Surety Bond Encyclopedia

Surplus Lines Agent ($50,000) Bond - Statewide in Texas

Brief Summary

There is nothing to buy here. Texas repealed the surplus lines agent bond requirement effective January 1, 2006, so no surety bond is needed to get or keep a Texas surplus lines agent license. Anyone quoting you a $50,000 Texas surplus lines bond is quoting a requirement that has been off the books for twenty years. Save the premium.

Texas no longer requires a surplus lines agent surety bond. The financial responsibility requirement at Texas Insurance Code Section 981.206, which agents commonly satisfied with a $50,000 surety bond, was repealed by S.B. 1564 in the 79th Legislature and the repeal took effect January 1, 2006. Nothing in current Chapter 981, in 28 Texas Administrative Code Chapter 15, or on the Texas Department of Insurance licensing pages requires a bond from a surplus lines agent.

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How to Apply for a Surplus Lines Agent ($50,000) Bond:

No surety bond. Confirm this before paying anyone a premium for a Texas surplus lines agent bond.
Hold a Texas general lines property and casualty agent license or a managing general agent license in good standing, or, if non resident, a surplus lines license from a reciprocal state.
Pass the surplus lines examination through Pearson VUE.
Submit the license application to the Texas Department of Insurance with the $50 non refundable application fee.
File surplus lines contracts with the stamping office as required by Texas Insurance Code Section 981.213.
File the annual report with the Department before March 1 for the preceding calendar year under Section 981.216.
File the annual insurance premium tax report with the Texas Comptroller.

Detailed Information About the Texas Surplus Lines Agent ($50,000) Bond:

The requirement was repealed in 2006

Texas Insurance Code Section 981.206 was the financial responsibility provision for surplus lines agents, and a $50,000 surety bond was the standard way agents met it. S.B. 1564, passed by the 79th Legislature, struck the cross reference in Section 981.203(b) and then repealed Section 981.206 outright. The Act took effect January 1, 2006.

The stated reasons in the bill analysis were to simplify licensing, to line Texas up with other states on surplus lines licensure, and to avoid federal preemption of state licensing law.

Nothing replaced it

Current Subchapter E of Chapter 981 runs 981.201 through 981.223 and contains no bond section. Section 981.203, the qualifications section, now requires only the examination, an underlying general property and casualty agent or managing general agent license in good standing, the application fee, and a completed application. The Department rule on licensing surplus lines agents, 28 Texas Administrative Code Section 15.101, does not impose one either.

Why bond seller pages still list it

The $50,000 figure has an afterlife on surety agency websites because it was a real requirement for decades and nobody updated the page. Treat any current listing of a Texas surplus lines agent bond as stale copy, not as a filing you owe the state.

What Texas actually asks of a surplus lines agent

You must hold a general lines property and casualty agent license or a managing general agent license in good standing before you can apply, or if you are a non resident, a surplus lines license from a reciprocal state. You pass the exam through Pearson VUE. The application fee is $50 and the renewal fee is $50, both non refundable, with a $25 late fee. No continuing education is required for the surplus lines license itself. TDI mails a renewal notice 90 days before the license expires.

Separately, Section 981.213 requires the agent to report and file a copy of each surplus lines contract with the stamping office under its plan of operation, Section 981.216 requires an annual report to the Department before March 1 covering the preceding calendar year, and the agent files an annual insurance premium tax report with the Texas Comptroller.

Eligibility and Requirements for a Texas Surplus Lines Agent ($50,000) Bond:

Underlying general lines property and casualty or managing general agent license in good standing.
Passing examination score.
$50 non refundable application fee, $50 non refundable renewal fee, $25 late fee.
No continuing education is required for the surplus lines license.
No surety bond and no financial responsibility filing.

Texas Surplus Lines Agent ($50,000) Bond FAQs:

Do I need a $50,000 surety bond to be a surplus lines agent in Texas?

No. The requirement was in Texas Insurance Code Section 981.206 and it was repealed by S.B. 1564 in the 79th Legislature, effective January 1, 2006. There has been no bond requirement for a Texas surplus lines agent license since that date.

Then why do so many surety websites still sell it?

Because it was a real requirement for a long time and the pages were never updated. The current statute is the answer, not a bond seller listing. Read Chapter 981 Subchapter E and you will find no bond section.

Is there a grandfather rule, or does the old bond still apply to agents licensed before 2006?

No. The repeal removed the requirement for everyone. Agents licensed before 2006 are not held to the old financial responsibility provision.

What does the license actually cost and how do I keep it?

The application fee is $50 and the renewal fee is $50, both non refundable, with a $25 late fee if you miss the date. TDI mails a renewal notice 90 days before expiration. No continuing education is required for the surplus lines license itself, though your underlying property and casualty license has its own requirements.

Is any other bond or security required of a Texas surplus lines agent?

Not under Chapter 981 or under 28 Texas Administrative Code Chapter 15. What you do owe are the stamping office filings under Section 981.213, the annual report to the Department before March 1 under Section 981.216, and the annual premium tax report to the Texas Comptroller.