Funding Highlights
- TWIA losses and operating expenses are paid from the following funding sources: TWIA premiums and other revenue, the Catastrophe Reserve Trust Fund (CRTF), state financing arrangements, member company assessments, and reinsurance or alternative risk financing.
- TWIA is not a state agency and does not receive General Revenue funds. Legislation enacted in 2025 allows TWIA to enter into financing arrangements with the state to borrow from the state’s Economic Stabilization (“Rainy Day”) Fund if storm losses exceed current-year premiums and amounts in the TWIA Catastrophe Reserve Trust Fund. The law requires state financing arrangements to be repaid within three years through a statewide surcharge on property insurance policies.
- TWIA has never been unable to pay claims since its inception in 1971
- TWIA will have access to $4.3 billion for the 2026 hurricane season
Authority & Legislation
Texas Insurance Code Chapter 2210 provides the funding structure to be used to pay TWIA’s insured losses and operating expenses. TWIA’s funding sources, as outlined in statute, provide a combination of state financing arrangements, member company assessments, and reinsurance or alternative risk financing. The law requires total funding in an amount not less than the probable maximum loss for the Association for a catastrophe year with a probability of one in 50 (2 percent probability).
Important Provisions
Current law 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 state financing agreements
- Up to $1 billion in member company assessments
- Additional funding in the form of reinsurance or alternative risk financing such that total funding is at least equal to a 50-year hurricane season.
2026 Hurricane Season Funding
For the 2026 hurricane season, TWIA will have access to funding totaling $4.3 billion.
