Texas House Bill HB3023

Texas 2011 - 82nd Regular

• Introduced: 3/10/11
• Refer: 3/17/11

Caption

Relating to the institution of a formal delinquency proceeding against the Texas Windstorm Insurance Association.

Impact

The enactment of HB 3023 is poised to have a considerable impact on insurance regulations in Texas, particularly in first-tier coastal counties. By formalizing the liquidation process, the bill addresses underlying issues of financial instability within the TWIA and seeks to create a framework for a new residual market for windstorm and hail insurance. This could facilitate better market conditions and help restore confidence among policyholders who may have struggled to find affordable and reliable coverage in the aftermath of severe weather events.

Summary

House Bill 3023 proposes a formal delinquency proceeding against the Texas Windstorm Insurance Association (TWIA). The bill's primary objective is to enable the Texas Commissioner of Insurance to petition a court for the liquidation of the TWIA's operations. This marks a significant step in addressing the financial and operational stability of the association, which has faced challenges in recent years regarding its ability to adequately cover windstorm and hail insurance in coastal regions. The bill calls for the establishment of a plan of liquidation that ensures policy obligations are transferred to a solvent insurer authorized to provide similar coverage in Texas.

Sentiment

The sentiment surrounding HB 3023 appears to be mixed. Proponents of the bill emphasize the need for a systematic approach to ensuring the stability of windstorm insurance in vulnerable coastal regions. They argue that the TWIA’s current model is unsustainable and requires intervention to protect consumers and bolster the state's insurance market. Conversely, critics may express reservations about how the liquidation process will affect existing policyholders and what immediate policies will replace the TWIA's historical role in providing coverage in high-risk areas.

Contention

Notable points of contention associated with HB 3023 include concerns regarding the timing and execution of the liquidation process. Stakeholders, including residents in coastal counties and local businesses, may be apprehensive about how this transition will be managed and what mechanisms will be put in place to ensure continuity of coverage. There are also questions surrounding the effectiveness of the advisory committee proposed in the bill, including the qualifications and expertise of appointed members and their ability to develop a viable liquidation plan that meets the diverse needs of affected communities.