FOR IMMEDIATE RELEASE
March 8, 2006
AUSTIN, TX -- Today Sen. Eddie Lucio, Jr. was appointed to serve on the Joint Interim Committee on Windstorm Coverage and Budgetary Impact that will study the Texas Windstorm Insurance Association (TWIA).
"I am thrilled with the opportunity to participate in determining the effectiveness of windstorm insurance coverage, especially since I represent the southern coastal area of Texas and South Padre Island," said Sen. Lucio. "We have seen the devastation of hurricanes this past year, and we must be prepared in case future hurricanes hit the Texas coast. We will make sure that TWIA will be ready to assist homeowners rebuild or repair their houses so they can get on with their lives after a hurricane or tropical storm."
The Committee will also make recommendations regarding the structure for funding catastrophic weather-related losses along the Texas coast under TWIA's authority. Specifically, the Committee will:
1. Study the extent to which public securities may be issued as a supplemental or alternative method to raise funds to cover such losses; whether public securities should be issued on a pre-catastrophic basis, post-catastrophic basis, or both; whether caps should be placed on such public securities, and the amount of such caps; the level of loss necessary before public securities are utilized; whether public securities and all debt services on public securities may be paid by premium surcharges; examine the amount of premium surcharges, the policyholder base that may be surcharged; and the types of policies to which a premium surcharge may apply.
2. Study the use of modeling and other rating methodologies in determining windstorm rate adequacy in Tier I and Tier II coastal counties.
3. Study whether insurers assessed for funds to cover losses may recover such assessment by way of a premium surcharge; consider the amount of premium surcharge; the policyholder base that may be surcharged, and the types of policies to which a premium surcharge may apply; examine alternative methods of recoupment such as premium tax credits.
4. Study the extent to which reinsurance may be used to cover losses; consider the creation of a Texas Windstorm Reinsurance Facility and Trust Fund.
5. Study the extent to which the Catastrophic Trust Fund (CRTF) may be used to cover losses; examine ways to increase funds in the CRTF.
6. Study combining the Texas Windstorm Insurance Association with the Fair Access to Insurance Association (FAIR) and the need to clarify TWIA's federal taxation exempt status.
7. Study catastrophic history, population growth, and storm exposure along the Texas coast; examine other coastal state's methods for windstorm loss funding; and examine ways of increasing or encouraging loss mitigation by individuals, insurers, and government entities.
The Committee is composed of the following members of the House and Senate:
Rep. John Smithee (Co-Chair)
Rep. Warren Chisum
Rep. Joe Driver
Rep. Allan Rifler
Rep. Gene Seaman
Rep. Larry Taylor
Sen. Mike Jackson (Co-Chair)
Sen. Robert Duncan
Sen. Troy Fraser
Sen. Kyle Janek
Sen. Eddie Lucio, Jr.
Sen. Royce West
As always, if you have any input or questions regarding these or other matters, please do not hesitate to contact Doris Sanchez, my press secretary, 512-463-0385.