TWIA Board Sets Storm Season Funding for 2021, Takes No Action on a Rate FilingPublished on: March 23, 2021
The TWIA Board of Directors held its quarterly meeting via web conference today, directing TWIA staff to secure reinsurance in addition to the funding provided by statute to provide coverage totaling $4.03 billion for the 2021 hurricane season and electing officers.
2021 Hurricane Season Funding and Reinsurance
The Board received a presentation from staff and reinsurance broker Guy Carpenter & Company, LLC on funding levels for the 2021 hurricane season and reinsurance options to meet the Association’s required statutory funding level. The Board voted to establish the probable maximum loss for the Association for a hurricane season with a probability of one in 100 (1:100 Probable Maximum Loss) at $4.03 billion for the 2021 hurricane season.
To meet the 2021 season’s funding requirements, the Board directed TWIA staff to place a combination of catastrophe bonds and traditional reinsurance in an aggregate amount totaling $1.9 billion (in excess of $2.1 billion in statutory funding) to bring the season’s catastrophe funding to $4.03 billion.
The Board further voted to direct the Association’s reinsurance broker to provide the Board with pricing information on a purchase of an additional $1 billion in reinsurance to bring the Association’s total funding for the 2021 storm season to $5 billion. Statute requires that any additional reinsurance purchased to bring the Association’s funding above the 1:100 Probable Maximum Loss be paid for through assessments of the Association’s member companies.
The Board received a recap regarding the Texas Department of Insurance’s rejection of the Association’s December 2020 rate filing. The Board then voted to direct staff to schedule a public workshop meeting of the Board, members of the Actuarial & Underwriting Committee, and the Association’s reinsurance broker to further study rate issues. No action on a rate filing will be taken at the workshop meeting but the Board may direct staff to gather additional information for Board consideration and action at a later time. It is expected that the workshop meeting will be scheduled in the coming weeks consistent with providing public notice as required by statute.
Election of Officers
The Board elected the following officers, unchanged from last year:
- Chair: Chandra Franklin-Womack, First Tier Coastal Representative
- Vice Chair: Georgia R. Neblett, First Tier Coastal Representative
- Secretary-Treasurer: Corise Morrison, Insurance Industry Representative
An archived recording of the Board meeting is available on TWIA’s website at www.twia.org/about-us/board-of-directors/archived-meetings.
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