6.4 Surplus Lines Agent Licensing: Qualifications, the Exam, Renewal, Discipline, and Required Notifications
Key Takeaways
- A resident individual qualifies for a surplus lines license by passing the surplus lines examination and holding a current Texas general P&C agent license or managing general agent license; an entity needs an officer, director, or active partner who passed the exam (TIC § 981.203).
- The Pearson VUE Texas Surplus Lines exam (InsTX-Surp60 in English, InsTX-Surp80 in Spanish) has 60 scoreable questions, a 60-minute time limit, and a $29 fee; the reported passing score is a scaled score of 70, and the application must be submitted within one year of passing.
- TDI charges a $50 application fee and a $50 renewal fee (plus a $25 late fee), the license runs for two years under TIC § 4003.001, and TDI states that no continuing education is required for the surplus lines license itself.
- A surplus lines license will not be renewed if the agent lets its underlying P&C or MGA license lapse (28 TAC § 15.4(b)), and an individual whose license is revoked generally may not reapply for five years (TIC § 4005.105).
- An individual agent must notify TDI of mailing-address changes, felony convictions, and regulatory actions (TIC § 4001.252); a licensed entity must report felony convictions and officer, director, or partner changes within 30 days.
6.4 Surplus Lines Agent Licensing: Qualifications, the Exam, Renewal, Discipline, and Required Notifications
A Texas surplus lines license is not an entry-level license. It sits on top of a property and casualty foundation and carries its own statutory, tax, and filing duties. The outline tests the license requirement, renewal, suspension and revocation, and required notifications to TDI.
1. When a Surplus Lines License Is Required
An agent licensed by Texas may not issue or cause to be issued an insurance contract with an eligible surplus lines insurer unless the agent holds a surplus lines license issued by TDI (TIC § 981.202). Section 6.2 lists the activities that require the license under 28 TAC § 15.101. A general lines P&C agent may refer surplus lines business to a surplus lines agent without one.
2. Qualifications (TIC § 981.203)
| Applicant | Requirements |
|---|---|
| Individual | (1) Has passed the surplus lines examination under Chapter 4002 and TDI rules; and (2) holds a current license as a general property and casualty agent (Chapter 4051) or a managing general agent |
| Corporation, LLC, or partnership | (1) At least one officer or director, or one active partner, has passed the surplus lines exam; (2) the entity holds a current general P&C agent or MGA license; and (3) it conducts surplus lines activities only through an individual licensed under § 981.203 |
| All applicants | Pay the application fee and submit a properly completed application (§ 981.203(b)) |
Nonresident exception (§ 981.203(a-1)): A nonresident individual need not hold a Texas general P&C license if every insured's home state is Texas, the individual is a licensed surplus lines agent in a home state that does not require a P&C license for that license and does not require its own admitted-market search, and each transaction runs through a P&C agent who searches the Texas market first. Nonresidents otherwise apply on the basis of their home-state surplus lines license, subject to reciprocity (28 TAC § 15.101(e)-(g); TIC Chapter 4056). TDI's application page says nonresidents must hold a surplus lines license from a reciprocal state.
Conduct of business (28 TAC § 15.102):
- An individual may be licensed only in his or her own name and may hold only one surplus lines license; an entity may hold only one.
- Business under an assumed name must also disclose the true name of the licensed agent.
- An agent may not shift, transfer, delegate, or assign its responsibilities to an unlicensed person, and may not file with the Stamping Office a policy it did not place.
- An agent may hire a third party to make its Stamping Office filings but remains responsible for their timeliness, accuracy, fees, and penalties.
MGA-only licenses: A surplus lines license granted to an MGA that is not also licensed under Chapter 4051 is limited to business originating through a licensed P&C agent and does not permit dealing directly with applicants (TIC § 981.220).
3. The Texas Surplus Lines Examination (Pearson VUE)
| Item | Detail |
|---|---|
| Exam series | InsTX-Surp60 (English); InsTX-Surp80 (Spanish) |
| Length | 60 scoreable questions, four-option multiple choice |
| Time limit | 60 minutes |
| Exam fee | $29 |
| Content outline | Texas Insurance Content Outlines, effective September 1, 2026: General Insurance Principles; Contracts; Texas Statutes and Rules Pertinent to Surplus Lines Insurance |
| Score | A scaled score; the reported passing score is 70, which is not the number or percentage of questions answered correctly |
| Retakes | A candidate who fails may schedule a new exam within one day; there is no limit on attempts |
| After passing | Complete fingerprints (IdentoGO) and apply through Sircon or NIPR within one year, or retake the exam |
TDI does not offer a temporary license, emergency license, or provisional permit for surplus lines.
4. Fees, Term, and Renewal
- Application fee: $50 for an agent or agency license (TDI).
- Term: Two years. An individual's license expires on the individual's birthday in even- or odd-numbered years, depending on the year it was issued; an entity's license expires on the second anniversary of issuance or renewal. If a person holds several licenses, all expire on the earliest expiration date (TIC § 4003.001).
- Renewal: File a renewal application with the nonrefundable fee (28 TAC § 15.101(h)). TDI lists a $50 renewal fee and a $25 late fee, and mails renewal notices 90 days before expiration.
- Continuing education: TDI states that no continuing education courses are required for a surplus lines license. The agent's underlying general lines P&C license has its own CE requirement, and letting that license lapse ends eligibility to renew the surplus lines license.
- Underlying license: A surplus lines license will not be renewed, and the agent may not act under it, if the agent fails to maintain or renew its P&C or MGA license, except for § 981.203(a-1) nonresidents (28 TAC § 15.4(b)).
5. Suspension, Revocation, and Termination
- Loss of qualifications: If a license holder does not maintain the qualifications for the license, TDI may revoke or suspend it or deny renewal (TIC § 981.221).
- Grounds (TIC § 4005.101): Willful violation of insurance law; a material misstatement in the application; obtaining a license by fraud; misappropriating or converting money belonging to insurers or insureds; fraudulent or dishonest acts; misrepresenting policy terms; incomplete comparisons to induce replacement; a felony conviction; rebating; and controlled-business violations.
- Remedies (TIC § 4005.102): Deny, suspend, revoke, or refuse renewal; probation of a suspended license; administrative penalty; or reprimand. A SOAH hearing is available (§ 4005.104).
- Surplus lines grounds (28 TAC § 15.4): Refusing examination, failing to file reports, and failing to collect and pay taxes and stamping fees. No reinstatement until fines, penalties, delinquent taxes, and delinquent stamping fees are paid (§ 15.4(c)).
- Five-year bar: An individual whose license application was denied or whose license was revoked may not apply again before the fifth anniversary of the denial or revocation, unless the denial was for failing the exam, incomplete CE or an unpaid CE fine, or an incomplete application (TIC § 4005.105).
6. Required Notifications to TDI
| Who | What | When | Source |
|---|---|---|---|
| Individual agent | Change of mailing address; felony conviction; administrative action by a financial or insurance regulator of Texas, another state, or the United States | "On a monthly basis" under the statute; TDI tells license holders to report contact changes immediately | TIC § 4001.252(a); 28 TAC § 1.502 |
| Corporation or partnership agent | Felony conviction of a licensed agent or of anyone required to file biographical information; out-of-state disciplinary events; addition or removal of an officer, director, partner, member, or manager | Within 30 days | TIC § 4001.252(c) |
| Surplus lines agent | Balances due to insurers over thresholds, loss of claims authority, excess loss funds, or termination of an insurer contract | Within 30 days | TIC § 981.217 (Section 8.3) |
A Texas resident wants to apply for an individual surplus lines agent license. What must the applicant have under TIC § 981.203?
A licensed Texas surplus lines agent asks how many continuing education hours TDI requires to renew the surplus lines license itself. What does TDI say?
TDI revokes an individual's agent license for misappropriating premium. Under TIC § 4005.105, when may the individual first apply for a new agent license?
A candidate receives a Pearson VUE score report showing a score of 70 on the Texas Surplus Lines exam. What does the number mean?