Recently, the Texas Windstorm Insurance Association (TWIA) board voted for a 5% rate hike on Coastal residents and businesses. This action was wrong and demonstrates why TWIA transparency and disclosure must be improved.
Transparency Question 1
How many Coastal residents and businesses were contacted by TWIA to get their input? I bet hardly anyone. Each year, TWIA threatens and tries to increase rates on Coastal residents and businesses, creating a constant battle that people living and working on the Coast must fight. Prior to each annual TWIA board meeting, public comment is solicited, but the results are rarely published. Maybe it’s because the answer is overwhelmingly no. Where is the transparency?
Transparency Question 2
Why is the TWIA board’s annual vote for higher rates an issue of insurance versus non-insurance? Maybe because insurance almost always wins. Higher rates mean higher costs to Coastal residents and businesses, but when the rate increases, someone else benefits - not the Coast. Those pesky insurance experts and corporations always say TWIA rates are actuarially unsound and need to be increased. However, private insurance is unavailable or unaffordable to the Coast and so Coastal residents and businesses are driven to TWIA by a lack of alternatives. The result becomes increased rates because TWIA is the insurer of last resort. Is this the insurance industry guarding the TWIA hen house? Where is the transparency?
Transparency Question 3
If TWIA is in favor of helping the Coast, which involves 14 counties, then why is TWIA located in Austin and not in one of the 14 Coastal counties? I haven’t seen a weather hurricane hit Austin yet. It seems reasonable that if you service the Coast, you should be located ON the Coast. Where’s the transparency?
Transparency Question 4
Does the TWIA board really represent and reflect Coastal policyholder interests? How many TWIA board members are connected to the insurance industry? On rate increases, the TWIA board almost always sides with insurance interests. If certain insurance corporations and groups are contacting, lobbying, communicating with interest groups, lawmakers and others on issues that may be adverse to Coastal policyholders, then shouldn’t this information be provided to TWIA board members so it can be disclosed before a vote on rate hikes? This seems reasonable. Where’s the transparency?
Transparency Question 5
The Texas Legislature recently passed a new law that requires a 2/3 vote of the TWIA board before any rate increase can be validated. The law goes into effect Sept. 1, 2021. However, the TWIA board meeting took place on Aug. 3, 2021 and the board voted to raise rates on a 5-3 vote. (TWIA has a nine-member board.) This vote was not 2/3. It is interesting that public comment, 22 legislators, county/city representatives, bankers, realtors and others asked that the TWIA board wait until after the new law went into effect before taking a vote on any rate increase. The TWIA board ignored these requests and went ahead and voted to raise rates just weeks before the new law went into effect. Where’s the transparency?
Overall, I’m proud of the Texas Coast and our great State of Texas. If taxes, fees, insurance, expenses and rates are going to be increased, then let’s have full transparency and full disclosure, so everyone knows. Listening to the public, ratepayers, and policyholders should be impactful and constructive. “To be” or “not to be” seems to still be the TWIA question.
State Representative Todd Hunter of Corpus Christi represents District 32 in the Texas House of Representatives.