The Actuarial & Underwriting Committee for the Texas Windstorm Insurance Association (TWIA) has recommended that the association’s board vote at its Aug. 3 meeting to file for a 5% rate increase for residential and commercial policies.
TWIA is the property insurer of last resort for wind and hail in counties along the Texas coast. It is required by state statute to make a rate filing with the Texas Department of Insurance by August 15 each year. The annual rate filing is subject, in certain circumstances, to review and approval by the insurance.
The rate increase recommendation came after the committee reviewed the Rate Adequacy Analysis prepared by the association’s actuarial staff. The analysis finds that TWIA rates are inadequate by 39 percent for residential coverage and 46 percent for commercial coverage.
The committee also heard public comment from stakeholders including elected officials and other coastal community members.
The committee also voted to have staff conduct additional research into issues related to rates and report back to the committee so that it can make further recommendations to the board at a later date.
Issues that the committee has asked staff to provide information on are:
- A review of the amount of current building code credits offered by TWIA;
- Additional research on retrofit building credits;
- Identifying existing insured property that might be eligible for credits that are not being provided; and
- Identifying and comparing discounts in other states, including Florida Citizens Property Insurance Corporation, and the private market to TWIA.
The committee also received a review by TWIA staff of several proposed policy form updates and a proposed update to the Association’s Rate Manual. It is expected that TWIA staff will recommend to the TWIA board of directors at its August meeting that the filings be submitted to TDI for approval. While some of these changes may be considered rate filings by TDI, they will not result in an overall increase in rates, TWIA said.
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