Texas Senate Bill SB1806

Texas 2011 - 82nd Regular

• Introduced: 3/11/11
• Out of Senate Committee: 4/28/11
• Voted on by Senate: 5/6/11
• Refer: 3/24/11
• Out of House Committee: 5/12/11
• Report Pass: 4/28/11
• Voted on by House: 5/13/11
• Engrossed: 5/6/11
• Governor Action: 5/28/11
• Refer: 5/9/11
• Report Pass: 5/12/11
• Enrolled: 5/16/11
• Passed: 5/28/11

Caption

Relating to timely filing of a surplus lines policy; providing penalties.

Impact

The bill is expected to enhance compliance among surplus lines agents by implementing financial penalties linked to late filing. This may lead to a more disciplined filing process, ultimately encouraging agents to prioritize timely submissions. As changes only affect surplus lines policies filed on or after the bill's effective date, it preserves the regulatory framework for pre-existing policies, ensuring that agents are informed about the stipulations imposed on them regarding new filings.

Summary

SB1806 is a bill aimed at amending the Insurance Code of Texas related to the timely filing of surplus lines policies by insurance agents. The provisions of the bill introduce a structured penalty system for agents who file policies after specified deadlines. The bill stipulates fees of $50 or $100, depending on the agent's filing history in the preceding year, for those who file late within 180 days of the due date. For filings made after 180 days but within one year, a fee of $200 is applied if the agent meets certain conditions regarding prior late filings.

Contention

While SB1806 aims at improving the administration of surplus lines insurance, it could raise concerns among agents regarding the financial burden of penalties. The graduated nature of the penalty fees attempts to consider agents' filing histories, yet it may be perceived as too punitive for those with occasional lapses. The debate surrounding the bill could center on whether the penalties are necessary for encouraging compliance or if they disproportionately affect less established agents or those managing a smaller volume of filings.