Another Year In The Life of TWIA For Coastal Ratepayers Is In The Books

A road barricade in Corpus Christi, Texas (Matt Pierce/Getty Images)

Dealing with the ever questionable Texas Windstorm Insurance Association (TWIA) is almost a never ending battle for residents and businesses along the Texas Gulf Coast. For years the ratepayers have seen this group as a thorn in their side that promises to be by their side when they need them the most. But on Christmas Eve many Texans that call the Gulf Coast their home are still trying to figure out how best to deal with the newly proposed rate increase that TWIA handed down to them earlier this month. 

Coastal residential policyholders already ante up yearly cost of around $1,680. If the association’s proposed rate hike of 5% goes through as they hope it will, coastal residents would see an increase of nearly $100 per year on average. In a time when people are facing job losses, reduced income and constant uncertainty any increase that goes out the door is cause for concern. Those who live on fixed and reduced incomes could be the hardest hit by even an increase as small as this sounds. As lawmakers, policy wonks and local leaders work to figure out new ways to help those who are already facing smaller bank accounts, TWIA board members decided to slap them in the face, circle the wagons and protect their own instead of standing beside those that they promised to protect. And as everything goes with TWIA, their move to slap a rate increase on coastal Texas ratepayers wasn’t exactly above board. 

Back in August, the board of directors for the insurer of last resort for wind and hail in thirteen Texas coastal counties voted to file a 0% rate change with the Texas Department of Insurance. They did exactly what they were required by law to do every August— submit a rate filing with the Texas Department of Insurance. On Aug. 4, 2020 the board of directors voted to revisit the issue of rates at an interim meeting to be scheduled before its December quarterly meeting.

Each year by August 15 each year their rate filings are subject to review and approval by the insurance commissioner, but that too is a little bit up in the air at the moment. But TWIA was relying on a little known statue that works in their favor which would allow them to make a rate filing at any time. That is exactly what they did—even though it might not have been all above board. 

Earlier this month on Dec. 8, the Texas Windstorm Insurance Association’s board directed their staff to make the rate filing consistent with a 5% rate increase with the expectation that the change would go into effect no earlier than April 1, 2021. In their minds they were doing coastal Texas ratepayers a favor by not going any higher. But, TWIA, being controlled by the insurance industry and lobby as they are, decided that they were obligated to their companies and lobbyists to get something. That something was an anticipated 5%. 

The board’s justification for the increase was an independent study conducted for the association by Willis Towers Watson (WTW) earlier this year. That study claimed to have  found that TWIA’s rates are inadequate by 26% for residential coverage and 44% for commercial coverage.That was all the justification that the money changers needed to hear. 

So, TWIA, in all of glory decided to pull a slick move and raise the increase with what seemed to be little to no proper public notice when they met on December 8. There was no mention of a proposed rate hike on the agenda, there was no request for public comment on the issue specifically and there seemed to be no indication that the board of directors was even going to take up the issue. But moments into the meeting it became almost clear that board members and staff could have been working off of two separate agendas. 

The hint came when there was a reference to an action item on the agenda. The problem is that there was no action item listed on the formally posted public agenda as required by the Texas Open Meetings Act. That action item referred to the report by Willis Towers Watson and their recommendations. State Senator Juan “Chuy” Hinojosa, who made his objections to a rate hike very clear, took note of the discrepancy. So did other lawmakers such as Reps. Todd Hunter and Mayes Middleton who were following along with the meeting. The trio had been part of a more than 20 member list of lawmakers to sign a letter to TWIA asking them to not raise rates and let the legislature deal with it during the upcoming session. In fact, during his comment to the board of directors Senator Hinojosa said as much for the association to give the legislature time to work through the issues and decide what to do. But did TWIA listen? Of course not. They ignored lawmakers, apparently stripped Texans of their right to comment on such matters and ostensibly violated Texas open government regulations. But just as it has always been, they didn’t seem to care. 

Legal experts say that it does seem as if TWIA violated the Texas Open Meetings Act and that should a party bring some sort of challenge, the action of a rate increase could become voidable. As of December 24, 2020 it doesn’t seem as if that has happened but it still could. Legal analysts say that previous arguments in similar instances have been ruled that there is usually around 30 days to make an objection despite there not being a clear rule on the point of order. But even if there isn’t a challenge, the Texas legislature could, and likely will act when they convene in January of 2021. 

State Rep. Mayes Middleton from southeast Texas has already filed a bill that would move TWIA from the cozy confines of Austin down to somewhere on the Texas coast where they would have to live with the decisions that they make and find cheaper office rents than what they are getting on their multi-million dollar space in the Austin area. Middleton isn’t alone. Since the opening of filing there have been other bills filed that could be heard that would have implications on TWIA and the insurance agency as a whole. Change could be in the wind and in the hands of lawmakers who TWIA decided to tell can go to Hell…apparently. 

But for coastal residents and policyholders it is just another typical year-in-the-life with the Texas Windstorm Insurance Association. And that is a fight they will continue to live with until lawmakers finally get a belly full of their antics and make them go away for good.

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