Insurer Groups Say Windstorm Issue Must be Addressed in Texas

The Texas Legislature, which adjourned its regular session on May 30, passed a number of bills of interest to the property and casualty insurance industry, including tort reform legislation and a measure requiring that certificate of insurance forms be approved by the Texas Department of Insurance. Much to the chagrin of many in the industry, however, reforms to the Texas Windstorm Insurance Association (TWIA) remained elusive.

Gov. Rick Perry previously said he would call a special session in July to deal with TWIA reform if a measure failed in the regular session. Lawmakers headed back to the Capitol on May 31, however, for a special session to address school finance. It is possible TWIA will be added to the list of issues to be considered during the current special session, which can last up to thirty days.

Failure to pass TWIA reform during the regular session was a major disappointment, especially as hurricane season began June 1.

According to the Property Casualty Insurers Association of America (PCI), House Bill 272 would have allowed TWIA to build surplus through pre-event bonding instead of depending on post-event debt funding, required claims be filed within one year of an event, streamlined the dispute resolution process and contained litigation costs. While TWIA management issues and improvements in the bonding provisions were worked out before the end of the session, opposition by the trial bar to limiting TWIA’s liability for extraordinary damages killed the bill.

“As we enter hurricane season, it is of paramount importance that lawmakers enact reforms to TWIA,” said said Joe Woods, vice president for PCI. “The reforms in HB 272 will help protect coastal and inland insurance consumers, shore up TWIA’s financial structure and improve its administrative and claims handling operations. We encourage lawmakers to make reform of this quasi state agency their top priority and quickly pass this legislation during the special session.”

The American Insurance Association (AIA) also expressed disappointment that much needed windstorm insurance reforms failed to gain adoption.

Stressing that legislators must address TWIA funding and sustainability, Fred C. Bosse, AIA Southwest region vice president added: “AIA is hopeful that these issues can be successfully resolved during a special session.”

Lawmakers also reauthorized the Texas Department of Insurance (TDI), Office of Public Insurance Counsel (OPIC), Division of Workers Compensation (DWC) and Office of Injured Employee Counsel (OIEC).

Both PCI and AIA praised the legislature for passing bills that assure continous operations of the regulatory agencies.

Topics Catastrophe Natural Disasters Carriers Texas Legislation Windstorm