The board of directors of Texas’ property insurer last resort for wind and hail in the state’s coastal counties has voted to file a 0% rate change with the Texas Department of Insurance.
The Texas Windstorm Insurance Association is required by law to submit a rate filing with TDI every August.
TWIA’ actuarial and underwriting committee in July recommended the 0% rate change.
TWIA’s board voted in its Aug. 4 quarterly meeting to revisit the issue of rates at an interim meeting to be scheduled before its December quarterly meeting.
TWIA’s annual rate filing, due by August 15 each year, is subject, in certain circumstances, to review and approval by the insurance commissioner. The statute allows TWIA to make a rate filing with TDI at any time.
TWIA’s 2020 Rate Adequacy Analysis, prepared by the association’s actuarial staff, indicates that TWIA’s current rates are inadequate by 44 percent for residential coverage and 49 percent for commercial coverage.
The actuarial and underwriting committee was directed to make a recommendation regarding a subsequent rate filing upon the completion of an independent study currently underway of TWIA’s rate adequacy and use of hurricane modeling in estimating potential losses in its rate-setting process. The independent study is being performed by the actuarial consulting firm Willis Towers Watson, which provided a status update regarding their work at the board meeting. Willis Towers Watson advised the board that their report will be completed by the end of August.
Other actions taken by the board include:
- Directing TWIA staff to make a filing seeking no change to the maximum limits of liability on TWIA policies in its required annual filing regarding that topic with the Texas Department of Insurance.
- Approving with modifications the legislative recommendations and a draft of TWIA’s Biennial Report to the Legislature presented by the Legislative and External Affairs Committee. The TWIA board recommends that the Legislature consider fortified home construction effectiveness in other states, whether TWIA should pursue such a program, and whether the State of Texas could provide funding support.
- Approving selection of auditors/accountants for 2020 and authorizing non-audit services as presented by TWIA staff and voting to conduct a request for proposals for these services in 2021.
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