Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 15 - SURPLUS LINES INSURANCE › Subchapter B - SURPLUS LINES AGENTS › Section 15.102 - Conduct of Agent's Business

Current through Reg. 49, No. 28; July 12, 2024
(a) A
				  surplus lines agent engaging in surplus lines business as an individual surplus
				  lines agent may be licensed only in his or her name. No individual may hold
				  more than one surplus lines agent license. A surplus lines agent engaging in
				  surplus lines business under an assumed name must comply with §
										19.902 of
				  this title.
(b) An insurance agent
				  doing business as a partnership, corporation, or limited liability company may
				  apply for and obtain a surplus lines license, provided that the agent meets the
				  qualifications and has been issued a license under the Insurance Code as either
				  a general property and casualty agent or a managing general agent, except when
				  Insurance Code §
										981.203(a-1)
				  is applicable. The surplus lines agent license will be issued to a partnership,
				  corporation, or limited liability company in the name of the agency as
				  indicated on the underlying license issued under the Insurance Code. No
				  partnership, corporation, or limited liability company may receive more than
				  one surplus lines agent license. A partnership, corporation, or limited
				  liability company doing business under an assumed name must comply with §
										19.902 of
				  this title.
(c) Every act in
				  placing or servicing a surplus lines insurance contract under an assumed name
				  must also clearly disclose the true name of the surplus lines agent acting
				  under the assumed name, or the true name of the individual licensed surplus
				  lines agent representing the surplus lines agency, partnership, corporation, or
				  limited liability company acting under the assumed name.
(d) A surplus lines agent may not shift,
				  transfer, delegate, or assign his or her responsibility to a person or persons
				  not licensed as a surplus lines agent. A surplus lines agent may not file with
				  the stamping office a policy for a transaction in which the surplus lines agent
				  did not place the policy.
(e)
				  Notwithstanding subsection (d) of this section, a surplus lines agent may
				  contract with a third-party to meet the requirements of Insurance Code §
										981.105(a) and
				  (b) to file policies with the stamping
				  office, but the agent remains responsible for the timeliness and accuracy of
				  the filings including payment of any fees owed and any penalties assessed for
				  policies that were not timely filed.
(f) A surplus lines agent may exercise
				  underwriting authority on behalf of an eligible surplus lines insurer if the
				  surplus lines agent possesses a current written agreement from each eligible
				  surplus lines insurer granting that authority. The written agreement must set
				  forth the identity of the insurer and the scope of the underwriting authority
				  granted, and must reserve the duty of final underwriting review by the insurer.
				  The underwriting agreement must be available for review by TDI. The
				  underwriting authority granted to a surplus lines agent by the insurer may
				  include the rating and acceptance of risks, binding of coverage, issuance of
				  formal evidence of coverage, and cancellation of coverage.
(g) A surplus lines agent may exercise claims
				  authority on behalf of an eligible surplus lines insurer if the surplus lines
				  agent possesses a current written agreement from the eligible surplus lines
				  insurer granting authority. A Texas-licensed adjuster must perform all claims
				  adjustments unless the policy covers risks in multiple states and the claim is
				  for a loss on a non-Texas risk. The written agreement must be available for
				  review by TDI.
(1) Claims authority delegated
				  to the surplus lines agent by the insurer may include, but is not limited to,
				  the investigation, adjustment, supervision, and payment of claims, including
				  payment from the surplus lines agents' funds, provided the agent is promptly
				  reimbursed by the insurer for the payments.
(2) Partial payments to claimants by the
				  surplus lines agent made under the written agreement do not relieve the surplus
				  lines insurer of any continuing obligations to the insured. Payment of claims
				  may also be made by the surplus lines agent directly from funds of the eligible
				  surplus lines insurer, provided the surplus lines agent possesses a current
				  written agreement that the insurer authorizes the direct payments. This written
				  agreement must be available for review by TDI.