Any reinsurance intermediary must file and maintain a bond
with the commissioner for the protection of all insurers represented
or file and maintain an errors and omissions policy, meeting the following
criteria.
(1) The bond must be executed by the reinsurance intermediary
as principal and by a surety company authorized to do business in
this state, as surety, or surplus lines insurer eligible in this state,
in the principal sum of $100,000 for a broker and in the principal
sum of $250,000 for a manager, payable to the Texas Department of
Insurance for the use and benefit of all insurers represented. The
bond must provide that a copy of any cancellation or nonrenewal notice
must be mailed to Agent and Adjuster Licensing Office, Texas Department
of Insurance, MC: CO-AAL, P.O. Box 12030, Austin, Texas 78711-2030.
The executed bond must be furnished to the Texas Department of Insurance.
(2) The errors and omissions policy must be in a form
acceptable to the Texas Department of Insurance, and must be filed
with Agent and Adjuster Licensing Office at the address listed in
paragraph (1) of this section. The policy must provide that the Texas
Department of Insurance will be a certificate holder and will receive
a copy of any cancellation or nonrenewal notice, which must be mailed
to the deputy commissioner for licensing at the address listed in
paragraph (1) of this section. The errors and omissions policy must
cover all negligent acts or omissions of the reinsurance intermediary
and any person acting on its behalf and must provide coverage of at
least $100,000 for each occurrence for brokers and must provide coverage
of at least $250,000 for each occurrence for managers.
(3) The commissioner may determine that special circumstances
require an additional amount of coverage for the bond or policy.
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