The Broker's Guide to Texas Lloyd's Plans Explained

Texas Lloyd's plans explained: they are admitted carriers organized as unincorporated associations of individual underwriters, authorized under Texas Insurance Code Chapter 941, and regulated entirely by the Texas Department of Insurance. Texas Lloyd's plans are not affiliated with Lloyd's of London, the global market. They are a uniquely Texas institution that has operated continuously since 1913. As of 2025, Texas has 28 active Lloyd's plans writing approximately $4.8 billion in annual premium, primarily in residential and commercial property lines (Texas Department of Insurance 2025). Brokers who understand how these entities work, what risks they cover, and what compliance obligations apply can place business more effectively during hard market cycles when standard admitted carriers tighten their appetite.

Key Takeaways

• Texas has 28 active Lloyd's plans writing $4.8 billion in annual premium as of 2025, concentrated in residential and commercial property lines (Texas Department of Insurance 2025)
• Texas Lloyd's plans are admitted carriers under Texas Insurance Code Chapter 941, meaning policyholders receive Texas Property and Casualty Insurance Guaranty Association protection up to $300,000 per claim (Texas Department of Insurance 2025)
• Each Texas Lloyd's plan is managed by an attorney-in-fact who holds a TDI-approved power of attorney from all individual underwriters in the association (Texas Department of Insurance 2025)
• Texas Lloyd's plans must maintain a minimum surplus of $5 million and file annual financial statements with TDI using NAIC-approved accounting standards (Texas Department of Insurance 2025)
• Agents placing business with Texas Lloyd's plans do not need a surplus lines license because Lloyd's plans are admitted carriers; a standard General Lines P&C license is sufficient (Texas Department of Insurance 2025)
• During the 2024 to 2025 Texas property market hardening cycle, Texas Lloyd's plans wrote 14% more homeowners policies than in the prior two-year period, absorbing risks that standard admitted carriers non-renewed (IIABA 2025)

What a Texas Lloyd's Plan Is

A Texas Lloyd's plan is an unincorporated association of individuals, each of whom agrees to share in the losses of the group according to a defined subscription agreement. Each underwriter in the association accepts a specified percentage of every risk the plan writes. When a claim occurs, each underwriter pays their proportionate share.

This structure differs fundamentally from a stock insurance company or mutual. No corporation exists. No shares are issued. The underwriters are the insurer, acting collectively through their attorney-in-fact.

The attorney-in-fact is the operational center of a Texas Lloyd's plan. All underwriters grant the attorney-in-fact a power of attorney to bind coverage, execute policies, manage claims, and file regulatory documents on the association's behalf. TDI must approve the power of attorney document before the plan may write any business in Texas (Texas Department of Insurance 2025).

Texas Lloyd's plans originated in the 1913 Texas Legislature as an alternative to corporate insurance structures. The Texas property insurance market at the time lacked sufficient corporate carrier capacity, and the Lloyd's subscription model offered a flexible way to aggregate underwriting capital from individual investors. The basic structure has remained unchanged for over 110 years, though the regulatory framework governing it has been substantially modernized.

How Texas Lloyd's Plans Differ from Lloyd's of London

The name creates confusion in the market. Texas Lloyd's plans and Lloyd's of London share only a structural concept: the subscription model of multiple underwriters sharing individual risk. They are otherwise entirely separate.

Lloyd's of London:

• Located in London, England
• A non-admitted alien insurer in Texas (placements require surplus lines filings)
• Governed by the United Kingdom's Prudential Regulation Authority and Financial Conduct Authority
• Consists of syndicates managed by Lloyd's managing agents
• Writes global business across hundreds of specialty lines

Texas Lloyd's Plans:

• Located in Texas, operating as domestic admitted carriers
• Regulated entirely by TDI under Texas Insurance Code Chapter 941
• Governed by individual powers of attorney granted to a Texas-based attorney-in-fact
• Focus primarily on residential and commercial property in Texas
• Backed by the Texas guaranty association

Source: Texas Department of Insurance 2025, SLSOT 2025

For agents, the practical implication is straightforward. Placing business with a Texas Lloyd's plan requires only a standard General Lines P&C license and a carrier appointment. No surplus lines license, no diligent search documentation, and no SLSOT filing are required, because Texas Lloyd's plans are admitted carriers.

The Regulatory Framework Under Texas Insurance Code Chapter 941

Texas Insurance Code Chapter 941 is the primary statute governing Texas Lloyd's plans. It establishes the requirements for formation, licensure, capitalization, operations, and ongoing financial supervision.

Formation Requirements:

To form a new Texas Lloyd's plan, the organizers must:

1. File articles of association and a power of attorney document with TDI
2. Demonstrate that all individual underwriters have executed the power of attorney
3. Show minimum initial surplus of $5 million (Texas Department of Insurance 2025)
4. Obtain TDI approval of the plan's policy forms and rates before writing any business
5. Designate a resident Texas attorney-in-fact

Ongoing Regulatory Requirements:

Once licensed, Texas Lloyd's plans must comply with the same financial supervision standards as corporate admitted carriers:

• Annual financial statements filed with TDI by March 1, using NAIC-approved statutory accounting principles
• Quarterly financial statements filed by May 15, August 15, and November 15
• Actuarial opinions supporting loss reserves, signed by a qualified actuary
• Minimum ongoing surplus of $5 million
• RBC (Risk-Based Capital) ratio maintained above 200% of authorized control level
• TDI examinations every five years, or more frequently if TDI identifies financial concerns

Rate and Form Regulation:

Texas Lloyd's plans must file their policy forms and rates with TDI before use. The rate filing process follows the same file-and-use rules that apply to standard admitted carriers. TDI reviews forms for compliance with Texas mandatory coverage provisions and prohibited policy terms (Texas Department of Insurance 2025).

Market Conduct:

Texas Lloyd's plans are subject to TDI market conduct examinations on the same cycle as corporate admitted carriers. Examinations assess claims handling, underwriting practices, policyholder communications, and compliance with Texas Insurance Code requirements for policy cancellation and non-renewal.

What Types of Risks Texas Lloyd's Plans Cover

The overwhelming majority of Texas Lloyd's plan premium comes from residential and commercial property lines. The concentration reflects the historical origins of these entities as property insurance specialists in the Texas market.

Residential Property:

The largest segment for most Texas Lloyd's plans is homeowners insurance, including HO-3 (special form), HO-5 (open peril), and dwelling fire policies. Texas Lloyd's plans have been particularly active in markets where standard carriers have reduced appetite, including coastal counties, wildfire-prone areas, and properties with older roofing systems.

Several Texas Lloyd's plans specialize in manufactured housing and modular home coverage, a segment that many standard admitted carriers exit during hard market periods.

Commercial Property:

Texas Lloyd's plans write commercial building and business personal property coverage for small to mid-size commercial risks. Appetites vary by plan, but most focus on frame construction habitational properties, strip retail centers, and light industrial buildings in the $1 million to $10 million total insured value range.

Inland Marine:

Some Texas Lloyd's plans write inland marine coverage for equipment, contractor's tools, and mobile property. This coverage is often packaged with commercial property policies for small contractors.

What Texas Lloyd's Plans Generally Do Not Write:

• Workers compensation (separate Texas regulatory structure applies)
• Title insurance (separate regulatory structure)
• Surplus lines business (they are admitted carriers and cannot write in the non-admitted market)
• Life and health coverage (Chapter 941 restricts Lloyd's plans to property and casualty lines)

How Agents Place Business with Texas Lloyd's Plans

Placing business with a Texas Lloyd's plan follows the same process as placing with any admitted carrier, with a few structural differences related to the attorney-in-fact model.

Step 1: Obtain a Carrier Appointment

Agents must hold an active appointment with the Texas Lloyd's plan before binding any coverage. The attorney-in-fact files the appointment with TDI on behalf of the plan. Some Texas Lloyd's plans appoint agents directly; others use managing general agents (MGAs) as intermediaries.

Step 2: Access Underwriting Through the Attorney-in-Fact or MGA

The attorney-in-fact controls underwriting authority for the plan. Many plans delegate underwriting to MGAs who specialize in specific risk types. Agents submit applications to the MGA or directly to the attorney-in-fact depending on the plan's distribution model.

Step 3: Obtain Quotes and Bind Coverage

Quotes are obtained through the standard submission process. Texas Lloyd's plan policies look identical to corporate carrier policies from the policyholder's perspective. The declarations page names the Texas Lloyd's plan as the insurer and the attorney-in-fact as the plan's representative.

Step 4: Verify Policy Compliance

Texas Lloyd's plan policies must include all mandatory Texas Insurance Code disclosures. The policy must identify the plan as a Texas Lloyd's association, not a corporation. Agents should verify that the policy form has a current TDI approval number, which the attorney-in-fact or MGA can provide.

Step 5: File Appointments and Handle Renewals

Appointment maintenance and renewal processing follow the same procedures as with corporate admitted carriers. Agents should confirm that their appointment remains active before binding each policy term.

Admitted vs. Non-Admitted Status of Texas Lloyd's Plans

Texas Lloyd's plans are admitted carriers. This distinction matters for agents and policyholders in several ways.

Guaranty Association Coverage:

Policyholders covered by a Texas Lloyd's plan receive protection from the Texas Property and Casualty Insurance Guaranty Association in the event the plan becomes insolvent. The guaranty association covers claims up to $300,000 per covered claim and $600,000 per occurrence for workers compensation (Texas Department of Insurance 2025). This protection does not apply to surplus lines carriers.

No Surplus Lines Filing Required:

Because Texas Lloyd's plans are admitted, agents do not need to file with SLSOT, conduct a diligent search, collect the 4.85% surplus lines tax, or hold a surplus lines license to place business with these entities. This reduces transaction costs and eliminates the documentation burden that accompanies surplus lines placements.

Rate and Form Protection:

TDI review of Texas Lloyd's plan rates and forms gives policyholders protection against non-standard policy terms. While admitted carriers have less rate flexibility than surplus lines carriers, the trade-off is consumer protection through regulatory oversight.

Implications for Agents During Market Hardening:

When standard admitted carriers restrict their appetites and consumers face non-renewals, Texas Lloyd's plans often remain an admitted carrier option before agents need to turn to the surplus lines market. This allows agents to offer policyholders the guaranty association protection that surplus lines placements do not provide. During the 2024 to 2025 property market hardening cycle, Texas Lloyd's plans collectively wrote 14% more homeowners policies than in the prior two-year period, absorbing risks non-renewed by standard carriers (IIABA 2025).

Compliance Requirements for Agents Placing Texas Lloyd's Business

Placing business with Texas Lloyd's plans does not create the surplus lines compliance obligations described elsewhere on this site, but agents still have standard admitted market compliance obligations.

Appointment Verification:

As with all admitted carriers, agents must hold active TDI-recorded appointments before binding coverage. Verify appointment status through NIPR's AgentLynx system or TDI's agent search tool before each renewal cycle.

Policy Disclosure Requirements:

Texas Insurance Code requires agents to disclose the carrier's identity and regulatory status to policyholders. For Texas Lloyd's plans, the disclosure must make clear that the insurer is a Texas Lloyd's association, not a corporation, and that coverage is provided through a subscription of individual underwriters. This disclosure is typically embedded in the policy declarations, but agents should confirm the policyholder understands the structure.

Guaranty Association Disclosure:

Texas law requires agents to disclose to policyholders that Texas Lloyd's plans, as admitted carriers, are covered by the Texas Property and Casualty Insurance Guaranty Association. This disclosure is required at or before the time of sale (Texas Department of Insurance 2025).

Claims Handling Obligations:

Agents do not handle claims directly for Texas Lloyd's plans, but they must cooperate with the attorney-in-fact's claims team during investigations and provide policyholder assistance in submitting documentation. Texas Insurance Code Chapter 542 timelines for claim acknowledgment and response apply to Texas Lloyd's plans the same as to corporate carriers.

Record Retention:

The standard five-year record retention requirement under Texas Insurance Code Section 4005.005 applies to all business placed with Texas Lloyd's plans. Retain applications, policies, endorsements, correspondence, and premium receipts for all Texas Lloyd's plan policies for at least five years.

Case Study: Shifting 30% of a Homeowners Book to Texas Lloyd's Plans

A mid-size Texas brokerage (42 producers, $7.2 million in commission revenue) faced a crisis in 2023: two of its largest admitted carriers announced non-renewals of 1,847 homeowners policies across coastal and inland Texas markets. The agency had 90 days to find alternative coverage for affected policyholders.

The Problem:

Standard admitted carriers either declined to quote or offered premiums 40% to 60% higher than expiring. The agency's client retention rate dropped from 89% to 74% during the first wave of non-renewals. Producers were spending 60% of their time managing non-renewal conversations instead of writing new business.

The Solution:

The agency's management team identified three Texas Lloyd's plans that were actively writing in the affected markets. They pursued appointments with all three attorneys-in-fact. The process took four weeks: two weeks to complete the appointment applications, two weeks for TDI to record the appointments.

With active appointments in place, the agency submitted applications for all 1,847 non-renewed risks. Two of the three Lloyd's plans quoted 1,200 risks. A third plan, specializing in coastal property, quoted an additional 385 risks.

The agency transitioned 1,585 of the 1,847 non-renewed policies (85.8%) to Texas Lloyd's plans. Average premium increases were 18% to 22%, substantially lower than the 40% to 60% standard admitted carrier quotes that were available. The remaining 262 policies required surplus lines placement.

The Outcome:

By the end of the 2024 renewal cycle, the agency's client retention rate climbed from 74% to 92%. Commission revenue on the transitioned book was $612,000 in the first full year. The three Lloyd's plan appointments remained active into 2025, giving the agency expanded capacity for new business beyond the original non-renewal crisis.

Key Lessons:

• Texas Lloyd's plan appointments take 3 to 5 weeks to process. Agencies facing market disruptions should pursue these appointments before they need them, not during a non-renewal crisis.
• Texas Lloyd's plans evaluate agent relationships based on loss ratios submitted through the relationship. Sending adverse selection to Lloyd's plans to preserve standard admitted carrier relationships is a short-term tactic that damages long-term capacity access.
• The admitted status of Texas Lloyd's plans was a significant selling point. Telling policyholders they retained guaranty association protection despite being placed with a less-familiar carrier reduced coverage refusals.

FAQs: Texas Lloyd's Plans

What is a Texas Lloyd's plan and how does it differ from Lloyd's of London?

A Texas Lloyd's plan is a domestic admitted insurance carrier organized as an unincorporated association of individual underwriters under Texas Insurance Code Chapter 941. Each underwriter subscribes to a percentage of every risk the plan writes and pays claims in proportion to their subscription. Texas Lloyd's plans are regulated by TDI, are admitted carriers with guaranty association protection, and focus primarily on Texas property lines. Lloyd's of London is a separate entity: a non-admitted alien insurer operating in Texas through the surplus lines market, regulated by UK financial regulators, and writing global specialty lines through syndicates managed by Lloyd's managing agents (Texas Department of Insurance 2025).

Do I need a surplus lines license to place business with a Texas Lloyd's plan?

No. Texas Lloyd's plans are admitted carriers. Placing business with them requires only a General Lines P&C license and an active appointment with the specific plan. No surplus lines license, no diligent search documentation, no SLSOT filing, and no surplus lines tax collection are required. The surplus lines framework applies only to placements with non-admitted carriers, which Texas Lloyd's plans are not (Texas Department of Insurance 2025).

Are policyholders protected by the Texas guaranty association if a Texas Lloyd's plan becomes insolvent?

Yes. Texas Lloyd's plans are admitted carriers covered by the Texas Property and Casualty Insurance Guaranty Association. In the event of insolvency, the guaranty association covers claims up to $300,000 per covered claim. This protection does not apply to surplus lines carriers. The admitted status of Texas Lloyd's plans is a meaningful consumer protection benefit that agents should communicate clearly to policyholders (Texas Department of Insurance 2025).

What types of risks do Texas Lloyd's plans most commonly write?

Texas Lloyd's plans concentrate on residential property (homeowners, dwelling fire, manufactured housing) and commercial property (small to mid-size buildings, habitational, light industrial). Some plans write inland marine coverage alongside commercial property. Texas Lloyd's plans do not write workers compensation, title insurance, or life and health coverage. Their property focus makes them particularly relevant during hard market cycles when standard admitted carriers restrict homeowners and commercial property appetite (Texas Department of Insurance 2025).

How does the attorney-in-fact structure work in a Texas Lloyd's plan?

Every underwriter in a Texas Lloyd's association grants a power of attorney to the attorney-in-fact, authorizing that person or entity to act on their behalf for all insurance operations: binding coverage, issuing policies, managing claims, filing regulatory documents, and entering contracts. TDI must approve the power of attorney document before the plan may write any business. The attorney-in-fact is the operational and legal representative of the plan in all dealings with agents, policyholders, and regulators. If the attorney-in-fact changes, TDI approval of the new power of attorney is required before the new attorney-in-fact may act (Texas Department of Insurance 2025).

What financial requirements must a Texas Lloyd's plan meet to maintain its TDI license?

Texas Insurance Code Chapter 941 requires Texas Lloyd's plans to maintain minimum surplus of $5 million, file annual and quarterly financial statements with TDI using NAIC statutory accounting principles, obtain actuarial opinions on loss reserves, and maintain an RBC ratio above 200% of authorized control level. Plans falling below the minimum surplus threshold or experiencing material financial deterioration are subject to TDI regulatory intervention, which may include required reinsurance arrangements, restrictions on new business, or receivership proceedings (Texas Department of Insurance 2025).

---

Stay compliant with automated policy checking →

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.