Posted on 01 Jul 2011
Texas Governor Rick Perry signed into law reforms to the Texas Windstorm Insurance Association (TWIA) that will ultimately reduce the burden of catastrophic storms on the state and eventually establish TWIA as an insurer of last resort.
House Bill 4409 eases previous funding restrictions on TWIA by allowing coverage of up to $2.5 billion in losses through various funding methods. Damage payments can now be funded by premiums, reserves, public securities, commercial paper and other market source financial instruments.
The bill also requires the Texas Department of Insurance to maintain a list of insurers who voluntarily write windstorm coverage, and develop incentives for insurers to voluntarily write coverage along the coast.
This provision will assist consumers in searching for other providers with the goal of shifting the coverage burden away from TWIA, ultimately establishing it as an insurer of last resort as originally intended.