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The Texas Division Insurance coverage (“TDI”) Commissioner Cassie Brown issued an order reducing the excess traces stamping price from .075% to .04% of gross premium ensuing from surplus traces insurance coverage contracts. The lower will apply to new or renewal surplus traces insurance policies with an efficient date on or after January 1, 2024.
Steering from the Surplus Traces Stamping Workplace of Texas (“SLTX”) states that the brand new stamping price fee will apply to every new or renewal surplus traces coverage with an efficient date on or after January 1, 2024. The brand new fee will even apply to coverage date extensions if efficient on or after this date. Insurance policies efficient on or earlier than December 31, 2023, will run to expiration, cancellation, or subsequent annual anniversary date (for multi-year insurance policies) on the present fee of .075%. This contains any subsequent endorsements, audits, cancellations, reinstatements, installments, and month-to-month or quarterly experiences.
The stamping price is evaluated yearly on the SLTX board of administrators (“Board”) annual assembly. Underneath the Texas Administrative Code Chapter 15 guidelines, the Board should assess the anticipated quantity of surplus traces premium in the course of the upcoming yr in opposition to their projected reserves (excluding funds for asset substitute), to make sure the reserves don’t exceed two occasions the typical of audited working bills for the five-year interval instantly previous the finances yr. Based mostly on end result of this evaluation, the Board recommends to TDI to extend, lower or take no motion relating to the stamping price.
The advice to lower the stamping price was revealed for a 20-day remark interval within the Texas Register on September 26, 2023, and on TDI’s web site. TDI obtained one remark in help of the change. The stamping price’s final lower from .15% to .075% went into impact January 1, 2021. There was no change to the stamping price in 2022 or 2023.
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