Governor of Texas Fast Tracks-wind, disaster Action Fund

 

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4 February 2009 Wednesday 03:00 PM EST

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Governor of Texas Fast Tracks-wind, disaster Action Fund

Sean P Carr

AUSTIN, Texas



In a move hailed by the state insurers, Texas Governor Rick Perry told the Law Reform Texas Wind Insurance Association and to fund the Trust Fund Reserve disaster as "emergency" for the session Legislature in 2009.

The designation allows lawmakers to consider these issues in the first 30 days of the legislative session, which began January 13. The governor also cited the legislation to help public and private entities on the recovery from 2008 hurricanes.

Beaman Floyd, executive director of the Texas Coalition for Affordable Insurance Solutions, said Perry designation is a recognition that TWIA and the trust funds are in critical condition. Texas led the nation with more than $ 10 billion in catastrophic losses in 2008.

"Both TWIA and CRTF were exhausted, not only by hurricanes in 2008, but by other disasters such as storms, damaging winds and large hail that hit our country," he said in a statement.

A bill to reform and refinance TWIA has not received legislative action during the last session of the legislature, but the declaration of emergency and developments in the field have improved the prospects time, said Jerry Johns, president of the Information Service on the south-west of insurance. TWIA has contributed more than $ 900 million in claims and Hurricane Ike is still paying a small percentage of the over 90,000 applications to date, "he says.

By November, Texas Insurance Commissioner Mike Geeslin approved an increase of 12.3% for residential properties under TWIA - exceeding a ceiling of mandate - and a 15.6% increase for commercial property for the reconstruction of financial strength (BestWire, Nov. 18, 2008).

TWIA had used all the money she had on hand after Hurricane Dolly in July and plunged into the catastrophe reserve trust fund. The association has assessed its member insurers $ 100 million before the largest Ike made land in the state in September. In its wake, TWIA insurers assess another $ 430 million to be able to tap into the reinsurance payment requests (BestWire, Sept. 15, 2008). Insurers can recover the assessments by deducting up to 20% tax on premiums. Tax credits to the depletion of general revenue funds in Texas.

"The challenges of the wind pool are more coastal in nature. It is a state issue," said Johns.

"While TCAIS agree with the policy makers that the recapitalization of the catastrophe reserve trust fund is an immediate need, we urge legislators to go further yet fully TWIA reform. The state also needs a strong short-term financing system for TWIA initiatives with long-term backup TWIA under the administrative and financial health, "said Floyd.

"We need to purchase reinsurance at a reasonable rate," said Johns.

In 2007, the top of homeowners multiperil writers in Texas, according to AM Best Co. state / line product information based on direct premiums written were State Farm Group, with a market share of 29 , 4% Allstate Insurance Group, with 14.7%; Farmers Insurance Group, with 13%; USAA Group, with 7.6% and Travelers Group, with 5.4%.

(By Sean P. Carr, senior editor, BestWeek: Sean.Carr @ ambest.com)

5 February 2009

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