Dear agent,
The Texas Legislature recently passed several new laws that impact the Texas Windstorm Insurance Association (TWIA). We want to keep you informed about how these changes may affect your work with TWIA and your clients.
Over the coming months, TWIA will update our systems, processes, and resources to support the implementation of these new laws. Below is a summary of the key changes.
Topic
|
What Is This Bill?
|
What Will This Change?
|
TWIA Catastrophe Funding
(House Bill 3689)
|
This bill modifies how TWIA pays claims after a catastrophic storm, replacing TWIA’s authority to issue bonds with a state financing arrangement that is repaid by a statewide surcharge on most P&C policies. It also reduces the minimum amount of catastrophe funding TWIA must secure for each hurricane season.
|
These changes are expected to result in significant savings on TWIA’s reinsurance costs.
|
Prohibiting the Use of Premium Financing Arrangements for TWIA Policies
(House Bill 2518)
|
This bill prohibits premium financing arrangements on policies issued or renewed on or after January 1, 2026, due to the availability of free installment plans offered directly by TWIA. TWIA currently offers interest-free 2, 4, and 10-Pay installment payment plans.
|
Agents will no longer be able to select Premium Finance as a payment option as part of the application or renewal process.
|
Exempting TWIA/TFPA from Premium and Maintenance Taxes
(House Bill 2517)
|
This bill exempts TWIA and Texas FAIR Plan Association (TFPA) from state premium and maintenance taxes.
|
No effect on agents or policyholders.
|
Changes to Eligibility Requirements for TWIA Board of Directors
(House Bill 2213)
|
This bill changes the geographic requirement for TWIA non-coastal Board members to allow residents of second-tier coastal counties to serve in these positions. This bill also explicitly allows more than one agent to serve on the Board and requires industry Board members to reside in Texas.
|
No effect on agents or policyholders.
|
New Industry Bills
Below is a summary of industry bills passed that also affect TWIA/TFPA and how they may impact agents and policyholders.
- Requiring Carriers to Provide Written Reasons for Declinations, Cancellations, and Nonrenewals (House Bill 2067)
- What Is This Bill? This bill requires insurers to give written explanations when denying, cancelling, or non-renewing insurance policies.
- What Will This Change? TWIA and TFPA already provide written explanations related to these types of policy coverage decisions. However, updated Texas Department of Insurance (TDI) rules to implement this bill may require the Association to modify our current processes.
- Requiring Appraisal Process (Senate Bill 458)
- What Is This Bill? This bill requires automobile and residential property policies, including TFPA policies, to contain an appraisal provision.
- What Will This Change? TWIA is exempt from this bill, as there is already a specific appraisal process in the law for Association claims. While there is an appraisal process available for TFPA claims, it may require modification due to rules developed by TDI to implement this law.
We will keep you informed about changes to our processes to comply with the new laws and provide additional resources to help you transition.
Sincerely,
Texas Windstorm Insurance Association
|
