TWIA to Raise Rates, Remain Under Administrative Control

Texas’ insurer of last resort for wind and hail in coastal counties will remain under the administrative control of state regulators and in August will file a 5 percent rate increase to become effective Jan. 1, 2013.

On May 15, the Texas Windstorm Insurance Association’s board of directors declined, however, to vote on a proposal from the association’s actuarial underwriting committee that TWIA file in June for an overall rate increase of 4.7 percent with an effective date of Oct. 1. That proposed hike would have varied within TWIA’s coastal territories — increasing or decreasing according to the risk — while keeping within an 8 percent limit of variation within any one county.

By statute, TWIA is required to make a rate filing in August, even if no change is requested. The August filing of a 5 percent overall rate increase with an effective date of Jan. 1 is a practice TWIA has followed for the past two years and intends to continue until its rates are considered adequate.

The possibility of a filing for an additional rate hike, also to be effective Jan. 1, remains.

Currently the board is without a public member from a coastal county, and several officials from Gulf Coast counties, including Rep. Craig Eiland from Galveston, testified against the 4.7 percent rate filing with territorial variances.

“There is no coastal member at large here. … I think it would not be well received to not have somebody here yelling and screaming on our behalf before you took this kind of dramatic action,” Eiland said.

TWIA was overwhelmed with claims from Hurricanes Ike and Dolly in 2008, and the insurer was inundated with lawsuits over its claims handling. The Texas Department of Insurance placed TWIA under administrative oversight in early 2011.

Speaking at the May 15 board meeting, Insurance Commissioner Eleanor Kitzman said TDI’s oversight of the insurer “will continue for some time in the future.”