Law repealing surplus lines bond in effect

A law eliminating the surplus lines bond that Texas surplus agents formerly had to carry became effective Jan. 1, 2006, the Surplus Lines Stamping Office of Texas (SLSOT) has reported. The Texas Legislature in 2005 passed Senate Bill 1564, which “repealed Section 981.206 of the Insurance Code, eliminating the requirement that a surplus lines agent provide proof of financial responsibility to the Texas Department of Insurance,” according to SLSOT’s Lone Star Lines, January – March Issue 2006.

A $50,000 surety bond was generally used to fulfill the financial responsibility requirement.

Questions regarding the new law and the the surplus lines agent bond should be directed to the Texas Department of Insurance, Agent License Division at (512) 322-3503.