(a) Alternatives of proof of financial solvency. Each surplus lines licensee as a condition precedent for being licensed and as a condition for continuing his license in force shall offer proof of financial solvency and demonstrate capacity in respect of responsibility to insureds under policies of surplus lines insurance under one of the following alternatives.
- (1) Prior to the issuance or renewal of a surplus lines license, the applicant may file with the commissioner a surety bond on Form F-SBI-SL-3 in the penal sum of not less than $50,000, aggregate liability. The surety on the bond may be an unauthorized insurer that is acceptable to the commissioner. The surety bond shall be maintained for as long as the licensee continues under this alternative. No less than 30 days written notice of bond termination must be given to the licensee and must be filed with the commissioner.
- (2) Prior to the issuance or renewal of a surplus lines license, the applicant may prove that his surplus lines agency has net assets in excess of $100,000 which are free and clear of all encumbrances and are not considered part of the applicant's residence or business homestead or are not otherwise exempt from attachment under state or federal laws. The commissioner may require a hearing of record conducted in Austin, in the State Insurance Building to determine the applicant's financial solvency.
- (b) Commitment to bind. A binding commitment on the part of the surety to issue a bond pursuant to this section within a period of not more than 30 days shall be sufficient in connection with any application of license.
Source Note:The provisions of this §15.4 adopted to be effective January 1, 1976; amended to be effective March 15, 1981, 6 TexReg 770.