5% Rate Hike Recommended for Texas Windstorm Insurer

When the board of directors of Texas’ property insurer of last resort for wind and hail along the Texas coast meets in December, its members will be considering a recommendation by the organization’s actuarial and underwriting committee for a 5% rate increase.

The committee voted on Nov. 19 to recommend that the Texas Windstorm Insurance Association’s (TWIA’s) board submit to the Texas Department of Insurance a proposal for a 5% rate increase that applies to both commercial and residential risks.

The committee also voted to recommend to the TWIA board that they direct TWIA staff to provide additional written information to the TWIA board, the committee, and TDI on issues discussed at the meeting related to TWIA’s rate adequacy analysis within three months following the TWIA board’s meeting in December.

The recommendations will be presented by Committee Chair Debbie King to the TWIA Board at its regularly scheduled quarterly meeting on December 10 in Corpus Christi.

At the Nov. 19 meeting and during a previous Oct. 17 meeting on rate issues, the committee considered both in-person and written comments by coastal residents, lawmakers and business interests, who overwhelmingly requested that no rate action be taken at this time.

In July, TWIA published its 2019 Rate Adequacy Analysis that indicated its rates were inadequate by as much as 42%.

Consulting actuary Steve Alexander, a member of the actuarial and underwriting committee, in the Oct. 17 meeting had challenged some of the assumptions upon which TWIA based its rate analysis. The committee on Nov. 19 considered the issues raised by Alexander, as well as written comments submitted by TWIA staff in response to Alexander’s concerns.