Legislators in charge of recommending the fate of state agencies voted Wednesday on a series of recommendations about the Texas Windstorm Insurance Association.
But while the Texas Sunset Commission voted on recommendations that the commission’s staff said would make the insurer operate better, it avoided making a recommendation on changes the windstorm association, an insurer of last resort for thousands of coastal policyholders, should make to be sustainable.
That decision should be left to the entirety of the legislature, said state Sen. Brian Birdwell, the commission’s chairman.
“My view, particularly in my capacity as chairman, is that such a significant policy change should be a conversation for the entire legislature, especially a policy change which has considerable financial implications,” Birdwell said, as he told other members of the Sunset Advisory Commission why he wouldn’t bring just one part of the group of recommendations up for a vote.
In November, the Sunset Commission’s staff released a report that painted a dire picture of the future of the windstorm association, which sells windstorm insurance in 14 coastal counties, including Galveston.
After Hurricane Harvey, the association was “broke, in debt and facing a shrinking revenue pool,” according to the report.
The association’s problems come in part because it has mandates to be an insurer for people who cannot purchase coverage elsewhere, and to survive primarily on premiums and debt for funding, according to the report.
The sunset commission’s staff recommended that lawmakers choose one of those mandates and make reforms around that decision.
That didn’t happen on Wednesday.
“I believe this is not the proper venue for such a decision,” Birdwell said.
Depending on how the legislature acts, the windstorm association could be allowed to charge higher premiums from customers or to start investing more revenue from its catastrophe reserve funds.
In an official response published after the sunset commission’s report was released, the windstorm association said it was “generally supportive” of the commission staff’s recommendations, but took issue with the assertion that the insurer was broke.
“The current funding structure is sufficient to respond to a major hurricane in a single year,” the association wrote. “TWIA remains solvent, with cash flow and liquidity sufficient to meet its financial obligations.”
In 2017, the windstorm association had 231,633 residential policies and 11,008 commercial policies.
The commission voted to approve recommendations to makes changes to policy renewal requirements, claims handling, the association’s depopulation program and other aspects of the associations programs on Wednesday.
The recommendations will be sent to lawmakers, who can seek to make changes to the association with new legislation.
As of Thursday, there had been no bills filed related to the windstorm association.