On June 10, Gov. Greg Abbott signed into law what could be the most significant piece of Texas Windstorm Insurance Association legislation, maybe ever.

House Bill 1900 requires insurance companies to pay for any reinsurance the association purchases above a 1-in-100-year storm. Ratepayers are paying that cost. How significant is that?

For the 2019 storm season, the association has purchased roughly $550 million in reinsurance above that threshold. Not only will those costs not be born by coastal Texans in the future, but this provision will also increase the funds the association will have on hand to pay claims, and do so without having to frequently raise rates on policyholders.

The bill also requires the association to publicly post any proposed rate increase for 14 days before a board vote, and requires the board to accept public comment on proposed increases.

The bill received the necessary votes to go into effect immediately. As a result, these changes will be in place before the association’s August board meeting in Galveston. For the first time, we will have an opportunity to review and comment on any proposed rate increase.

The bill also requires the legislature to create two interim reports. The first is to review the association’s funding and funding structure, and the second is to evaluate merging the windstorm association and the Texas FAIR Plan Association, which the legislature created in 1995 to deliver property insurance to Texas residents in areas designated by the Commissioner of Insurance as underserved.

These studies could create even more positive changes to how the windstorm association is regulated.

There are many elected officials who worked for this outcome. Most importantly, we all need to thank Gov. Abbott for his leadership. Without his decision to delay the association’s 10 percent rate increase last fall — ultimately leading to the withdrawal of that increase — the legislature wouldn’t have had the opportunity to pass this legislation.

Even after the legislature passed HB 1900, insurance companies pushed Abbott to veto the bill. Not only did he not do so, but he signed it with a week left in the veto period; showing coastal Texans that Abbott has our back.

Other leaders helped this bill become law as well. Before the legislative session, Lt. Gov. Dan Patrick said that he’s “all in” on Galveston issues. That proved to be the case. Dennis Bonnen, the newly elected Speaker of the House from Pearland, also helped ensure passage of windstorm legislation out of the Texas House.

Sen. Larry Taylor and Rep. Greg Bonnen carried the bills, and House Insurance Chairman Eddie Lucio III, Reps. Todd Hunter, Abel Herrero, Mayes Middleton, Geanie Morrison and J.M. Lozano all pushed significant windstorm legislation through the legislature, as did the members of the House and Senate who voted for HB 1900 and other bills.

Thanks to the work of these elected officials, as well as the supporters of the Coastal Windstorm Insurance Coalition, we were able to achieve what many thought couldn’t be done. Thank you for all of your support, and please come to the windstorm association board meeting Aug. 6 in Galveston to let your voices be heard.

Henry Freudenburg is chairman of the Coastal Windstorm Insurance Coalition.


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