A bill in the Texas House aimed at shoring up the Texas Windstorm Insurance Association’s funding models while temporarily freezing Coastal policy premiums is a few votes away from becoming law.
Hunter says the bill, if passed, will require TWIA to get Insurance Commission approval for any proposed rate hikes for the next two hurricane seasons.
Current law allows TWIA to unilaterally enact annual five-percent rate hikes without such an approval.
You may remember last year when the TWIA board of directors asked the Insurance Commission to approve a 10 percent rate hike, only to have Governor Greg Abbott exert executive privilege in blocking that request, while calling on lawmakers to find another solution.
TWIA, which does not take a position in policy-making decisions, declined comment on the proposed law, which would also create a board of lawmakers whose job it will be to study TWIA’s funding structure and come up with a plan to improve it.
That funding structure, a mix of reinsurance, premium revenues and post-event bonds, has been a topic of debate in Austin for years, as lawmakers have struggled to strike a balance between affordable premiums for Coastal property owners and a funding structure that can weather back-to-back hurricane strikes.
We will follow-up if and when the bill becomes law with an analysis of how it will affect Coastal policyholders.