Agents with depopulation offers,
You were recently notified that policies your agency represents were selected by the insurance company participating in the TWIA Assumption Reinsurance Depopulation Program (Assumption Program). We wanted to provide guidance as to how you can be fully informed about changes to premiums that may result from a policy transfer.
If you decide to contract with a depopulation insurer and approve an offer through the Assumption Program, the policy’s premium may be different than TWIA's premium when it is renewed by the new company after the current policy term ends. For policies that you approve to be transferred, see the following:
- Between your approval and the assumption date (March 1, 2023), the policy will remain with TWIA.
- On March 1, 2023, the policy will legally transfer to the assuming carrier but remain on TWIA’s policy form with the same coverages and premium until it is renewed by the assuming carrier at its renewal date.
- Due to the renewal processing cycle, policies expiring prior to May 1, 2023 will renew with TWIA one additional year even though they will legally be considered transferred. At the next renewal (2024), the policy will switch to the assuming carrier’s policy form, coverages, and premium. Policies effective on or after May 1, 2023 will renew directly with the assuming carrier with that carrier’s forms, coverages, and premium.
- For three years, depopulation insurers are required to offer comparable coverage and premiums (no more than 115% of TWIA's premium). After that date, the new insurer can offer any rate filed with TDI.
Besides the fact that premiums must be no more than 115% that of TWIA, we cannot confirm or guarantee what the precise premiums of the depopulation insurers will be. Agents should communicate directly with depopulation insurers about premiums when entering into contracts with these companies, including any underwriting requirements that could affect premiums. For information about depopulation insurers, please follow links from our website.
At any time, including the three-year period when depopulation insurers are required to offer comparable coverage and rates, policyholders may return to TWIA as long as they keep current Certificates of Compliance and meet all other eligibility requirements. You and your clients are always free to work with the insurer of your choice.
Thank you,
Texas Windstorm Insurance Association
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