Relating to the duty of a surplus lines insurance agent in the placement of a surplus lines insurance policy.
Impact
The implications of HB2947 are significant for both surplus lines insurance agents and insurance consumers in the state. By formalizing the documentation process, the bill aims to enhance accountability among agents, ensuring that they adhere to the required diligence before resorting to surplus lines insurers. This could lead to better consumer protection as agents will now have to demonstrate their compliance, potentially reducing complaints related to the improper placement of insurance policies. Additionally, the record-keeping requirement could provide regulators with a clearer view of how surplus lines policies are being procured.
Summary
House Bill 2947 addresses the responsibilities of surplus lines insurance agents in Texas. The bill amends Section 981.004 of the Texas Insurance Code to clarify the conditions under which these agents can place surplus lines insurance. Specifically, it emphasizes that insurance can only be obtained from a surplus lines insurer if the required coverage cannot be secured after a diligent effort to obtain it from authorized insurers operating within the state. The bill also mandates that surplus lines agents maintain records of their diligent efforts, which must be available for inspection by regulatory departments.
Conclusion
Enforcement of HB2947 could ultimately lead to more confidence in the surplus lines insurance market in Texas. By tightening the definition of diligent effort and requiring variance documentation, the bill represents a step toward ensuring that consumers receive fair treatment and comprehensive coverage options. As the law goes into effect, there will likely be ongoing discussions around its implementation and the potential impacts on the insurance market at large.
Contention
HB2947 aims to improve oversight in the surplus lines insurance market, an area often criticized for its lack of transparency. While proponents of the bill, including some legislators and insurance industry representatives, argue that enhancing the duties and responsibilities of surplus lines insurance agents is essential for protecting consumers, there might be concerns regarding the operational burden this places on agents. Some may express apprehension about increased regulatory diligence and workload, which could affect smaller agencies trying to compete in the market.
Relating to the transfer and statutory novation of insurance policies from a transferring insurer to an assuming insurer through an insurance business transfer plan; authorizing fees.