The reinsurance industry, which insures insurance companies, helps to stabilize primary insurers through periods of overwhelming claims like Hurricane Katrina. A second insurance sector, the so-called surplus lines insurance industry, provides coverage for things that are unique, dangerous or too risky for standard insurers like coverage for a pro athlete's hands or legs.
Both industries have spent several years promoting legislation that would streamline and modernize their interstate and international regulation. Financial reform incorporates those measures into the legislation.
"It mainly has to do with taxes," says Mike Ardis, spokesman for the National Association of Professional Surplus Lines Offices, Ltd. in Kansas City, Mo., referring to the state taxes that brokers pay on the insurance policies they sell.
"This reverts to a single-state payment system, where if you have a business in several states, you will only pay premium taxes to the home state of the insured rather than trying to allocate them among the various states," Ardis says.
Impact on consumers: Small businesses and professional athletes may see some benefit in "surplus lines" coverage. "This should help consumers get their insurance quicker and reduce the cost for our members to process a transaction," says Ardis.