Texas 2009 - 81st Regular

Texas House Bill HB3978 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R13845 AJA-D
2	2	By: Hunter H.B. No. 3978
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to provision of surplus lines insurance.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 981.004, Insurance Code, is amended to
10	10	read as follows:
11	11	Sec. 981.004. SURPLUS LINES INSURANCE AUTHORIZED. (a) An
12	12	eligible surplus lines insurer may provide surplus lines insurance
13	13	only if:
14	14	(1) the full amount of required insurance cannot be
15	15	obtained, after a diligent effort, from an insurer authorized to
16	16	write and actually writing that kind and class of insurance in this
17	17	state;
18	18	(2) the insurance is placed through a surplus lines
19	19	agent licensed in accordance with Section 981.203; and
20	20	(3) the insurer meets the eligibility requirements of
21	21	Subchapter B as of the inception date and annual anniversary date of
22	22	each insurance contract, cover note, or other confirmation of
23	23	insurance.
24	24	(b) The commissioner shall by order declare eligible for
25	25	placement with a surplus lines insurer and exempt from all
26	26	requirements any kind of insurance coverage or risk for which the
27	27	commissioner finds, after a public hearing, that there is not a
28	28	reasonable or adequate market among authorized insurers. The
29	29	commissioner or the commissioner's designee shall maintain an
30	30	export list showing the exempt coverages and risks.
31	31	(c) A public hearing under Subsection (b) must be held at
32	32	least annually, and may be held more frequently at the
33	33	commissioner's discretion. Reasonable notice of each hearing shall
34	34	be given to all interested parties, including agents, authorized
35	35	insurers, trade associations representing authorized and
36	36	unauthorized insurers, and consumer groups.
37	37	(d) An order by the commissioner under this section shall
38	38	continue in effect until terminated by the commissioner.
39	39	(e) If, before a hearing under Subsection (b), the
40	40	commissioner receives written comments or testimony or otherwise
41	41	determines that a kind of insurance on the export list is more
42	42	available in the admitted market, the commissioner may remove that
43	43	kind of insurance from the list. The eligibility of any kind of
44	44	insurance to remain on the list is subject to an annual affirmative
45	45	finding by the commissioner, except that if written comments or
46	46	testimony regarding the eligibility of a kind of insurance to be on
47	47	the list are received before a hearing, the eligibility of that kind
48	48	of insurance to remain on the export list shall be reviewed at the
49	49	next hearing and that kind of insurance may not remain on the export
50	50	list unless the commissioner or the commissioner's designee makes
51	51	an affirmative determination that there is not a reasonable or
52	52	adequate market among authorized insurers.
53	53	(f) The commissioner or the commissioner's designee shall
54	54	notify all surplus lines agents of any removal of a kind of
55	55	insurance from the list [An eligible surplus lines insurer may
56	56	provide surplus lines insurance only in the amount that exceeds the
57	57	amount of insurance obtainable from authorized insurers].
58	58	SECTION 2. Section 981.101(b), Insurance Code, as effective
59	59	April 1, 2009, is amended to read as follows:
60	60	(b) A surplus lines document must state, in 11-point type,
61	61	the following:
62	62	This insurance contract is with an insurer not
63	63	licensed to transact insurance in this state and is
64	64	issued and delivered as surplus line coverage under
65	65	the Texas insurance statutes. The Texas Department of
66	66	Insurance does not review or approve policy forms used
67	67	by the insurer providing this coverage, nor does it
68	68	audit the finances or review the solvency of the
69	69	[surplus lines] insurer [providing this coverage], and
70	70	the insurer is not a member of the property and
71	71	casualty insurance guaranty association created under
72	72	Chapter 462, Insurance Code. Chapter 225, Insurance
73	73	Code, requires payment of a __________ (insert
74	74	appropriate tax rate) percent tax on gross premium.
75	75	SECTION 3. The change in law made by this Act applies only
76	76	to surplus lines insurance coverage delivered, issued for delivery,
77	77	or renewed on or after January 1, 2010. Surplus lines insurance
78	78	coverage delivered, issued for delivery, or renewed before January
79	79	1, 2010, is governed by the law in effect immediately before the
80	80	effective date of this Act, and that law is continued in effect for
81	81	that purpose.
82	82	SECTION 4. This Act takes effect September 1, 2009.