1. (a) Before placing insurance with an unauthorized insurer, a surplus lines agent shall personally make a reasonable inquiry into the financial condition and operating history of an unauthorized insurer.
2. (b) During the course of placing business with an unauthorized insurer, either foreign or alien, each surplus lines agent shall be under a continuous duty to stay apprised of each insurer's solvency and sound financial strength, and that the insurer processes claims and pays losses expeditiously.
3. (c) Whenever any reasonable doubt arises as to the capacity, competence, stability, claim practices, or good faith of an unauthorized insurer with whom a surplus lines agent has placed insurance, the agent is under a further duty to inform the commissioner and the Surplus Lines Stamping Office of Texas of such reasonable doubt.

4. (d) Each surplus lines agent has the duty to place surplus lines insurance on Texas risks only with an unauthorized insurer:

   1. (1) that possesses financial solvency adequate to its business;
   2. (2) that has a surplus to policyholders which is reasonable in relation to its outstanding liabilities;
   3. (3) that is of good repute and is competently managed;
   4. (4) that provides reasonably prompt claim service to policyholders; and
   5. (5) that meets all other criteria under the Insurance Code, Article 1.14-2.

Source Note:The provisions of this §15.9 adopted to be effective January 1, 1976; amended to be effective March 15, 1981, 6 TexReg 770; amended to be effective April 27, 1984, 9 TexReg 2083; amended to be effective November 10, 1988, 13 TexReg 5470.