Insurance agencies in Texas are required to post a surety bond with the Texas Department of Insurance.
The bond is required as a prerequisite before the state will issue a resident insurance agency license.
Texas Insurance Code Sec. 4001.106 is the statute where the insurance requirement for insurance agencies can be read in further detail.
Licensed Texas insurance agencies must purchase and register a $25,000 Texas insurance bond with the Department.
The purpose of the bond is to protect consumers, that is, others from wrongful acts committed by an insurance company licensed in Texas.
More specifically, the Texas insurance agency bond is payable to the Department and allows for the recovery of a judgment given in a customer’s favor against an insurance company up to the $25,000 amount.
More broadly, the bond serves as a financial guarantee against acts of fraud, theft, or other criminal activity committed by an insurance agency licensed in the state.
An insurance agency bond is issued for one year.
Thereafter the bond must be renewed.
Applicants will want to see that this surety bond runs concurrently with an applicant’s insurance agency license.
Doing so prevents any lapses in bond coverage which may result in a suspension of licensing.
An $25,000 insurance agency bond may have a premium as low as 1% or $250 annually.
The premium that an applicant will ultimately pay for this bond will be determined by a credit check.
AmeriPro Surety Bonds will work to find the best surety bond pricing available.
We can get practically anyone bonded regardless of credit history.
Persons interested in founding an insurance agency will need to complete the following:
AmeriPro Surety Bonds is a surety bonds-only agency which provides license and permit, contractor, court, and fiduciary surety bonds throughout Texas.
We also provide surety bonds nationwide.