T-26 Guideline - TX Additional Insured Endorsement

Explanation:

This endorsement is primarily used in estate planning situations where title in individuals has been conveyed to a living trust, acquisition of interest under an agreement existing at the original policy date or family partnership or family corporation, limited liability company.  Texas Procedural Rule P-57 provides the basic rules for issuance of this endorsement.

Please also see R-33 for more information regarding this endorsement. 

To issue the endorsement the additional insured must be:

(a)        the trustee or successor trustee of a Living Trust to whom the insured transfers the title after Policy Date, and/or the beneficiaries of the Living Trust, or

(b)        any partner, member or stockholder that acquires the interests of the other owners of the insured in accordance with the terms and provisions of a written agreement in effect at Date of Policy, or

(c)        a family partnership or family corporation solely composed of or owned by members of the insured's family and the insured.

For Limited Liability companies the rule provides:

(i)         there will be a transfer(s) of all or any part of the Limited Liability Company members' interests in the insured to any transferee(s), or

(ii)        the withdrawal(s) of one or more of the members from the Limited Liability Company, or

(iii)       the addition(s) of one or more persons or entities as members of the Limited Liability Company.

Underwriting Requirements:

We require:

A review of the trust, written agreement that allows for the acquisition of the interest of the other owners that was in existence at Date of Policy, the family partnership agreement or family corporations founding documents and any agreements such as bylaws and operating agreements.  This review should satisfy you that the documents allow the additional insured entry into the respective organization.  For limited liability companies you need to review the founding documents and any later documents that create or allow the transfer of interest or withdrawal or addition of members.

For further guidance, refer to the applicable subsections in Section 11.04 of the National Underwriting Manual on Virtual Underwriter.
https://www.virtualunderwriter.com/en/underwriting-manuals/2014-1/UM00000208.html