Texas’ legislature is considering bills that would amend Texas’ insurance code to clarify that eligible surplus lines insurers may offer windstorm and hail insurance in areas already served by the Texas Windstorm Insurance Association (“TWIA”). H.B. 1940 was reported favorably out of the House Committee on Insurance last week. An identical Senate companion bill, S.B. 2444, was read for the first time on the Senate floor in late March before being referred to the Senate Business and Commerce Committee. The purpose underlying the bills is to address possible confusion as to whether surplus lines insurers may lawfully provide insurance coverage to residents of counties located in designated TWIA catastrophe areas.

H.B. 1940 and S.B. 2444 follow the trend that we have previously analyzed in this Blog regarding liberalizations of requirements whereby surplus lines brokers (or retail producers) must attempt to place insurance coverage in the admitted market before exporting such coverage to an eligible, unauthorized surplus lines insurer (i.e.; the “diligent search” requirement). For example, in one prior post, we discussed New York Senate Bill 769, which proposes to amend N.Y. Ins. Law § 2118 such that, when a retail insurance broker seeks to procure or place commercial lines insurance through an unaffiliated wholesale excess line insurance broker, both the retail insurance broker and the wholesale excess line insurance broker would be excused from otherwise-applicable diligent search requirements.

A full copy of H.B. 1940 can be found here. A full copy of S.B. 2444 can be found here.

*Locke Lord is proud to publish the Locke Lord Excess and Surplus Lines Manual on an annual basis, located here.