Texas Gov. Greg Abbott has effectively extended until June 16, 2019, the deadline for approval or disapproval of a recent rate increase filed by the Texas Windstorm Insurance Association.
The governor did so by suspending a section of the Insurance Code requiring that TWIA’s August rate filing, which requested a 10 percent hike in both commercial and residential rates, be approved or disapproved by Oct. 15, 2018.
In a letter to Texas Insurance Commissioner Kent Sullivan, Abbott said a rate increase at this time would be unfair to Texas coastal residents who continue to recover from Hurricane Harvey, which devastated the Texas coast in late August 2017.
The rate hike has been opposed by state lawmakers representing areas hard hit by last year’s storm.
Under state law, if no action on the rate increase was taken by the insurance commissioner as of Oct. 15, the rate would be considered approved.
“Strict compliance with this time frame would deprive the Legislature of the opportunity to address any actuarial deficiency in TWIA during the upcoming legislative session and could force a decision that hinders efforts to cope with the declared disaster,” Abbott said in his letter to Commissioner Sullivan.
The state legislature convenes every two years and will begin a new session in early 2019.
TWIA has indicated its rates are currently inadequate by 32.2 percent for residential policies and 37.3 percent for commercial policies.
If they had been approved or allowed to become effective, TWIA’s filed rates would have gone into effect beginning Jan. 1, 2019. New business and renewal policies issued in 2018 would not have been subject to the rate increase until the policies renew in 2019.
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