The Texas Windstorm Insurance Association (TWIA) announced the passage of an important milestone in its Assumption Reinsurance Depopulation Program (Assumption program): agents have approved 18,000 policies for possible transfer from TWIA to participating private market insurers.
The agent review period concluded on October 31. Policyholders will have the ultimate say on whether or not they choose to remain with TWIA, which is the property insurer of last resort for wind and hail along the Texas Gulf Coast.
Participating companies include Maison Insurance Co., United Property & Casualty Insurance Co., Weston Insurance Co., and The Woodlands Insurance Co.. This is the first time this kind of depopulation program has been implemented in Texas, but similar programs are already being used successfully in Florida and Louisiana to transfer policies from the residual market back to the private market.
TWIA and the participating companies will present offers to TWIA policyholders beginning Dec. 1, 2016. Policies will automatically transfer to participating companies on June 1, 2017. Policyholders may choose to remain with TWIA by opting out of the program by May 31, 2017.
“Depopulation will help TWIA’s financial stability by reducing its overall exposure to catastrophes by more than $5 billion. The increased competition in the insurance marketplace as a result of the participating depopulation companies will benefit all Texas policyholders,” said TWIA Chief Actuary James Murphy.
Depopulation is a series of programs authorized in 2015 by the 84th Texas Legislature and is designed to provide more choice for wind and hail coverage to policyholders in the private market. TWIA provides policy data to participating insurers who then make offers to assume, or transfer, TWIA policies. Acceptance of any offers by agents and policyholders is completely voluntary.
“We are very pleased with the success of the Assumption program to date, and part of the success of this program is thanks to the participating companies and agents,” said TWIA General Manager John Polak. “We understand that simply by fact of where they live, many Texas coast residents have not had a choice other than TWIA, and we are happy to be part of facilitating more choices for wind and hail coverage in our coastal communities.”
Source: Texas Windstorm Insurance Association
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