AUSTIN, TEXAS, FEBRUARY 21 - The Heartland Institute’s Center on Finance, Insurance, and Real Estate welcomes the announcement by Texas Insurance Commissioner Eleanor Kitzman that she will name an advisory committee and hire consultants to propose fundamental restructuring of the Texas Windstorm Insurance Association, which the commissioner called “unsustainable.”
According to the Texas Department of Insurance’s request for proposals, among the options that could be pursued are a reinsurance program for members and a program under which insurers would be paid fees to service and adjust claims for TWIA policies. The department said consultants and an advisory committee would be in place by April, with a final report due by June.
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“Commissioner Kitzman should be commended for taking note of TWIA’s funding and operational problems. This is just the first step in a very long process, but we welcome the dialogue and the effort to better protect Texas policyholders and taxpayers.”
“We would encourage Commissioner Kitzman to broaden the scope of her inquiry. While TWIA’s claims-handling challenges certainly are an issue, they pale in comparison to the authority’s solvency concerns. TWIA must ensure that it can meet its financial obligations and all potential solutions should be on the table. These should include rate increases, incentives for private insurers to take out TWIA policies, and greater reinsurance and catastrophe bond protection to spread Texas windstorm risks around the globe.”
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