The Texas Department of Insurance (TDI) has agreed to move forward with several proposals to fund the Texas Windstorm Insurance Association (TWIA), the provider of last resort for windstorm insurance on the Texas Coast.
TWIA has just recently adopted a 5% increase on all residential and commercial windstorm insurance policies issued by TWIA to policyholders in the 14 counties comprising the Texas Coast. This is the third rate increase in the last three years for coastal county residents.
The Commissioner of the Texas Department of Insurance has also proposed rules that will establish the funding and financing mechanism to place funds in the catastrophic reserve trust fund to provide coverage for windstorm events along the Texas Coast. This plan provides methodology for the Commissioner to have the Texas Public Finance Authority sell several classes of bonds to fund TWIA losses and expenses in excess of premium and other revenues. The Class 1 Bonds in the amount of $1billion are to be paid for solely by TWIA policyholders in the 14 counties along the Texas Coast. The Class 2 Bonds in the amount of $1 billion are to be paid for 70% by all insurance policyholders, excepting workman’s compensation and health lines, in 14 counties along the Texas Coast and 30% by insurance companies offering policies in the 14 counties along the Texas Coast. TWIA is also proposing a surcharge on all other property and casualty policies held by the owners of TWIA policies in 14 counties along the Texas Coast. The proposed surcharge on the auto insurance policies of residents in the 14 coastal counties could result in uninsured drivers on our streets. The consequences of all of these rate increases could result in an economic catastrophe for the hard working families that live in the Coastal Bend and on the entire Texas coast. The financial hardship will be far-reaching on consumers, lenders, builders, and small businesses and would bring severe economic penalties to the Texas Gulf Coast area.
I encourage all residents, and business owners to please write a letter to Commissioner Eleanor Kitzman, Texas Department of Insurance and stress your opposition to these rate increases. In your letter, please emphasize that the Texas Department of Insurance needs to develop an equitable and reasonable statewide funding formula that does not target and discriminate against the 14 coastal counties.
BREAKING NEWS: Today, the Texas Department of Insurance announced that both hearings would be postponed, thus ending public comment for now.
Join local organizations, businesses, leaders and citizens at a “Rally Against Rates,” Friday, July 13, 2012, 9:45AM on the steps of City Hall. We encourage our friends to bring friends, family, coworkers, and others to let your voice be heard!
I urge you to keep submit your letters prior to the public hearings that the Texas Department of Insurance will be holding in the future. These public hearings are open to the public and everyone is welcomed to attend. When we here the next date of the meeting it will be held at City Council Chambers, City Hall, 1201 Leopard St.
Commissioner Eleanor Kitzman
Texas Department of Insurance
P.O. Box 149104
Austin, Texas 78714-9104