| (a) Before placing insurance with an eligible surplus
lines insurer, a surplus lines agent must make a reasonable inquiry
into the financial condition and operating history of the insurer.
(b) During the course of placing coverage with an eligible
surplus lines insurer, each surplus lines agent will be under a continuous
duty to stay informed of the insurer's solvency and the soundness
of its financial strength, and of the insurer's ability to process
claims and pay losses expeditiously.
(c) A surplus lines agent must immediately inform TDI
and the stamping office if the agent has grounds to reasonably doubt
the capacity, competence, stability, claim practices, or business
practices of an eligible surplus lines insurer.
(d) A surplus lines agent must immediately inform TDI
and the stamping office if the agent has reasonable grounds to believe
that an insurer that is not an admitted insurer, an alien insurer
listed with the NAIC's International Insurer Department, or an eligible
surplus lines insurer, is transacting the business of insurance in
this state.
(e) A surplus lines agent may place surplus lines insurance
on Texas risks with only an eligible insurer that meets the requirements
of the Insurance Code and TDI's rules.
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