Texas House Bill HB1772

Texas 2019 - 86th Regular

Caption

Relating to rate filings by the Texas Windstorm Insurance Association.

Impact

The bill directly impacts the regulatory framework governing how rates are set for windstorm insurance in Texas. By modifying the requirements for rate filings and approvals, the bill intends to provide TWIA with more autonomy and flexibility. This could lead to a quicker response to changing market conditions and the financial stability of the association, which has historically faced challenges, especially during periods of significant weather-related claims.

Summary

House Bill 1772 relates to the rate filings by the Texas Windstorm Insurance Association (TWIA) and leads to significant changes in the approval process for insurance rates. One of the key amendments includes allowing TWIA to use a rate filed without prior approval from the Commissioner of Insurance under specific conditions. These conditions include that the filed rate must not exceed 102.5% of the existing rate and must not result in an individual rating class change greater than 2.5%. This change aims to streamline the rate filing process, potentially reducing delays in the implementation of new rates.

Contention

Notably, the bill stipulates that approval for rates exceeding 102.5% must be granted by a two-thirds vote of the board of directors. This provision may be a point of contention among stakeholders, as it involves governance and oversight of rate increases. Some may argue that this flexibility is necessary for TWIA to operate effectively, while others could express concerns about consumer protection and the need for stringent regulatory oversight, especially in an industry that significantly affects homeowners and local economies.