Are surplus lines insurers required to have a license in Texas?

Surplus lines insurers do not need to be fully licensed in Texas; however, they must be eligible. This means that these insurers must meet certain criteria established by the Texas Department of Insurance to operate within the state. Eligibility typically involves being authorized to conduct business in at least one other state, ensuring that they meet acceptable financial and operational standards.

In contrast, fully licensed insurers have gone through the extensive licensing process in Texas, which includes meeting specific regulations and requirements set forth by the state. Therefore, the distinction lies in the operational flexibility that surplus lines insurance offers. It allows these insurers to underwrite risks that standard insurers may not cover, enhancing the availability of various insurance products in the market while still ensuring regulatory oversight through eligibility requirements.

The other options suggest either a complete licensing requirement or no requirements whatsoever, which misrepresent the actual regulations governing surplus lines insurance in Texas.