TWIA plans workshop on possible windstorm insurance rate hike
No rate insurance increase came out of the quarterly meeting of the Texas Windstorm Insurance Association on Tuesday, March 23. Instead, the board voted to schedule a public workshop and board meeting to further study the issue, possibly pushing any action on a rate increase until after the Texas Legislature adjourns its 2021 session.
At its last quarterly meeting in December 2020, the TWIA board approved a 5 percent rate increase that was rejected by the state Department of Insurance due to lack of transparency. The board’s meeting agenda did not clearly list an item for consideration of a rate increase.
In other action, the board elected officers and voted to secure reinsurance in addition to the funding provided by statute for coverage of the 2021 hurricane season. Coverage for the upcoming hurricane season, which begins June 1, will total $4.03 billion, with a possible addition of $1 billion.
No action will be taken by the board during the insurance rate workshop. Joining the board will be members of the Actuarial and Underwriting Committee and TWIA’s reinsurance broker. A date for the workshop is expected to be set in the coming weeks.
Board officers will remain the same over the next year. The TWIA board re-elected Chair Chandra Franklin-Womack, Vice Chair Georgia R. Neblett, and Secretary-Treasurer Corise Morrison.
Following a presentation on funding levels for the 2021 hurricane season by reinsurance broker Guy Carpenter & Company LLC, the board established a probable maximum loss of $4.03 billion. The board also directed the broker to provide pricing information on a possible purchase of an additional $1 billion in reinsurance to bring the total to $5 billion.
Reinsurance makes cash available to pay claims in the case of a devastating storm. It protects insurers from big losses.
The March 23 meeting was originally scheduled for Feb. 23 but was postponed due to severe winter weather the week before.
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