| (a) Persons performing any of the following surplus
lines insurance activities are required to have a surplus lines agent
license:
(1) supervising unlicensed staff engaged in activities
described in subsection (b) of this section, although unlicensed intermediary
supervisors may supervise unlicensed staff engaging in these activities
if the ultimate supervisor is licensed;
(2) negotiating, soliciting, effecting, procuring,
or binding surplus lines insurance contracts for clients or offering
advice, counsel, opinions, or explanations of surplus lines insurance
products to agents or clients beyond the scope of underwriting policies
or contracts, except for a general lines property and casualty agent
making a referral of surplus lines business to a surplus lines agent
that then completes the surplus lines transaction; or
(3) receiving any direct commission or variance in
compensation based on the volume of surplus lines premiums taken and
received from, or as a result of, another person selling, soliciting,
binding, effecting, or procuring surplus lines insurance policies,
contracts, or coverages, except for a general lines property and casualty
agent making a referral of surplus lines business to a surplus lines
agent that then completes the surplus lines transaction.
(b) The following activities, if supervised by a surplus
lines agent, do not require a surplus lines agent license if the employee
does not receive any direct commission from selling, soliciting, binding,
effecting, or procuring insurance policies, contracts, or coverages,
and the employee's compensation is not varied by the volume of premiums
taken and received:
(1) full-time clerical and administrative services,
including, but not limited to, the incidental taking of information
from clients; receipt of premiums in the office of a licensed agent;
or transmitting to clients, as directed by a licensed surplus lines
agent, prepared marketing materials or other prepared information
and materials including, without limitation, invoices and evidences
of coverage;
(2) contacting clients to obtain or confirm information
necessary to process an application for surplus lines insurance so
long as the contact does not involve any activities for which a license
would be required under subsection (a)(2) of this section;
(3) performing the task of underwriting any insurance
policy, contract, or coverage, including and without limitation, pricing
of the policy or contract; or
(4) contacting clients, insureds, agents, other persons,
and insurers to gather and transmit information regarding claims and
losses under the policy to the extent the contact does not require
a licensed adjuster as set forth under Insurance Code Chapter 4101,
concerning Insurance Adjusters.
(c) This section must not be construed to prohibit
distribution of agency profits to unlicensed persons, including shareholders,
partners, and employees.
(d) Before TDI issues a surplus lines agent license,
the applicant must submit the following:
(1) an appropriate, fully completed written application;
and
(2) the fee specified by §19.801 and §19.802
of this title (relating to General Provisions and Amount of Fees,
respectively).
(e) Texas-resident applicants, and nonresident applicants
who do not hold a surplus lines license in their state of residence
or whose state of residence does not license Texas residents on a
reciprocal basis as determined by TDI, must meet all licensing requirements
set forth in Insurance Code Chapter 981, concerning Surplus Lines
Insurance. Nonresident applicants under this section must also comply
with Insurance Code §4056.051, concerning Application for Nonresident
Agent License; Criminal History.
(f) Nonresident applicants who hold a surplus lines
agent license in good standing in the agent's state of residence and
meet the requirements of Insurance Code §4056.052, concerning
Issuance of License to Nonresident Agent Licensed in Other State,
must meet all the licensing requirements of Insurance Code Chapter
981 to the extent that the requirements are not waived by the commissioner
under Insurance Code §4056.055, concerning Waiver of Requirements
for Nonresident Agent Licensed in Other State or Jurisdiction.
(g) Notwithstanding any other subsection of this section,
nonresident applicants are not required to obtain a general property
and casualty agent license if they meet the requirements of Insurance
Code §981.203(a-1), concerning Qualifications for Surplus Lines
License.
(h) Each surplus lines agent license issued to an agent
will be valid for a term as established under Insurance Code §4003.001,
concerning License Expiration, and Chapter 19, Subchapter I of this
title (relating to General Provisions Regarding Fees, Applications,
and Renewals). The license may be renewed by submitting a renewal
application and a nonrefundable license fee as specified by §19.801
and §19.802 of this title.
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