Relating to the issuance of certain public securities by the Texas Windstorm Insurance Association.
Impact
If passed, HB3155 would lead to the collection of a new premium surcharge from policyholders within designated catastrophe areas to support the repayment of the issued public securities. This surcharge would be separate from regular premiums and would not be subjected to taxes or commissions, thereby directly impacting the financial obligations of homeowners and businesses with property insurance in areas prone to windstorms and other catastrophic events. Furthermore, the bill stipulates that the association and insurers must regularly assess this surcharge, providing a mechanism for periodic adjustment based on financial needs.
Summary
House Bill 3155 seeks to amend the Texas Insurance Code by introducing changes related to the issuance of Class 1 public securities by the Texas Windstorm Insurance Association (TWIA). This bill allows for the issuance of securities not exceeding $1 billion annually, both prior to and following catastrophic events. The intention is to ensure that sufficient funds are available to cover insured losses that may not be met through existing revenues or catastrophe reserve funds. This legislative action aims to enhance the financial stability of TWIA in the event of significant weather-related disasters that affect covered properties in the state.
Sentiment
The sentiment around HB3155 appears to be mixed among stakeholders. Supporters argue that the bill is essential for ensuring the financial soundness of TWIA and protecting insurance policyholders in areas susceptible to severe weather events. They believe that this proactive approach would mitigate the risks of inadequate funds post-disaster. Conversely, there are concerns among some legislators and consumer advocacy groups about the potential burden of additional costs placed upon policyholders, particularly in areas already facing economic challenges. The debate centers on balancing financial preparedness with the affordability of insurance premiums for Texans.
Contention
Notable points of contention include the implications of an additional surcharge on policyholders' financial responsibilities. Critics cite that imposing this surcharge may disproportionately affect vulnerable communities already struggling with high living costs and economic instability. Additionally, some lawmakers express concern about the broader implications of expanding the insurance association's powers under the proposed changes, fearing it could lead to a lack of oversight and accountability in how funds are managed and allocated in the event of disasters.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment, a surcharge, and an infrastructure grant.
Relating to the process of selecting representatives of the insurance industry to serve on the board of directors of the Texas Windstorm Insurance Association.