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AN ACT
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relating to the provision of surplus lines insurance to certain |
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commercial insureds. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 981, Insurance Code, is |
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amended by adding Section 981.0033 to read as follows: |
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Sec. 981.0033. INDUSTRIAL INSURED DEFINED. For purposes of |
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this chapter, "industrial insured" means a person who purchases |
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commercial insurance and, at the time of placement: |
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(1) employs or retains a qualified risk manager to |
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negotiate insurance coverage; and |
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(2) either: |
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(A) has paid aggregate nationwide commercial |
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property and casualty insurance premiums of more than $25,000 in |
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the immediately preceding 12 months; or |
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(B) employs at least 25 full-time employees. |
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SECTION 2. Section 981.004, Insurance Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) Subsection (a)(1) does not apply to insurance procured |
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for an industrial insured if: |
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(1) the agent procuring or placing the insurance |
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discloses to the industrial insured that: |
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(A) comparable insurance may be available from |
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the admitted market that is subject to more regulatory oversight |
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than the surplus lines market; and |
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(B) a policy purchased in the admitted market may |
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provide greater protection than the surplus lines insurance policy; |
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(2) the surplus lines company offering the coverage |
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has a financial strength rating of A- or better from the A. M. Best |
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Company; and |
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(3) after receiving the notice described by |
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Subdivision (1), the industrial insured requests in writing that |
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the agent procure the insurance from or place the insurance with an |
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eligible surplus lines insurer. |
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SECTION 3. Section 981.215(a), Insurance Code, is amended |
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to read as follows: |
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(a) A surplus lines agent shall maintain a complete record |
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of each surplus lines contract obtained by the agent, including any |
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of the following, if applicable: |
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(1) a copy of the daily report; |
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(2) the amount of the insurance and risks insured |
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against; |
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(3) a brief general description of the property |
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insured and the location of that property; |
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(4) the gross premium charged; |
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(5) the return premium paid; |
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(6) the rate of premium charged on the different items |
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of property; |
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(7) the contract terms, including the effective date; |
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(8) the insured's name and post office address; |
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(9) the insurer's name and home office address; |
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(10) the amount collected from the insured; |
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(11) an agreement under Section 225.006(c); |
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(12) evidence establishing that: |
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(A) the insured qualified as an exempt commercial |
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purchaser and that the surplus lines agent complied with the |
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requirements of Section 981.004(c) if a diligent effort to obtain |
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insurance in the admitted market was not made pursuant to Section |
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981.004(a)(1); or |
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(B) the insured qualified as an industrial |
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insured and that the surplus lines agent complied with the |
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requirements of Section 981.004(d) if a diligent effort to obtain |
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insurance in the admitted market was not made pursuant to Section |
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981.004(a)(1); and |
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(13) any other information required by the department. |
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SECTION 4. The changes in law made by this Act apply only to |
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an insurance policy delivered, issued for delivery, or renewed on |
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or after January 1, 2018. A policy delivered, issued for delivery, |
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or renewed before January 1, 2018, is governed by the law as it |
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existed immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2017. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1559 was passed by the House on April |
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13, 2017, by the following vote: Yeas 138, Nays 0, 2 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1559 was passed by the Senate on May |
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11, 2017, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |