TWIA to Begin Agency Documentation Verification Survey on May 1

April 20, 2015

The Texas Windstorm Insurance Association alerted agents that as of May 1, 2015, TWIA would begin implementing an agency compliance program in order to verify agent documentation of private insurer coverage declinations and proof of flood insurance coverage on TWIA covered properties, if applicable.

While waivers are available under certain circumstances, a TWIA insured property must have flood insurance if it is located in one of the designated National Flood Insurance Program (NFIP) flood zones (V, VE or V1 – V30) and flood insurance is available for the property from the NFIP.

However, TWIA recommends that all its policyholders purchase flood insurance.

In its survey of agencies for proper documentation, TWIA will review 10 randomly chosen TWIA policies and request evidence that each policy complies with the declination of coverage and flood insurance requirements.

Agents will have 10 days from the date of notice to provide the requested documentation. Deadlines may be extended in the event of a catastrophe.

Documentation for declination of coverage should include: (1) name of authorized insurer refusing to write coverage; and (2) an indication of what the agent relied upon to meet the declination requirements (e.g. insurance guidelines, discussion with an underwriter). The documentation can be in the form of a note in the agent’s file.

Policies without the required declination or flood insurance are subject to cancellation. Agents will be provided 30 days to submit the required documentation for non- compliant policies.

For insurer declinations to be acceptable, the insurer must:

  • Be authorized to sell property insurance in Texas, however, surplus lines companies do not qualify for TWIA declination purposes.
  • Write at least one property insurance policy in a first tier coastal county that includes windstorm and hail insurance coverage.
  • Refuse to either: Offer (or refuse to renew) windstorm and hail insurance coverage for the subject property or provide basic insurance coverage sought by the applicant that is substantially equivalent to that offered by the association.

Under TWIA guidelines, the proof of declination must:

  • Document the refusal and include the name of the authorized insurer and the date of the declination. For example, a note in the file by the agent on what he or she relied upon (e.g., insur ance guidelines, discussion with an underwriter, etc.) to meet the declination requirement as well as the name of the insurer and the date of declination.
  • Be obtained for new coverage and then every three calendar years for renewal coverage.
  • Be maintained either in writing or in electronic format.
  • Be maintained for a period of not less than five years following the date of the submission of the application for TWIA coverage.

More information about the compliance verification program may found online at

Source: Texas Windstorm Insurance Association

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