Texas legislators are launching a bi-partisan push to fix the state's insurance pool for high-risk coastal homeowners, the Texas Windstorm Insurance Association (TWIA). Democratic State Senator Juan "Chuy" Hinojosa and Republican State Representative Todd Hunter introduced identical bills in March that would finance a TWIA emergency reserve fund through surcharges on insurance policies statewide, coupled with a 1% assessment on private insurance companies in the state, reports the Corpus Christi Caller Times ("Hinojosa, Hunter file Texas Windstorm reform legislation," by Rick Spruill).
But the measures face opposition in the legislature, in part because of the funding mechanism. Homeowners who don't live near the shore, and insurance companies who won't write insurance there, don't like serving as the deep pocket that will support coastal risks taken by others. "Opponents, including the Property Casualty Insurers Association of America, said the assessments and surcharges amount to a tax on policyholders and industry," writes the Caller-Times ("State Rep. Todd Hunter lays out funding plan to aid Texas Windstorm Insurance Association," by Rick Spruill).
In recent years, the TWIA's reserve fund has been drawn down to just $180 million — a margin that could be wiped out by a single major hurricane. Supporters say the TWIA needs a billion dollars in its reserve fund as a hedge against another Hurricane Ike — and the Association's reserve is still under pressure from continuing claims dating back to Ike. Also, supporters say, having a billion in the bank would give the TWIA a sound financial basis that would enable the association to sell bonds on the private market that would provide access to another $7 billion — enough to survive the financial stress of the next serious storm.
