Texas House Bill HB100

Texas 2021 - 87th 3rd C.S.

Caption

Relating to the setting of premium rates for Texas Windstorm Insurance Association policies by the commissioner of insurance.

Impact

The bill amends several sections of the Insurance Code to clarify the relationship between the TWIA and the Insurance Department. Notably, it mandates that current rates remain in effect until a public hearing is held to alter them, thereby providing stability for policyholders while the new structure is implemented. Additionally, it establishes requirements for the TWIA to submit annual data on loss experience and operational expenses, allowing for more informed decision-making on premium settings. This annual reporting requirement reinforces accountability and transparency in the rate-setting process.

Summary

House Bill 100 seeks to establish a clearer framework for setting premium rates for insurance policies under the Texas Windstorm Insurance Association (TWIA). The proposed legislation grants the Texas Insurance Commissioner the authority to set and adopt premium rates for TWIA policies, which has significant implications for property insurance in areas susceptible to windstorm damage. The bill outlines the factors that the commissioner must consider when determining these rates, ensuring they are reasonable for the public while also being nonconfiscatory towards the association and its member insurers.

Contention

A notable point of contention surrounding HB 100 is the provision requiring the commissioner to hold a public hearing before changing any previously set premium rates. This provision is designed to ensure stakeholder engagement and transparency, but it may also lengthen the process of rate adjustments. Critics of such regulatory measures argue that it could hinder the ability of the TWIA to respond quickly to changing market conditions, potentially leaving policyholders vulnerable in times of crisis. Furthermore, the bill's impact on the financial sustainability of TWIA has sparked debate, with concerns that overly cautious rate settings may not adequately cover future claims.