H.B. No. 2492
 
 
 
 
AN ACT
  relating to domestic surplus lines insurers; authorizing and
  imposing a tax.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Subtitle I, Title 6, Insurance
  Code, is amended to read as follows:
  SUBTITLE I. SURPLUS LINES INSURERS; COMPANIES [THAT ARE] NOT
  ORGANIZED IN TEXAS
         SECTION 2.  Section 981.002(4), Insurance Code, is amended
  to read as follows:
               (4)  "Eligible surplus lines insurer" means an insurer
  that is not an authorized insurer, but that is eligible under
  Subchapter B or B-1, in which surplus lines insurance is placed or
  may be placed under this chapter.
         SECTION 3.  Section 981.004(a), Insurance Code, is amended
  to read as follows:
         (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 that kind and class of insurance in this
  state;
               (2)  the insurance is placed through a surplus lines
  agent; and
               (3)  the insurer meets the eligibility requirements of
  Subchapter B or B-1 as of the inception date and annual anniversary
  date of each insurance contract, cover note, or other confirmation
  of insurance.
         SECTION 4.  Section 981.006, Insurance Code, is amended to
  read as follows:
         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.
         SECTION 5.  Chapter 981, Insurance Code, is amended by
  adding Subchapter B-1 to read as follows:
  SUBCHAPTER B-1. DOMESTIC SURPLUS LINES INSURER
         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.
         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 commissioner for designation as a
  domestic surplus lines insurer.
         (b)  On approval of an application under Subsection (a), the
  commissioner shall designate an applicant as a domestic surplus
  lines insurer and issue to the applicant a domestic surplus lines
  insurer certificate.
         (c)  Notwithstanding Section 822.101, a domestic surplus
  lines insurer is not entitled to a certificate of authority to
  engage in the business of insurance in this state in the admitted
  market.
         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
  under Chapter 822.
         (b)  A domestic surplus lines insurer is not subject to:
               (1)  Section 38.003;
               (2)  Chapter 462;
               (3)  Chapter 463;
               (4)  Chapter 501;
               (5)  Section 981.051;
               (6)  Section 981.101(b);
               (7)  Chapter 2007;
               (8)  Chapter 2301;
               (9)  Chapter 2251; and
               (10)  Article 4413(37), Revised Statutes.
         (c)  To the extent that this subchapter conflicts with any
  other insurance law, this subchapter controls.
         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 under the insurer's articles of incorporation.
         (b)  A domestic surplus lines insurer may not issue:
               (1)  a policy in the admitted market; or
               (2)  a policy to satisfy the financial responsibility
  requirements of Chapter 601, Transportation Code, insurance
  requirements of Chapter 406, Labor Code, or requirements of any
  other law of this state mandating insurance coverage by an
  insurance company authorized to engage in the business of insurance
  in this state.
         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 surplus lines insurer
  were an authorized insurer under Subtitle C, Title 3.
         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
  provided by commissioner rule.
         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.
         SECTION 6.  Section 981.210, Insurance Code, is amended to
  read as follows:
         Sec. 981.210.  PLACEMENT OF COVERAGE. A surplus lines agent
  may not place surplus lines coverage with an insurer unless:
               (1)  the insurer meets the eligibility requirements of
  Subchapter B or B-1; and
               (2)  the stamping office provides evidence to the
  department that the insurer meets those requirements.
         SECTION 7.  This Act takes effect January 1, 2018.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2492 was passed by the House on May 6,
  2017, by the following vote:  Yeas 142, Nays 0, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2492 was passed by the Senate on May
  24, 2017, by the following vote:  Yeas 30, Nays 1.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor