SB455

SB455 sets Texas-location and Texas-law requirements, with exceptions, for arbitration clauses in surplus lines insurance covering a risk wholly within Texas. Surplus lines coverage is a specialized insurance market used for risks that standard insurers often cannot or will not cover. The bill regulates a contract that contains an arbitration agreement; it does not require every policy to add one. Enrolled law; Official explanation of surplus lines.

The final text says the contract must provide for arbitration conducted in Texas and governed by Texas law. Its next clause requires Texas-law interpretation of the insurance contract, followed by an “unless” provision: the insurer and policyholder must agree to a different venue after the insurer gives written notice of its request, and the insurer must give a premium credit for the policyholder’s costs resulting from the venue change. The placement of that exception changed during passage; this is not an unconditional ban on every out-of-state arbitration agreement. Section 981.101(d).

A separate exception applies to surplus lines contracts with over $2 million in insured value: the insurer and policyholder may mutually agree to another arbitration venue and another state’s laws, provided the agreement is “in a form.” The statute uses that phrase; it does not name a particular approved form or specify a premium-credit condition in this separate exception. The threshold is insured value, not a claim payment or annual premium. Section 981.101(e).

The bill became law without the governor’s signature on May 27, 2025. It took effect September 1, 2025, but the new requirements apply only to contracts delivered, issued for delivery or renewed on or after January 1, 2026. Earlier contracts remain governed by the prior law for this purpose. Official history; Contract transition rule.