A bill has been filed that would drastically change the structure and/or funding for Texas’ insurer of last resort for wind and hail along the coast.
Senate Bill 18 by Sen. John Corona would create the Texas Property Insurance Program, a statewide assigned risk plan to be administered by a managing general agent, and modify the operation of the FAIR Plan Association and the Texas Windstorm Insurance Association.
Under SB 18, beginning Apr. 1, 2015, TWIA would cease issuing new policies for residential exposures.
Sen. Corona also filed SB 19, which addresses mitigation against property loss from natural catastrophes. Among other things, the bill would make mitigation grants “available to residential property owners in areas susceptible to windstorm, hail, wildfire, and other natural catastrophes.”
In addition to Sen. Corona’s bills, Sen. Juan Hinojosa of McAllen has filed SB 1089, “Relating to the operation of the Texas Windstorm Insurance Association and to catastrophe preparedness in the seacoast territories of this state.”
One focus of the bill is to shore up TWIA’s finances and rebuild its reserves, which were wiped out by claims and litigation from Hurricane Ike in 2008.
The provisions of SB 1089 include a premium surcharge to be assessed by property insurers that provide coverage in first tier coastal counties to each first tier policyholder as necessary to help pay back any public securities that may have been triggered by a coastal catastrophic event.
Policies subject to possible assessments include windstorm and hail policies, and all other policies that cover property located in first tier counties, including automobiles.
Claims from 2008’s Hurricane Ike ongoing Ike-related lawsuits against TWIA have devastated the association’s finances, and legislative limits currently hamper its ability to increase funding for catastrophes.
The full text of the filed measures may be found on the Legislature’s website, http://www.capitol.state.tx.us/.