Texas Windstorm Insurer Launches Depopulation Portal

The Texas Windstorm Insurance Association (TWIA) has initiated a process whereby interested insurance companies may access information on TWIA insured properties in an effort to move policies to private insurers.

The association writes wind and hail insurance on properties in 14 coastal counties and parts of Harris County. In a Nov. 3 bulletin, it announced that the Voluntary Coastal Windstorm Insurance Portal (VCWIP or the Portal) would be available to TWIA member companies on Nov. 10.

The Portal is voluntary for both insurers and policyholders. TWIA policyholders have been provided with “opt out” forms that, when submitted, instruct the association to exclude them from the portal. Policyholders may opt out at any time. If a policyholder declined to make their property information accessible but at a later time wants to receive offers from other insurers, the insured may submit a separate form to join the Portal. Both forms are available from the association.

Open only to TWIA member companies and their affiliates, carriers desiring access to the Portal are required to sign both nondisclosure and terms of use agreements before being allowed access.

One requirement of importance to TWIA agents is that policyholders retain the right of agent choice. The current agent may remain the agent of record either through a direct appointment or through a limited service agreement with the new carrier. An insurer is required to contact the policyholder’s agent with an offer of insurance at least 60 days prior to the renewal of any policy in which the insurer is interested.

“The Portal will contain information such as the policyholder’s name, insured property address, amount of insurance and other coverage options, and building characteristics such as construction and age of the home. … Carriers will contact the agent of record to make any offers of insurance; acceptance will be completely voluntary,” TWIA said in the Nov. 3 bulletin.

Assumption Issues

Before the launch of the Portal, a private insurer had approached TWIA about the possibility of assuming a large number of policies, according to TWIA board member Michael O’Malley. The offer raised the issue of whether the association has the explicit authority, as do residual markets in other states — such as Florida and Louisiana — to forge “an assumption deal whereby the company could take over those policies while they’re still on TWIA’s paper,” O’Malley said during an Oct. 23 meeting of TWIA’s Legislative/External Affairs Committee.

Regarding possible assumption agreements there are other concerns, as well, O’Malley said.

The matter of which insurer retains the liability for the policy when it passes to another carrier in an assumption deal is one.

Another pertains to claims protections that TWIA has under House Bill 3, which the Legislature passed in 2013 in response to problem of lingering claims from Hurricane Ike in 2008. It is unknown whether those claims protections would pass to the assuming private carrier.

O’Malley said TWIA staff would be asked to come up with suggestions to address both issues in proposals to the Texas Legislature, which convenes in January 2015.

Topics Catastrophe Carriers Natural Disasters Texas Agencies Windstorm