The Texas Windstorm Insurance Association is closer to hiring a firm to evaluate the agency's rate adequacy. TWIA's Actuarial & Underwriting Committee will meet Tuesday, March 10 in Austin to look over proposals from fifteen actuarial services who applied to do the job.
According to TWIA's website, during the December 10, the Texas Windstorm Insurance Association Board of Directors voted to assess member insurance companies $90 million based on losses from Hurricane Harvey and voted to defer further consideration of action regarding TWIA insurance rates on residential and commercial policies until its next statutorily required rate filing in August 2020. The member company assessment requires the approval of the Insurance Commissioner.
The assessment of member insurance companies is in addition to the $282 million already assessed and is based on an update to TWIA’s ultimate loss estimate for Hurricane Harvey to $1.7 billion from the previous estimate of $1.61 billion. By law, most insurers authorized to engage in the business of property insurance in Texas are required to be members of TWIA and share in a portion of the Association’s losses.
The Board voted to direct the Actuarial & Underwriting Committee to work with staff to develop a request for proposals to engage an independent actuarial firm not based in Texas to review TWIA’s rate analysis and use of hurricane modeling in determining rate adequacy and to prepare a report in support of the committee’s and the board’s annual rate review. The work of the independent actuarial firm is to be completed before TWIA considers its next statutorily required rate filing due August 2020.
TWIA identified 15 qualified firms and invited them to submit proposals by February 26. Seven firms submitted proposals by the deadline.
TWIA staff intend to score the candidate firms’ proposals against an agreed set of criteria. The Actuarial & Underwriting Committee will review the proposals and scoring and select three to four finalists for further consideration. The finalist firms will be invited to make a presentation and answer questions from the Committee at a future meeting, expected to be held later in March. TWIA expects to enter into an engagement with the selected firm by early April.
According to TWIA, the Committee will not be considering a rate filing at the March 10 meeting.