Can a Texas agent solicit business for a surplus lines insurer that is not eligible?

A Texas agent is prohibited from soliciting business for a surplus lines insurer that is not eligible. The surplus lines market is intended for insurers that meet specific criteria established under Texas law, ensuring they are financially stable and legitimately authorized to operate in the state. This regulation exists to protect consumers, as eligible surplus lines insurers must meet certain minimum standards.

If an agent were to solicit business for a non-eligible insurer, it could expose clients to higher risks and undermine the integrity of the Texas insurance marketplace. The rule helps maintain a level of accountability and financial strength within the surplus lines industry, ensuring that only those insurers that comply with the regulatory framework can offer such policies in Texas.

The focus on eligible insurers aims to ensure that clients are only provided options from companies that have met rigorous state standards, thereby protecting the interests of both the clients and the legal framework of the Texas insurance market.