Texas Gov. Rick Perry has called a special session of the Texas Legislature that will begin July 1. One of the primary issues lawmakers will consider is continuing the operations of five state agencies, including the Texas Department of Insurance.
Options for financing the state highway system are also on the agenda, the governor said.
According to a bulletin released by the governor’s office, the special session will consider the following issues:
- Legislation extending the existence of five state agencies that were subject to sunset review by the 81st Legislature that would otherwise be abolished without legislative action, and to change the review schedule for certain state agencies to balance the Sunset Advisory Commission’s workload. These agencies include the Texas Department of Transportation, Texas Department of Insurance, Texas Racing Commission, Office of Public Insurance Counsel and Texas State Affordable Housing Corporation.
- Legislation allowing the Texas Department of Transportation to issue general obligation bonds, which have already been approved by voters, for highway improvement projects, and for the creation, administration, financing and use of a Texas Transportation Revolving Fund to provide financial assistance for transportation projects.
- Legislation extending the authority of the Texas Department of Transportation and a regional mobility authority to use comprehensive development agreements to design, finance, build and maintain transportation infrastructure.
Gov. Perry’s announcement came two days after he signed HB 4409, which enacts reforms to the Texas Windstorm Insurance Association (TWIA).
HB 4409 allows up to $2.5 billion in losses to be funded through various methods. Damage payments can now be funded by premiums, reserves, public securities, commercial paper and other market source financial instruments.
The legislation also allows TWIA to set variable rates among different rating territories taking into consideration the diverse impact a storm may have on any given area based on factors like proximity to the coast and computer modeling of risk factors.
In addition, the bill requires TDI to maintain a list of insurers who voluntarily write windstorm coverage and develop incentives for insurers to voluntarily write coverage along the coast. This provision will assist consumers in searching for other providers before TWIA, with the goal of shifting the coverage burden away from the association and ultimately establishing TWIA as an insurer of last resort, as originally intended.
Provisions establish a legislative oversight board and require a review by the Sunset Commission in 2015. Increased public input is now required on TWIA’s board of directors, increasing the number of public members from two to four and decreasing the number of insurer representatives from five to four.
TWIA has indicated that its Plan of Operation must be rewritten in part and some underwriting and processing procedures will be modified as a result of HB 4409.
The windstorm association is expected to seek approval from TDI to raise coastal property insurance rates by 10 percent.
Sources: Texas Governor’s Office, Texas Windstorm Insurance Association
Topics Texas Legislation
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