TWIA Requests 10% Rate Increase; Approves $106.8M Assessment for Harvey Losses

August 20, 2018

The board of directors of the Texas Windstorm Insurance Association voted at its recent quarterly meeting to raise rates for residential and commercial properties by 10 percent next year, while acknowledging a rate inadequacy that is far greater than that.

TWIA, the insurance company of last resort for wind and hail for counties along the Texas coast, is required by law to file the proposed rate increase with the Texas Department of Insurance (TDI) by Aug. 15, 2018.

In an announcement on its website, the association said the board made the decision to increase rates for 2019 upon the recommendation of the Actuarial and Underwriting Committee. Input from a diverse group of stakeholders and actuarial reports show rates are currently inadequate by 32.2 percent for residential policies and 37.3 percent for commercial policies, TWIA said.

According to TWIA, the Texas Insurance Code (Chapter 2210) requires the association’s rates to be “reasonable, adequate, not unfairly discriminatory, and non-confiscatory as to any class of insurer.”

Rates must also be based upon sound actuarial principles and sufficient to sustain projected association losses and expenses.

TWIA said its ratemaking process focuses on rate adequacy and is not the same as the process for securing annual funding for potential catastrophic weather losses.

The proposed rate increase must be approved by the insurance commissioner. If approved, it will go into effect Jan. 1, 2019.

New business and renewal policies issued in 2018 will not be affected by the rate increase until the policies renew in 2019.


TWIA’s board also approved an additional Class 1 member assessment of $106.8 million for Hurricane Harvey losses. The recently approved assessment comes on top of the $175 million assessment approved by the board in May.

TWIA experienced an estimated $1.61 billion in total losses from Hurricane Harvey, which hit the Texas coast in late August 2017.

Under Review, Comments Sought

While TWIA is not subject to closure by the state’s Sunset Commission, the insurer is subject to periodic review by the commission as required by the Texas Sunset Act.

As it begins a review of TWIA, the commission is seeking ideas and comments with regard to the association.

The Sunset Commission, composed of legislators and public members, periodically evaluates a state agency to determine if the agency is still needed and to explore ways to ensure that the agency’s funds are well spent.

Sunset Commission staff will evaluate the association and issue a report in November 2018 recommending solutions to any problems found.

The Sunset Commission will meet to hear public testimony on the agency and the recommendations of the Sunset staff. Based on public input and the Sunset staff report, the commission will adopt recommendations for the full Legislature to consider when it convenes in January 2019.

The Texas Legislature will ultimately decide whether changes are needed to improve TWIA’s performance, based on the recommendations of the Sunset Commission.

Through the Sunset review, every Texan has the opportunity to suggest ways in which the mission and operations of the Texas Windstorm Insurance Association can be strengthened.

To share ideas about the agency, please send an email, use the comment form on the Sunset Commission website, or contact Carissa Nash of the Sunset staff.

Sunset Commission contact information is as follows:

Sunset Advisory Commission

P.O. Box 13066 Austin, Texas 78711

Phone: 512/463-1300

Fax: 512/463-0705;


The commission requests comments be submitted Sept. 7, 2018.

Topics Texas Trends Profit Loss Pricing Trends

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