BILL ANALYSIS |
C.S.H.B. 1405 |
By: Smithee |
Insurance |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Current law designates the surplus lines agent of record as the party responsible for paying the surplus lines insurance premium tax. Interested parties report that the designation of a responsible party is clear in a transaction involving only one licensed surplus lines agent; however, there often are transactions involving more than one agent holding a surplus lines insurance license. One agent may exercise underwriting authority for the carrier, and another agent or broker may be responsible for interacting with the insured. Interested parties contend that the various roles surplus lines agents can assume may create uncertainty as to who is responsible for filing taxes, retaining information, or performing other agent duties.
C.S.H.B. 1405 seeks to clarify who is responsible for filing surplus lines insurance premium taxes and who is responsible for performing other required agent duties, in instances where there is more than one surplus lines agent, by allowing the surplus lines agent and a managing underwriter to enter into a written agreement at or before the time coverage is bound under the policy.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 1405 amends the Insurance Code to require a managing underwriter, rather than a surplus lines agent, to collect, report, and pay the surplus lines insurance premium tax if the surplus lines agent places an insurance policy with the managing underwriter. The bill authorizes the surplus lines agent and the managing underwriter to enter into a written agreement, at or before the time coverage is bound under a policy, providing that the surplus lines agent, rather than the managing underwriter, is responsible for the filing, reporting, collection, payment, and all other requirements under statutory provisions relating to the surplus lines insurance premium tax and under statutory provisions relating to surplus lines insurance in general. The bill authorizes the agreement to apply to multiple policies or to all policies between a surplus lines agent and a managing underwriter. The bill includes such an agreement between a surplus lines agent and a managing underwriter among the records that the surplus lines agent and managing underwriter are required to maintain regarding each surplus lines contract obtained by the agent or placed with the managing underwriter, as applicable.
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EFFECTIVE DATE
January 1, 2014.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 1405 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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