Surplus Lines Individual Agent vs Agency Filings

This bulletin contains information on surplus lines individual agent vs. agency filings from the Texas Department of Insurance.

SURPLUS LINES INDIVIDUAL AGENT VS. AGENCY FILINGS

This bulletin is a reminder of the department’s policy decision made in 2008 regarding reporting premium tax and policies under an individual’s agent license number when employed by an agency. If the agent is employed by an agency, the agent must report the premiums and policies under the agency’s license number. Please reference Bulletin SO-2008-02 regarding the original post on this subject matter.

In accordance with Texas Administrative Code 15.6, a surplus lines agent may not lend or loan his/her license to another agent or agency. Pursuant to Texas Insurance Code section 981.203(a)(2)(A) the agency must have at all times at least one officer, director or active partner who holds a surplus lines agent license, or otherwise the agency will be in violation of the law and be considered doing unauthorized surplus lines insurance business which may result in enforcement action by the department.

The agency is responsible to notify the department within 30 days of a situation where an officer, director or active partner’s surplus lines license has become inactive and thus terminations with surplus lines insurers has occurred or the ability to settle claims for an eligible surplus lines insurer is withdrawn in accordance with Texas Insurance Code section 981.217. Notice must be sent to the Agent/Adjuster Licensing Office of the department and proper forms must be obtained from this office and filed to update the records. Please reference Bulletin SO-2011-09.

The stamping office will continue to monitor the situation and report these violations to the department. Individual agents who are employees of an agency and do not report under the agency license are directly liable and is subjecting himself/herself to possible enforcement action by the department. The agency name must be published on the policy; policies filed with the stamping office must be filed under the agency license number; and premium taxes remitted under the agency license number to the comptroller in order for the individual agent to relieve him/her of this liability.

Any questions regarding this bulletin may be submitted to the department.