Is TWIA funded by tax revenue?Published on: May 22, 2023
No, TWIA does not receive tax revenue or any other state funds for operations of the Association. Texas Insurance Code Chapter 2210 outlines the funding sources TWIA must use to pay the insured losses and operating expenses of the Association. Prior to 2009, the Association funded losses through premiums and potentially unlimited assessments on insurance companies. HB 4409, enacted in 2009, significantly changed Association funding. Current statute provides that insured losses and operating expenses be paid from the following funding sources, in order: TWIA premiums and other revenue; the Catastrophe Reserve Trust Fund (CRTF), an account held by the Comptroller containing the net gains from TWIA operations from prior years; up to $1 billion in Class 1 public securities, repaid from premiums and other revenue of the Association; up to $1 billion in Class 2 public securities, repaid 70% by surcharges to coastal policyholders and 30% by assessments to insurance companies; up to $500 million in Class 3 public securities, repaid by assessments to insurance companies. The Association is authorized to purchase reinsurance to provide additional capacity for paying losses and operating expenses.