Windstorm insurance will cost more in the state if the Texas Windstorm Insurance Association (TWIA) board of directors approves a rate increase in a July 11 vote of the agency’s action and writing committee. TWIA directors are scheduled to meet on Aug. 8 to hear the committee’s recommendations.
The recommendation was by a 3 to 1 vote to increase the 2024 housing policies by 5% and the 2024 trade policies by 8%. TPLF General Manager David Durden announced the resignation of committee member Stephen Alexander before the vote.
Aaron Taylor, TWIA’s senior legislative and external affairs specialist, reported that the committee reviewed a 2023 rate adequacy analysis prepared by TWIA actuarial staff that found TWIA rates of 20% for residential coverage and 22% for commercial coverage are inadequate. As detailed by TWIA, a “rate adequacy analysis” is an assessment of whether rates are sufficient to cover the association’s operating expenses and expected losses from claims.
“The committee heard public input from stakeholders, including elected officials and other members of the coastal community,” Taylor advised, in order to approve — or reject — the next steps. In the year On Aug. 8, in Austin, “the TWIA Board will consider the committee’s recommendations, due diligence analysis and stakeholder input when voting to determine the content of the association’s annual required rate submission to the Texas Department of Insurance (TDI).
“Two-thirds of the board of directors must vote to approve an application for a dividend increase, and any rate increase must be approved by the Texas Insurance Commissioner.”
In the year An analysis of TWIA’s activities in 2022 says the association’s rates are “15% for residential policies and 11% for commercial policies.” Still, based on the actual committee’s recommendation, the TWIA Board of Directors voted at its August 2022 meeting to allow staff to submit 0% TDI for residential and commercial policies issued or renewed on or after January 1, 2023. .
Even without a fare increase, TWIA’s statutory balance sheet reflects TWIA’s financial position as of April 2023 compared to December 2022. In addition, the statutory income statement provides a comparison between actual and retained earnings and expenses for the four months ended April 30, 2023 and April 30, 2022.
Net income for the first four months of this year was $108.7 million -$16.0 million above budget of $92.7 million. TWIA attributed the higher-than-budget earnings to “projected loss experience, better-than-expected net premiums and investment returns.”
“TWIA is an insurer of last resort, providing windstorm and hail insurance to home and business owners who are unable to obtain coverage in the private market due to risk,” explained TWIA CEO Durden. “Having TWIA coverage allows people to live, work and do business in our coastal communities.
Today, the coastal communities served by TWIA face renewed economic challenges reminiscent of the TWIA’s founding. Higher inflation, especially in the construction and related sectors, means that more insurance coverage – from TWIA or private market insurance – is needed to protect the same property.
TWIA was established by the Texas Legislature as the Texas Catastrophe Property Insurance Association in 1971 after a series of hurricanes hit the Texas coast, causing many private insurance companies to exit the market and leaving property owners in Texas coastal counties without coverage. TWIA’s policy count reached an all-time high of over 275,000 policies in 2014.
Today, TWIA underwrites approximately 228,000 policies. Where applicable, TWIA staff report improved response protocols to better serve customers: a new digital payment solution for emergency claims payments, better defined roles for TWIA staff, better coordination and communication with accident and disaster response, and updated flyers for policyholders Papers. According to the agency, TWIA has activated its regularly updated “CAT Plan” 24 times for localized wind and snow events since January 1, 2012.
The statutory deadline for TWIA employees to file their annual dues with the Texas Department of Insurance is August 15th. The legal deadline to file a TWIA rate with the Insurance Commissioner is October 15th.