TWIA Board Votes on 2026 Operating Budget and Catastrophe Funding at Corpus Christi Meeting
Published on: November 5, 2025The Texas Windstorm Insurance Association (TWIA) Board of Directors met on November 4 in Corpus Christi.
TWIA staff reported to the Board that the Association has received more than 1,300 claims from hailstorms impacting the Corpus Christi area on November 1.
In addition to receiving routine operational updates, the Board took the following actions.
2026 Operating Budget
The Board approved the 2026 operating budget for the Association. Select highlights of the 2026 budget include:
- Net operating expenses are budgeted to increase from 5.2% of earned premium in 2025 to 5.5% in 2026. (These figures have been updated since the Board’s preliminary review of the budget in October; the original figures and other details of the budget are available in the recap of the October budget meeting.)
- Reinsurance costs are anticipated to be much lower than recent years due to a new state law that reduces TWIA’s minimum required catastrophe funding for each storm season (see below). Actual reinsurance costs will depend on several factors in addition to the reduced funding requirement, including growth in TWIA exposures and general market conditions. The operating budget includes a placeholder of $237 million for reinsurance costs.
2026 Catastrophe Funding
In accordance with a newly-enacted state law, the Board selected a method of determining the Association’s 1-in-50 probable maximum loss (PML) for the 2026 storm season. The 1-in-50 PML is a calculated estimate of the amount of loss TWIA would expect to exceed in two percent (1-in-50) or less of all possible storm seasons.
The Board selected the following method for determining the PML, which was recommended by TWIA’s Actuarial & Underwriting Committee:
- Use of the commercially available catastrophe models Verisk Touchstone version 13, RMS RiskLink version 25, Impact Forecasting version 18, and Cotality RQE version 25.
- The models weighted such that those producing the highest and lowest PMLs for 2026 receive weights of 20% each, and the two remaining models receive weights of 30% each.
- The models weighted such that those producing the highest and lowest PMLs for 2026 receive weights of 20% each, and the two remaining models receive weights of 30% each.
- Use of model results based on long-term hurricane frequency assumptions.
- Inclusion of a loss adjustment expense factor of 15 percent.
The Texas Insurance Commissioner may approve the Board’s selected method or may adopt a different method for the Board by February 1, 2026.
The Association secures funding to meet its minimum required catastrophe funding level by purchasing reinsurance to supplement other sources of catastrophe funding provided by statute. The Board may also direct Association staff to purchase additional reinsurance above the 1-in-50 PML. Any reinsurance for coverage above the minimum required funding level would be paid for through assessments of TWIA’s member insurance companies, not from TWIA funds. Member insurance companies cannot recoup the assessments from policyholders through a premium surcharge or tax credit.
Other Actions
The Board elected the following members to fill vacancies in officer positions:
- Chair: Karen Guard, Insurance Industry Representative
- Vice Chair: Tim Garrett, Non-Coastal Territory Representative
- Secretary-Treasurer: Greg Smith, First Tier Coastal Representative
The Board conducted its annual performance evaluation of the General Manager in closed session. Upon returning to open session, the Board voted to implement a salary increase of 3.85% for the General Manager.
Members of the media with questions about the Board meeting, please email MediaRelations@TWIA.org.
The agenda, meeting materials, and archived recording for the Board meeting are available on our Meeting Library page.
