TWIA Concerns Are Focus of Senate Committee Hearing
Debate on the Texas Windstorm Insurance Association dominated Tuesday's Texas Senate Committee on Business and Commerce hearing as lawmakers raised concerns over rate increases proposed by the Texas Department of Insurance.
TWIA financing “is a serious issue,” said committee chairman John Carona, R-Dallas, and one that “not enough people in the capital are taking seriously.”
As the state-run insurer for coastal residents without other property insurance options, TWIA has been struggling to get its finances in order since Hurricane Ike hit Texas in 2008. The association paid billions in claims to homeowners for hurricane damage and then millions more ...
Comments (2)
Rudy Gonzales
T.W.I.A. was formed in after Hurricane Celia. Premiums were and have been collected for all this time. There have been some claims and payments made. As a pseudo-state vehicle of last resort since 1971, they were committed to efficient, friendly and effective customer service at inception.
Hearing that TWIA has been struggling since 2008's "Ike" asks the question, What has happened with all the premiums collected during this time frame and who administered it? What percentage of capitalization has been used and who administered the program? What were the uses of any funding extracted and who authorized fund utility? What was the administrative cost initially ans what are they now? Who and how were administrative cost approved?
The billions paid to homeowners were valid expenses and funds should have been available based on insurance probability forecasts and probability scenarios. When the "risk management" phrase is thrown into this discussion, it brings to mind the banking debacle of "Derivative's" and Big Bank gambling done on the international scale which brought down the economy, started the recession and createde the "Housing Bubble."
As the power over TWIA the Texas Department of Insurance failed grossly their fiduciary function for Texas homeowners. When and if an insurance company drops back into Texas' windstorm and hail coverage, be it with re-insurance, the insurance companies are hedging their bets with Texas insureds money. If an insurance company sneaks back into Texas' windstorm and hail coverage by a limiting function, they still make money from Texas' insureds. This is an unacceptable allowed practice by any standards. Limited exposure while making money and allowing Texas homeowners to foot the bill in front with premiums and on the back side with increases is raping Texans.
Risk management with money that should have been capitalized for the population, is in turn manipulated for profit for the insurance companies who chose to notify the state they didn't want to write windstorm insurance in Texas. Highly organized, endowed with extremely competent risk management portfolio accountants, lawyers and statisticians, they worked the not so highly, but rather incompetent administrators in Austin. Give me a break!
Austin is full of incompetents from Perry down! Slapping TWIA together back in 1971 carelessly with grandiose ideas of providing Texans with quality coverage. Adding to this deception is the hiring and covering up deceptive, rogue insurance adjusters working to limit liability exposure for TWIA, smacks of top down corruption. I suggest a full audit back to 1971 and full disclosure to Texans of all the inaccuracies uncovered and sending anyone found culpable to prison if they gained financially in any way.
Tony Trevino
Is it possible that TWIA is not broken? The property owners along the coast ( 259,000 per Professor Chandler of UH Law) are being subsidized by the whole state of property owners, even those in the TX panhandle. They want something for nothing. They need to adjust the coverage to the amount of premium that is being paid. If they do not want to adjust coverage, then they need charge a lot more premiums, and 5% is not going to do it. This is what we who have auto or homeowners insurance expect. If our autos were totalled, only a certain amount would be paid- same for our homes.
I would submit that those coastal residence chose to live on the coast and hurricanes do come around once in a while, so they need to cover their risk. Don't ask all of Texas residents to subsidize their lifestyle.