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Senate Bill 951 |
Senate Author: Carona |
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Effective: 6-14-13 |
House Sponsor: Eiland |
Senate Bill 951 amends the Insurance Code to change the applicability of statutory provisions regulating surplus lines insurance to make such provisions applicable to surplus lines insurance if the home state of the insured, as that term is defined by the bill, is Texas.
State law conditions an eligible surplus lines insurer's authority to provide surplus lines insurance on whether the full amount of required insurance cannot be obtained, after a diligent effort, from an insurer authorized to write and actually writing that kind and class of insurance in Texas. Senate Bill 951 specifies that such law is inapplicable to insurance procured for an exempt commercial purchaser if the agent procuring or placing the insurance discloses to the exempt commercial purchaser certain information regarding comparable insurance that may be available from the admitted market and if, after receiving such notice, the exempt commercial purchaser requests in writing that the agent procure the insurance from or place the insurance with an eligible surplus lines insurer. The bill requires the surplus lines agent to include evidence establishing that the insured qualified as an exempt commercial purchaser and that the agent complied with the exemption criteria in the record maintained by the agent for the surplus lines contract. The bill defines "exempt commercial purchaser" and requires the commissioner of insurance to periodically make certain adjustments to that definition.
Senate Bill 951 requires an alien surplus lines insurer to be listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department, National Association of Insurance Commissioners. The bill exempts a listed alien surplus lines insurer from a requirement for an eligible surplus lines insurer to maintain capital and surplus in an amount of at least $15 million and removes provisions prescribing minimum capital and surplus requirements for an eligible surplus lines insurer that is an insurance exchange created by the laws of another state. The bill removes provisions requiring an alien surplus lines insurer to satisfy certain trust fund requirements.
Senate Bill 951 requires an insurer to comply with all applicable nationwide uniform standards for surplus lines eligibility adopted by Texas in accordance with federal law in order to issue surplus lines insurance in Texas.
Senate Bill 951 repeals certain eligibility requirements for surplus lines insurers relating to good reputation and prompt service; competence, trustworthiness, and experience; statutory penalty payment; and premium tax payment. The bill repeals provisions authorizing an insurer group that includes unincorporated individual insurers to maintain a trust fund that meets certain criteria as an alternative to complying with the prescribed minimum capital and surplus requirements for surplus lines insurers. The bill repeals provisions that establish certain conditions under which the commissioner is authorized or required, as applicable, to exempt an eligible surplus lines insurer from the prescribed minimum capital and surplus requirements.