The Texas Department of Insurance has rejected a request from the Texas Windstorm Insurance Association for a 10 percent rate increase for both residential and commercial risks. But regulators left open the possibility that a rate increase of a lesser amount may be allowed.
In an order signed Oct. 15, Texas Insurance Commissioner Mike Geeslin said legislative changes enacted in HB 4409 require TWIA to modify the way it calculates its funding needs. TWIA, however, had calculated its request using an approach that was “essentially identical to the ratemaking approach used in previous years,” the order states.
TWIA took a $2.5 billion hit in 2008 from Hurricanes Ike and Dolly, virtually wiping out its reserves. State Sen. Mike Jackson of Pasadena had recommended no rate increase due to the fact that coastal residents are still recovering from Ike and Dolly. The Coastal Windstorm Insurance Coalition had urged decreases of 10 percent.
TDI staff found no need to raise rates at this time for 2010. Geeslin indicated that “some modest rate increases” might “be prudent and reasonable.”
TWIA Executive Director Jim Oliver told Insurance Journal that TWIA’s board at its December meeting would consider whether to pursue another rate filing.
Topics Catastrophe Natural Disasters Texas Windstorm Pricing Trends
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