I attended the Texas Windstorm Association meeting held recently in Galveston.
Three Texas House members representing Galveston, Corpus Christi and Houston were present, and all testified against the proposed 5 percent rate increase.
Many others were present to testify against, including many local insurance agents who sided with their customers instead of the insurance companies who employ them.
One person representing the insurance industry spoke for the 5 percent rate increase. He also said his industry had input in HB 1900 and supported some of its language.
The Texas Windstorm Insurance Association is a state agency created by the Texas legislature to provide windstorm insurance protection for homeowners and businesses on the Texas Gulf Coast. It was made necessary several years ago when the insurance industries ceased to provide this type of coverage to Gulf Coast residents.
The original legislation was sponsored and passed by a Galveston member serving in a Democratic legislature. It was a win for homeowners and business. The insurance industry hated it and has consistently supported premium rate increases.
Make no mistake about it, the Texas insurance industry is one of the most politically powerful entities in the state. It employs an army of lobbyists for every legislative session and donates millions of dollars to legislative and other statewide campaigns.
Last year, the association’s board of directors approved a 10 percent increase in windstorm insurance rates. This followed board supported rate increases in seven of the last eight years. Responding from widespread objections from Gulf Coast residents recovering from Hurricane Harvey, the governor stopped the 10 percent proposed increase.
While in the legislature, I served on the House Insurance Committee. The purpose was to combat insurance industry meddling with the windstorm association.
The recent session of the Legislature passed HB 1900. Some called it pro consumer. I have concerns.
Here are those concerns:
1. One of the authors and sponsors of HB 1900 has received in excess of $500,000 in insurance political contributions.
2. The bill gives added rule-making authority to the Texas Windstorm Association commissioner. Not good for rate payers trying to recover from hurricane damages.
3. The new law creates a legislative board to study the funding structure of the Texas Windstorm Insurance Association.
This proposed funding study raises serious alarms. First, the Legislature is where the insurance industry exercises superior influence because of its lobbying and financial contributions. Also, the Gulf Coast windstorm rate payers only influence and elect a small percentage of the total membership of the Texas House and Senate.
If Gulf Coast homeowners and business expect to maintain their current standard of living, they must be able to purchase affordable windstorm insurance.
Policyholders can best protect their interests through political action. They need to focus on the quality of state legislators and state officials they elect and to have a say in who’s appointed to the association’s board of directors.