Title IN, Insurance Code

Sec. 981.001. PURPOSE. (a) An insurance transaction that is entered into by a resident of this state with an eligible surplus lines insurer through a surplus lines agent because of difficulty in obtaining coverage from an authorized insurer is a matter of public interest. (b) The…

Sec. 981.002. DEFINITIONS. In this chapter: (1) "Affiliate" means, with respect to determining the home state of an insured, and solely for the purpose of determining whether an entity is another entity's affiliate, a person or entity that controls, is controlled by, or is under …

Sec. 981.003. APPLICABILITY OF CHAPTER. This chapter applies to surplus lines insurance if the home state of the insured is this state. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 595 (S.B. 951), Sec. 3, eff. Jun…

Sec. 981.0031. EXEMPT COMMERCIAL PURCHASER DEFINED. (a) For purposes of this chapter, "exempt commercial purchaser" means a person who purchases commercial insurance and, at the time of placement: (1) employs or retains a qualified risk manager to negotiate insurance coverage; (2…

Sec. 981.0032. QUALIFIED RISK MANAGER DEFINED. For purposes of this chapter, "qualified risk manager" means, with respect to a policyholder of commercial insurance, a person who: (1) is an employee of, or third-party consultant retained by, a commercial policyholder; (2) provides…

Sec. 981.0033. INDUSTRIAL INSURED DEFINED. For purposes of this chapter, "industrial insured" means a person who purchases commercial insurance and, at the time of placement: (1) employs or retains a qualified risk manager to negotiate insurance coverage; and (2) either: (A) has …

Sec. 981.004. SURPLUS LINES INSURANCE AUTHORIZED. (a) An eligible surplus lines insurer may provide surplus lines insurance only if: (1) the full amount of required insurance cannot be obtained, after a diligent effort, from an insurer authorized to write and actually writing tha…

Sec. 981.005. VALIDITY OF CONTRACTS. (a) Unless a material and intentional violation of this chapter or Chapter 225 exists, an insurance contract obtained from an eligible surplus lines insurer is: (1) valid and enforceable as to all parties; and (2) recognized in the same manner…

Sec. 981.006. SANCTIONS. Chapter 82 applies to a surplus lines agent or an eligible surplus lines insurer that violates: (1) this chapter; (2) Chapter 225; or (3) a rule or order adopted under Subchapter B or B-1 or Section 981.005. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1…

Sec. 981.007. LIABILITY OF SURPLUS LINES INSURER FOR LOSSES AND UNEARNED PREMIUMS. (a) This section applies if: (1) an eligible surplus lines insurer has assumed a risk under this chapter; and (2) the surplus lines agent who placed the insurance has received the premium for that …

Sec. 981.008. SURPLUS LINES INSURANCE PREMIUM TAX. The premiums charged for surplus lines insurance are subject to the premium tax, if applicable, imposed under Chapter 225. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by: Acts 2007, 80th Leg., R.S.…

Sec. 981.009. RULES. The commissioner may adopt rules to implement this chapter or satisfy requirements under federal law or regulations. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.228(a), eff. Sept. 1, …

Sec. 981.051. AUTHORIZATION REQUIRED. (a) Before an insurer may issue surplus lines insurance, the insurer must hold an authorization to engage in the business of insurance from its domiciliary state or country. (b) The authorization from the domiciliary state or country must be …

Sec. 981.054. CERTAIN PRECONDITIONS NOT ALLOWED. An eligible surplus lines insurer may not require as a condition precedent to writing new or renewal surplus lines insurance that the insured or prospective insured place with the insurer other insurance that is not obtainable as s…

Sec. 981.057. MINIMUM CAPITAL AND SURPLUS REQUIREMENTS. (a) Except as provided by Subsection (b), an eligible surplus lines insurer must maintain capital and surplus in an amount of at least $15 million. (b) Subsection (a) does not apply to alien surplus lines insurers listed on …

Sec. 981.058. ALIEN INSURERS. An alien surplus lines insurer must be listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department, National Association of Insurance Commissioners. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June …

Sec. 981.063. COMMISSIONER OR DEPARTMENT NOT RESPONSIBLE FOR DETERMINING UNAUTHORIZED INSURER'S FINANCIAL CONDITION OR CLAIMS PRACTICES. This subchapter does not impose on the commissioner or department a responsibility to determine the actual financial condition or claims practi…

Sec. 981.064. COMMISSIONER MAY ORDER REVOCATION OF CONTRACTS. The commissioner may order the revocation of an insurance contract issued by an eligible surplus lines insurer that does not meet the eligibility requirements of this subchapter. Added by Acts 2001, 77th Leg., ch. 1419…

Sec. 981.065. APPLICABILITY TO CONTRACT EXTENSION. This subchapter and Sections 981.101(b), 981.210, and 981.211 apply to an extension of an insurance contract beyond its original expiration date. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 981.066. UNIFORM STANDARDS. To issue surplus lines insurance in this state, an insurer must comply with all applicable nationwide uniform standards adopted by this state in accordance with 15 U.S.C. Section 8204. Added by Acts 2013, 83rd Leg., R.S., Ch. 595 (S.B. 951), Sec. …

Sec. 981.071. DEFINITION. In this subchapter, "domestic surplus lines insurer" means an insurance company designated as a domestic surplus lines insurer under Section 981.072. Added by Acts 2017, 85th Leg., R.S., Ch. 854 (H.B. 2492), Sec. 5, eff. January 1, 2018.

Sec. 981.072. DESIGNATION AS DOMESTIC SURPLUS LINES INSURER. (a) A property and casualty insurance company organized under Chapter 822 that has capital and surplus in an amount described by Section 981.057 may apply to the department in a form and manner prescribed by the commiss…

Sec. 981.073. APPLICABILITY OF OTHER LAW; CONFLICTS. (a) Except as provided by Subsection (b), a domestic surplus lines insurer is subject to: (1) this chapter; and (2) all other insurance laws, including Title 4, applicable to a property and casualty insurance company organized …

Sec. 981.074. AUTHORIZED BUSINESS. (a) A domestic surplus lines insurer may only insure a risk in this state if: (1) the insurance is procured as eligible surplus lines insurance under this chapter; and (2) the insurance is a kind of insurance the insurer is authorized to write u…

Sec. 981.075. TAXES IMPOSED. (a) The premium for a surplus lines policy written under this subchapter is subject to the premium tax, if applicable, imposed under Chapter 225. (b) A domestic surplus lines insurer is subject to an applicable maintenance tax as if the domestic surpl…

Sec. 981.076. REQUIREMENTS FOR DOMESTIC SURPLUS LINES DOCUMENTS. (a) In this section, "surplus lines document" has the meaning assigned by Section 981.101. (b) A surplus lines document issued by a domestic surplus lines insurer must include a statement in the form and manner prov…

Sec. 981.077. REDOMESTICATION. A foreign insurer may redomesticate to this state as a domestic surplus lines insurer as provided by Chapter 983 if the foreign insurer qualifies under Section 981.072. Added by Acts 2017, 85th Leg., R.S., Ch. 854 (H.B. 2492), Sec. 5, eff. January 1…

Sec. 981.101. REQUIREMENTS FOR SURPLUS LINES DOCUMENTS. (a) In this section, "surplus lines document" means each new or renewal insurance contract, certificate, cover note, or other confirmation of insurance obtained and delivered as surplus line coverage under this chapter. (b) …

Sec. 981.102. LIMIT ON USE OF SURPLUS LINES POLICY OR CONTRACT FORMS. A surplus lines insurance policy or contract form may not be used unless use of the form is: (1) reasonably necessary for the principal purposes of the insurance coverage; or (2) not contrary to the purposes of…

Sec. 981.103. DELIVERY TO INSURED OF SURPLUS LINES DOCUMENTS. (a) On placing new or renewal surplus lines coverage, a surplus lines agent shall promptly issue and deliver to the insured or to the insured's agent the following evidence of insurance: (1) the policy issued by the in…

Sec. 981.104. DELIVERY TO INSURED OF REVISED SURPLUS LINES DOCUMENTS. (a) A surplus lines agent shall promptly deliver to the insured a substitute certificate, cover note, confirmation, or endorsement for the original document showing the current status of the coverage and the in…

Sec. 981.105. FILING WITH STAMPING OFFICE. (a) Not later than the 60th day after the later of the effective date or the issue date of new or renewal surplus lines insurance, a surplus lines agent responsible under Section 225.006 for the filing, reporting, collection, payment, an…

Sec. 981.151. STATUS AS NONPROFIT ASSOCIATION. The Surplus Lines Stamping Office of Texas is a nonprofit association. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 981.152. BOARD OF DIRECTORS. (a) The board of directors of the stamping office exercises the powers of the office. (b) The board consists of nine members appointed by the commissioner. Four members must represent the public and have a minimum of three years of experience in …

Sec. 981.153. PLAN OF OPERATION. (a) The procedures to administer the stamping office are established by a plan of operation approved by the commissioner. The plan of operation establishes the terms of the members of the board of directors of the office. (b) The stamping office s…

Sec. 981.154. POWERS AND DUTIES. (a) The stamping office shall perform its functions under the plan of operation. (b) The stamping office shall conduct the following activities as provided in the plan of operation: (1) receive, record, and review each surplus lines insurance cont…

Sec. 981.155. SUPERVISION BY COMMISSIONER. The commissioner shall supervise the stamping office. The stamping office is subject to the applicable provisions of this code and rules of the commissioner. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 981.156. EXAMINATION BY COMMISSIONER. (a) The commissioner shall examine the stamping office at any time the commissioner considers an examination necessary. (b) The stamping office shall pay the cost of the examination. (c) During an examination, a stamping office board mem…

Sec. 981.157. IMMUNITY FROM LIABILITY. A person or entity is not liable for, and a cause of action does not arise out of, an act or omission in performing a power or duty under this subchapter if the person or entity is: (1) the stamping office or a board member, officer, agent, …

Sec. 981.158. EXEMPTION FROM PUBLIC INFORMATION LAW. (a) An individual surplus lines insurance contract filed with the stamping office is: (1) confidential; and (2) not public information under Chapter 552, Government Code. (b) This section does not prevent access by a state agen…

Sec. 981.159. EXEMPTION FROM LIBRARY AND ARCHIVES LAW. Chapter 441, Government Code, does not apply to the stamping office or its records. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

Sec. 981.160. NO ENFORCEMENT AUTHORITY. This subchapter does not give the stamping office authority to enforce this chapter or Chapter 225. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.130…

Sec. 981.201. DEFINITION. In this subchapter, "managing general agent" means an agent licensed under Chapter 4053. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.131, eff. April 1, 2009.

Sec. 981.202. SURPLUS LINES LICENSE REQUIRED. An agent licensed by this state may not issue or cause to be issued an insurance contract with an eligible surplus lines insurer unless the agent possesses a surplus lines license issued by the department. Added by Acts 2001, 77th Leg…

Sec. 981.203. QUALIFICATIONS FOR SURPLUS LINES LICENSE. (a) The department may issue a surplus lines license to an applicant who the department determines complies with Subsection (b) and is: (1) an individual who: (A) has passed an examination under Chapter 4002 and department r…

Sec. 981.204. CLASSIFICATION OF SURPLUS LINES AGENTS. The department may classify surplus lines agents and issue a surplus lines license to an agent in accordance with: (1) a classification created under this section; and (2) reasonable rules of the commissioner. Added by Acts 20…