The Texas Windstorm Insurance Association Board of Directors voted to direct staff to file a rate increase of 5% for residential and commercial policies in its required annual filing with the Texas Department of Insurance (TDI). The filing, which was approved by a vote of 5 to 3, must be made by August 15 and may be subject to review by TDI in some circumstances. The new rates are expected to go into effect for policies issued or renewed starting January 1, 2022.
The vote followed the Board receiving a recommendation for a 5% increase from TWIA’s Actuarial & Underwriting Committee. The Board also heard public comments from stakeholders including elected officials and other coastal community members. TWIA’s 2021 Rate Adequacy Analysis, prepared by the Association’s actuarial staff, indicates that TWIA’s current rates are inadequate by 39 percent for residential coverage and 46 percent for commercial coverage.
The Board also took the following actions:
- Directed staff to file proposed increases to the Association’s maximum liability limits with TDI. State law requires the Association to submit a filing related to these limits by September 30 of each year. The limits establish the maximum amount of coverage a policyholder can purchase from TWIA. This filing does not impact TWIA’s rates and is benchmarked as required by law to match publicly available construction cost index information. The proposed limits are as follows (additional details available in the meeting materials):
- Dwellings and individually owned townhouses: $2,037,000
- Manufactured homes: $96,600
- Contents of an apartment, condominium, or townhouse: $426,000
- Commercial structures and related content: $4,927,000
- Directed staff to file several proposed policy form updates and a proposed update to the Association’s Rate Manual for TDI approval. While some of these changes may be considered rate filings by TDI, they will NOT result in an overall increase in TWIA rates.
- Directed staff to review agent efforts required to issue new and renewal business with TWIA’s Agent Advisory Group and report its feedback to the Board.
- Approved the engagement of the firm of Calhoun, Thomson + Matza for auditing/accounting services for the next year and authorized other non-auditing services.
- Pursuant to Texas Insurance Code Section 2210.452(b), directed staff to notify the Texas Comptroller of Public Accounts that the entire balance of the Catastrophe Reserve Trust Fund is required to be kept available to fund the payment of insured losses.
- Provided guidance to staff on a process for the selection of a reinsurance broker and a separate firm to provide catastrophe modeling consulting services.
If you are a member of the media and have questions about the Board meeting, please email MediaRelations@TWIA.org.
The meeting materials and archived recording for the Board meeting may be found on our archived meetings webpage.