BILL ANALYSIS S.B. 455 By: Middleton Insurance Committee Report (Unamended) BACKGROUND AND PURPOSE According to the Texas Department of Insurance (TDI), surplus lines insurance is a special type of insurance that covers unique risks and fills a gap in the standard market by covering things that most insurance companies can't or won't insure. Current law governing surplus lines insurance does not require a surplus lines insurance company to be licensed by TDI, but does authorize TDI to approve which companies can do business in Texas. In order to be approved, surplus lines insurance companies must meet financial requirements, be licensed in their home state or country, and comply with applicable nationwide uniform standards. However, the bill sponsor has informed the committee that some surplus lines insurance policies may contain a provision that subjects the policy to the laws and arbitration of a state outside of Texas and, thus, do not offer the same protections. S.B. 455 seeks to address this issue by requiring a surplus lines insurance contract that contains an arbitration agreement to provide that the arbitration will be governed by Texas law and, unless certain conditions are met, conducted in Texas and that the insurance contract will be interpreted in accordance with Texas law. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS S.B. 455 amends the Insurance Code to require a surplus lines insurance contract for a risk located wholly in Texas and that contains an arbitration agreement to provide the following: that the arbitration will be conducted in Texas unless the following conditions are met: o the insurer and policyholder agree to a different venue after the insurer provides written notice to the policyholder of the insurer's request for a different venue; and o the insurer provides the policyholder with a premium credit for the costs incurred by the policyholder as a result of the change in venue; that the arbitration will be governed by Texas law; and that the insurance contract will be interpreted in accordance with Texas law. The bill applies only to a surplus lines insurance contract delivered, issued for delivery, or renewed on or after January 1, 2026. A surplus lines insurance contract delivered, issued for delivery, or renewed before January 1, 2026, is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose. EFFECTIVE DATE September 1, 2025.
BILL ANALYSIS
# BILL ANALYSIS
S.B. 455
By: Middleton
Insurance
Committee Report (Unamended)
S.B. 455
By: Middleton
Insurance
Committee Report (Unamended)
BACKGROUND AND PURPOSE According to the Texas Department of Insurance (TDI), surplus lines insurance is a special type of insurance that covers unique risks and fills a gap in the standard market by covering things that most insurance companies can't or won't insure. Current law governing surplus lines insurance does not require a surplus lines insurance company to be licensed by TDI, but does authorize TDI to approve which companies can do business in Texas. In order to be approved, surplus lines insurance companies must meet financial requirements, be licensed in their home state or country, and comply with applicable nationwide uniform standards. However, the bill sponsor has informed the committee that some surplus lines insurance policies may contain a provision that subjects the policy to the laws and arbitration of a state outside of Texas and, thus, do not offer the same protections. S.B. 455 seeks to address this issue by requiring a surplus lines insurance contract that contains an arbitration agreement to provide that the arbitration will be governed by Texas law and, unless certain conditions are met, conducted in Texas and that the insurance contract will be interpreted in accordance with Texas law.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS S.B. 455 amends the Insurance Code to require a surplus lines insurance contract for a risk located wholly in Texas and that contains an arbitration agreement to provide the following: that the arbitration will be conducted in Texas unless the following conditions are met: o the insurer and policyholder agree to a different venue after the insurer provides written notice to the policyholder of the insurer's request for a different venue; and o the insurer provides the policyholder with a premium credit for the costs incurred by the policyholder as a result of the change in venue; that the arbitration will be governed by Texas law; and that the insurance contract will be interpreted in accordance with Texas law. The bill applies only to a surplus lines insurance contract delivered, issued for delivery, or renewed on or after January 1, 2026. A surplus lines insurance contract delivered, issued for delivery, or renewed before January 1, 2026, is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.
EFFECTIVE DATE September 1, 2025.
BACKGROUND AND PURPOSE
According to the Texas Department of Insurance (TDI), surplus lines insurance is a special type of insurance that covers unique risks and fills a gap in the standard market by covering things that most insurance companies can't or won't insure. Current law governing surplus lines insurance does not require a surplus lines insurance company to be licensed by TDI, but does authorize TDI to approve which companies can do business in Texas. In order to be approved, surplus lines insurance companies must meet financial requirements, be licensed in their home state or country, and comply with applicable nationwide uniform standards. However, the bill sponsor has informed the committee that some surplus lines insurance policies may contain a provision that subjects the policy to the laws and arbitration of a state outside of Texas and, thus, do not offer the same protections. S.B. 455 seeks to address this issue by requiring a surplus lines insurance contract that contains an arbitration agreement to provide that the arbitration will be governed by Texas law and, unless certain conditions are met, conducted in Texas and that the insurance contract will be interpreted in accordance with Texas law.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
S.B. 455 amends the Insurance Code to require a surplus lines insurance contract for a risk located wholly in Texas and that contains an arbitration agreement to provide the following:
that the arbitration will be conducted in Texas unless the following conditions are met:
o the insurer and policyholder agree to a different venue after the insurer provides written notice to the policyholder of the insurer's request for a different venue; and
o the insurer provides the policyholder with a premium credit for the costs incurred by the policyholder as a result of the change in venue;
that the arbitration will be governed by Texas law; and
that the insurance contract will be interpreted in accordance with Texas law.
The bill applies only to a surplus lines insurance contract delivered, issued for delivery, or renewed on or after January 1, 2026. A surplus lines insurance contract delivered, issued for delivery, or renewed before January 1, 2026, is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.
EFFECTIVE DATE
September 1, 2025.