AUSTIN, Texas (AP) — Texas Lt. Gov. David Dewhurst asked lawmakers this week to consider shutting down a windstorm insurance provider for coastal Texans.
Dewhurst asked a state Senate committee Tuesday to look at phasing out the Texas Windstorm Insurance Association. Dewhurst said if Texas ever was hit with severe hurricanes in a single year, the state could be on the hook for the billions of dollars in claims.
Texas lawmakers started the association in 1971. It provides windstorm and hail coverage for those who cannot get it from the voluntary market. The association holds more than 270,000 policies with up to $77 billion in insurance coverage.
Dewhurst said he wants the Senate Business & Commerce Committee to explore ways to move those under the association’s coverage to commercial insurance carriers over time, “thus avoiding a rate shock and reducing the risk of a massive financial tsunami to Texas taxpayers.”
He said the association has become a competitor to private-sector insurance companies, “disrupting market-driven pricing and undermining TWIA’s financial health.”
The association said in a statement it will help lawmakers in any way it can in considering windstorm insurance options for policyholders along the Texas coast.
Mark Hanna, a spokesman for the Insurance Council of Texas, said insurance carriers would be willing to work with the state in looking at windstorm coverage.
“The regular market is all for coming in and taking over in some point in time, but it has to do with rates and having competitive rates,” Hanna said. “They can’t even compete with TWIA rates. That’s been a problem all along.”
State Rep. John Smithee, chairman of the Texas House insurance committee, said he agrees in principle with Dewhurst.
“TWIA, in its current state, is not a sustainable organization,” he said.
