Senate Bill 562 Passes Through Committee

A proposed bill in the Senate would introduce an exemption for industrial insureds from the diligent effort requirement in the surplus lines market. Senate Bill 562 has been considered in public hearings by the Senate Business and Commerce Committee, and will now move to the full Senate.

The committee unanimously voted Wednesday, April 5, to add the bill to the local and uncontested calendar. The committee report on the bill will be distributed to every member of the Senate.

The industrial insured exception would mean that agents searching for coverage for certain insureds would not have to meet the diligent effort requirement that currently exists in state law. To be considered an industrial insured, the entity must meet the following criteria:

• Employs a qualified risk manager,
• Has paid more than $25,000 in property and casualty insurance premiums in the preceding 12 months, and
• Has at least 25 full-time employees

If the bill passes the Senate, it will be referred to a House of Representatives committee. The House companion bill, House Bill 1559, has been reported out of the House Insurance Committee, also with unanimous approval. It will now move to the full House, where it will be voted on and, if approved, will move to a Senate committee.