Texas Stamping Fee Rises, the First Change Since 2007

The surplus lines stamping fee rate in Texas increased at the beginning of year to 0.15 percent of the gross premium amount of surplus lines insurance policies. It’s the first change in the stamping fee for many years, according to Surplus Lines Stamping Office of Texas Executive Director Norma Essary.

The increased rate applies to new or renewal surplus lines policies with an effective date on or after Jan. 1, 2016. The previous rate was .06 percent, which will apply to policies effective on or before Dec. 31, 2015, until they are expired, are cancelled or until the next annual anniversary date (for multi-year policies).

This includes any subsequent endorsements, audits, cancellations, reinstatements, installments, and monthly or quarterly reports.

Essary said the stamping fee was reduced in 2007 to ensure that the quasi-governmental agency was operating with an appropriate amount of revenue. “We didn’t want to hold on to a lot of cash,” Essary said in a presentation at the Texas Surplus Lines Association annual meeting in November.

What has happened since 2007 is that SLSOT reserves are now well below the allowed maximum funding balance.

The stamping fee rate is determined by the Texas Department of Insurance. Since 1988 the fee has “kind of been all over the place,” Essary said. “We’re not going to hesitate to drop it back down if the need arises. We’d like to try and be as stable as we possibly can but … we are in an industry that has hard times, soft times and flat times.”

Essary took over from longtime executive director, Phil Ballinger, at the beginning of 2015. She said the agency, in addition to evaluating its performance in terms of compliance and regulatory responsibilities, is also looking at its financial, operational, technological and customer service capabilities.

Technology improvements are a priority, she said. A director of information technology services was hired in 2015 and the agency expects to make investments in technology this year.

“Technology continues to change, it continues to evolve, as well as the information and how we use it,” Essary said.

Topics Trends Texas Excess Surplus