Summary of Newly Adopted S/L Rules
Title 28, Chapter 15, of the Texas Administrative Code, relating to surplus lines insurance has been repealed and replaced, with changes to take effect on 12/30/2018.
MOST PRESSING CHANGE – §15.114
Rule §15.114 regarding untimely filed policies takes effect 1/1/2019. This rule clarifies that the agent waives the right to dispute the timeliness of any filing if he or she does not follow the procedures listed within the prescribed timeframe (§15.114(c)).
SLTX currently distributes a monthly report to agents/brokers listing all late filed policies and will continue to do so. The adopted rule lays out a new timeline.
|Monthly Process for Untimely Filed Policies|
|On or before the 15th day||SLTX must provide to agents a report listing any surplus lines policies the agent filed in the previous month|
|On or before the earlier of 90 days from the date of the monthly report "OR" February 15 of the following year in which the policies were filed||Agent must either correct any errors or notify SLTX that the agent believes the items were timely filed|
|On or before the earlier of either 30 days “after receipt of notification” that an agent believes a policy was timely filed “OR” March 1||If the agent notifies SLTX that they believe a policy was timely filed, SLTX will research and provide a summary and opinion on matter|
|Earlier of either 45 days after receiving SLTX’s analysis “OR” March 15||Upon receiving SLTX analysis, TDI will provide final consideration|
Each year, SLTX produces an annual report listing all policies that were untimely filed in the previous calendar year.
|Annual Process for Untimely Filed Policies|
|1st business day in April of each year||SLTX will report to TDI all surplus lines policies not timely filed in the previous calendar year|
Policy Limits – Added and Effective 12/30/2018
Surplus lines policies must be filed within 60 days of issuance OR the effective date, whichever is later.
According to 15.106(b), this policy must include:
- A declarations page;
- A listing of all participating insurers on the policy;
- All coverage parts and schedules, including limits;
- Extended coverage exclusions;
- All premium-bearing documents;
- Risk ZIP code location; and
- Any other parts as may be required by the stamping office to review and record the policy
SLTX acknowledges that the addition of policy limit to your feed may currently not be feasible. As such, we will obtain copies electronically for EFS and programmatic filers through a form on the SLTX website, which will be published in the near future.
Purchasing Groups – §15.115
For purchasing group insurance through an S/L agent, agents must submit filings and stamping fees to SLTX.
Surplus Lines Insurers – Subchapter D
15,301 requires that surplus lines insurers provide information to SLTX regarding their eligibility to write S/L insurance.
|Evaluation Requirements of Surplus Lines Insurance Coverage|
|Foreign insurers||Provide documents evidencing authorization from the insurer's domiciliary jurisdiction to write the same kind and class of business that it proposes to write in Texas; documentation that the insurer has capital and surplus required by Insurance Code §981.057.|
|Alien insurers (listed with the NAIC's International Insurer Department)||Not required to submit anything but are encouraged to provide a contact person located in the United States; information may be sent electronically|
|Domestic surplus lines insurers||Provide to SLTX a copy of the domestic surplus lines insurer certificate issued by TDI and documentation that the insurer has capital and surplus required by Insurance Code §981.057.|
SLTX Plan of Operation
The original Subchapter B, containing the SLTX Plan of Operation, has been repealed so that the plan can be more efficiently amended. In the event that the SLTX Board of Directors suggests revising the plan of operation or determines a need to change the stamping fee, such final board resolution will be submitted to the Commissioner for review. If a new stamping fee is proposed, there will be a 20-day comment period.
According to the Texas Insurance Code §981.153, the Commissioner of Insurance must approve by order the plan of operation, but the text of the plan does not have to be a rule.
Under the newly adopted §15.201 of the Administrative Code, the SLTX plan of operation and any amendments to it become effective on written approval by a Commissioner order. SLTX will continue to maintain the most current plan of operation on its website.