Insurance Commissioner addresses concerns regarding state-run insurance group
Texas Insurance Commissioner Eleanor Kitzman has addressed concerns regarding the state of the Texas Windstorm Insurance Association (TWIA). The state-run insurance organization is often considered the last and best place for homeowners to obtain affordable coverage to protect their properties from wind damage. Like with other state-backed insurance groups, TWIA has been faced with problematic financial issues that have threatened its existence and continued viability. These financial problems have caught the attention of the state’s House Insurance Committee, which has issued a letter to the Insurance Commissioner looking for clarifications on TWIA’s issues.
Problems with TWIA are not new
According to Commissioner Kitzman, the financial problems facing the windstorm insurance group are nothing new. The association provides coverage to properties located in areas where damage is expected to occur on a regular basis, such as coastal regions. Some of the state’s insurance companies have exited this sector of the market due to the high risk of damage caused by wind storms. This has left many consumers with only one option for coverage. TWIA offers windstorm insurance coverage at a lower rate those of other insurance companies, which has translated into lower profits.
Ability for TWIA to serve consumers called into question
House Insurance Committee chairman Representative John Smithee issued a letter to the state’s Department of Insurance detailing concerns the state’s Legislature has regarding TWIA. The letter suggests that lawmakers are worried that the insurance organization will not be able to continue paying claims coming from the victims of windstorms. Smithee notes that the organizations rates and level of reinsurance coverage are both insufficient, which has caused many legislators to question the future of the program.
Technical advisory group to recommend ways to reorganize insurance group
According to Commissioner Kitzman, the problems facing the Texas Windstorm Insurance Association are a top priority. The Department of Insurance is working to rectify the financial problems crippling the state-run insurance organization and has established a technical advisory group comprised of experts in the insurance industry. This group is expected to begin producing recommendations on how to fix the beleaguered windstorm insurance program within the coming months.