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A BILL TO BE ENTITLED
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AN ACT
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relating to provision of surplus lines insurance. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 981.004, Insurance Code, is amended to |
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read as follows: |
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Sec. 981.004. SURPLUS LINES INSURANCE AUTHORIZED. (a) An |
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eligible surplus lines insurer may provide surplus lines insurance |
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only if: |
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(1) the full amount of required insurance cannot be |
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obtained, after a diligent effort, from an insurer authorized to |
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write and actually writing that kind and class of insurance in this |
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state; |
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(2) the insurance is placed through a surplus lines |
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agent licensed in accordance with Section 981.203; and |
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(3) the insurer meets the eligibility requirements of |
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Subchapter B as of the inception date and annual anniversary date of |
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each insurance contract, cover note, or other confirmation of |
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insurance. |
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(b) The commissioner shall by order declare eligible for |
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placement with a surplus lines insurer and exempt from all |
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requirements any kind of insurance coverage or risk for which the |
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commissioner finds, after a public hearing, that there is not a |
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reasonable or adequate market among authorized insurers. The |
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commissioner or the commissioner's designee shall maintain an |
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export list showing the exempt coverages and risks. |
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(c) A public hearing under Subsection (b) must be held at |
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least annually, and may be held more frequently at the |
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commissioner's discretion. Reasonable notice of each hearing shall |
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be given to all interested parties, including agents, authorized |
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insurers, trade associations representing authorized and |
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unauthorized insurers, and consumer groups. |
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(d) An order by the commissioner under this section shall |
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continue in effect until terminated by the commissioner. |
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(e) If, before a hearing under Subsection (b), the |
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commissioner receives written comments or testimony or otherwise |
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determines that a kind of insurance on the export list is more |
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available in the admitted market, the commissioner may remove that |
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kind of insurance from the list. The eligibility of any kind of |
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insurance to remain on the list is subject to an annual affirmative |
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finding by the commissioner, except that if written comments or |
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testimony regarding the eligibility of a kind of insurance to be on |
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the list are received before a hearing, the eligibility of that kind |
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of insurance to remain on the export list shall be reviewed at the |
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next hearing and that kind of insurance may not remain on the export |
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list unless the commissioner or the commissioner's designee makes |
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an affirmative determination that there is not a reasonable or |
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adequate market among authorized insurers. |
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(f) The commissioner or the commissioner's designee shall |
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notify all surplus lines agents of any removal of a kind of |
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insurance from the list [An eligible surplus lines insurer may
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provide surplus lines insurance only in the amount that exceeds the
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amount of insurance obtainable from authorized insurers]. |
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SECTION 2. Section 981.101(b), Insurance Code, as effective |
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April 1, 2009, is amended to read as follows: |
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(b) A surplus lines document must state, in 11-point type, |
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the following: |
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This insurance contract is with an insurer not |
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licensed to transact insurance in this state and is |
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issued and delivered as surplus line coverage under |
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the Texas insurance statutes. The Texas Department of |
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Insurance does not review or approve policy forms used |
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by the insurer providing this coverage, nor does it |
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audit the finances or review the solvency of the |
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[surplus lines] insurer [providing this coverage], and |
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the insurer is not a member of the property and |
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casualty insurance guaranty association created under |
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Chapter 462, Insurance Code. Chapter 225, Insurance |
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Code, requires payment of a __________ (insert |
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appropriate tax rate) percent tax on gross premium. |
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SECTION 3. The change in law made by this Act applies only |
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to surplus lines insurance coverage delivered, issued for delivery, |
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or renewed on or after January 1, 2010. Surplus lines insurance |
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coverage delivered, issued for delivery, or renewed before January |
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1, 2010, is governed by the law in effect immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 4. This Act takes effect September 1, 2009. |