TX Surplus Lines study guide
TX Surplus Lines · Work through your exam, one topic at a time.
The Texas surplus lines license is a property and casualty line of authority for agents who place coverage with eligible nonadmitted (non-Texas-admitted) insurers when no admitted market will write the risk. It is not a standalone entry-level license: Texas requires a qualifying underlying P&C license and the associated prelicensing education before a candidate can sit for the surplus lines exam, so the material assumes you already understand policies, coverage forms, and basic P&C regulation. The TX Surplus Lines study guide has 5 sections and about 1,967 words.
01Insurance Principles and Concepts Underlying Surplus Lines
Surplus lines exists because the standard market cannot absorb every risk, but the mechanics of every surplus lines policy are the same mechanics tested on general lines exams. Risk transfer and pooling.
431 words, about 2 min02Texas Insurance Law and Regulations Common to All Lines
The Texas Department of Insurance (TDI), headed by the Commissioner of Insurance, administers the Texas Insurance Code and adopts rules published in Title 28 of the Texas Administrative Code. Surplus lines agents are regulated by the same statutes that govern every other producer - Chapter 981 only adds a layer.
374 words, about 2 min03Surplus Lines Law and Regulation - Insurance Code Chapter 981
Chapter 981 governs who may place surplus lines business, who may accept it, and how the transaction is reported. The central concept is eligibility : a surplus lines policy may be placed only with an insurer that appears on TDI's list of eligible surplus lines insurers.
403 words, about 2 min04Surplus Lines Placement, Diligent Effort, and Broker Operations
The exam tests an ordered process, not just definitions: (1) determine the risk is genuinely hard to place; (2) make and document a diligent effort in the admitted market; (3) select an eligible surplus lines insurer; (4) bind and disclose non-admitted status to the insured; (5) deliver the policy; (6) file the policy data with the Surplus Lines Stamping Office of Texas (SLSOT) within 30 days of issuance or effective date; (7) remit premium tax and the stamping fee; (8) retain records. Texas rules require a documented, objective search of the admitted market - in practice, submission to and declination from at least three authorized insurers that write the class, or all authorized insurers writing it if fewer than three exist.
373 words, about 2 min05Premium Tax, Stamping Office Reporting, and Recordkeeping
Texas imposes a surplus lines premium tax of 4.85% of gross premium , which stands in lieu of other state premium taxes on that business. Separately, the Surplus Lines Stamping Office of Texas charges a stamping fee of 0.04% of gross premium .
386 words, about 2 min