Texas Considers Domestic Surplus Lines Insurance Company Legislation
May 3, 2017

The Texas Legislature is currently considering the authorization of domestic surplus lines insurance companies in Texas. If approved, Texas would join at least 10 other states with similar domestic surplus lines insurance company laws. The proposed legislation is currently working through the Texas House and Senate and appears to be tracking favorably in both Texas legislative chambers.

A prospective domestic surplus lines insurance authorization in Texas may eliminate the need to utilize out-of-state insurers as designated surplus lines insurance writers for Texas-based risks in favor of authorized Texas domestics.

The Texas Department of Insurance has expressed its support for the proposed legislation and in its recent TDI biennial report made broad legislative recommendations to amend Texas law to allow surplus lines insurers to be domiciled in Texas for the purpose of insuring Texas risks. The Department of Insurance cited the dual economic bases of a domestic recapture of surplus lines insurance related premiums currently going to out-of-state insurers and an anticipated reduction in compliance costs for Texas-based insurance groups.

The current legislative session in Texas ends on May 29th and, if passed, it is expected the domestic surplus lines insurance authorization legislation could become effective as soon as January.


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