Which of the following best describes the eligibility of a surplus lines insurer?

A surplus lines insurer must be financially stable but does not need to be licensed in Texas to operate there. This is a crucial aspect of surplus lines insurance, which is designed to provide coverage for risks that standard insurers may not be willing to cover. Because surplus lines insurers often underwrite non-conforming or higher-risk policies, they may be based in other states or even other countries, as long as they meet specific financial requirements to ensure they can pay claims.

The focus on financial stability is essential because it reassures policyholders that the insurer has the necessary resources to honor claims in case a loss occurs. Therefore, this choice accurately reflects the regulatory environment surrounding surplus lines insurers in Texas, making it the best description of their eligibility.