350-10 through 14 VAC 5-350-220.

The proposed repeal is necessitated by the passage of House Bill 2286 during the 2011 Virginia General Assembly Session, which amended Chapter 48 of Title 38.2 of the Code making it administrable without the Rules. The provisions of House Bill 2286 implement provisions of the federal Nonadmitted and Reinsurance Reform Act of 2010, which requires states to adopt nationwide uniform requirements, forms and procedures for the reporting, payment, collection, and allocation of insurance premium license taxes for nonadmitted insurance.¹

The Commission is of the opinion that the Rules contained in Chapter 350 of Title 14 of the Virginia Administrative Code should be considered for repeal with an effective date of July 1, 2011.

Accordingly, IT IS ORDERED THAT:

(1) The proposal that Chapter 350 of Title 14 of the Virginia Administrative Code set out at 14 VAC 5-350-10 through 14 VAC 5-350-220 be repealed shall be attached hereto and made a part hereof.

(2) All interested persons who desire to comment in support of or in opposition to, or request a hearing to oppose the proposed repeal of the regulations shall file such comments or hearing request on or before May 9, 2011, in writing, with Joel H. Peck, Clerk, State Corporation Commission, c/o Document Control Center, 1300 East Main Street, First Floor, Richmond, Virginia 23219, and shall refer to Case No. INS-2011-00049. Interested persons desiring to submit comments electronically may do so by following the instructions available at the Commission's website: http://www.scc.virginia.gov/case.

(3) If no written request for a hearing on the proposed repeal of the regulations is filed on or before May 9, 2011, the Commission, upon consideration of any comments submitted in support of or in opposition to the proposed repeal of the regulations, may adopt the proposed repeal of the regulations as submitted by the Bureau.

(4) The Commission's Division of Information Resources forthwith shall cause a copy of this Order, together with the proposal to repeal the regulations, to be forwarded to the Virginia Registrar for appropriate publication in the Virginia Register of Regulations and shall make available this Order and the attached proposal to repeal the regulations on the Commission's website: http://www.scc.virginia.gov/case.

(5) AN ATTESTED COPY hereof, together with a copy of the proposed repeal of the regulations, shall be sent by the Clerk of the Commission to the Bureau in care of Deputy Commissioner Brian P. Gaudiose, who forthwith shall give further notice of the proposed revised regulations by mailing a copy of this Order, together with the proposal to repeal the regulations, to all licensed surplus lines brokers, surplus lines insurers and certain interested parties designated by the Bureau.

(6) The Bureau shall file with the Clerk of the Commission an affidavit of compliance with the notice requirements of Ordering Paragraph (5) above.

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¹ 111 P.L. 203.

VA.R. Doc. No. R11-2765; Filed March 31, 2011, 10:32 a.m.