Archive for April, 2009

CSSB 14 has taken center stage in the windstorm insurance arena.

 After 4 substitutes for SB 14 had been presented, Lt. Governor Dewhurst is pressing for divergent views to be reconciled in time to pass a bill out of the Senate by May 6, 2009.  Coastal Senators have demonstrated to other Senators that many punitive provisions would harm the Texas economy.  The result is that bill revisions are possible which could make CSSB 14 acceptable to TWIA actual and potential future policy holders.

The House Insurance Committee has several windstorm bills left pending, including some of great concern, but it seems to be awaiting Senate action. 

 The Corpus Christi Chamber of Commerce has initiated, and ALL CWIC interested parties are encouraged to participate, in a noon May 5, 2009 “Don’t Kill the Coast” blitz at the Texas Capitol steps.  This action, attended by hundreds from all parts of the Texas Coast is designed to communicate in unmistakable terms that this is a life or death issue for the Coastal economy.

A Galveston County bus reservation form is attached below.  Others come by plane, train, bus or drive, but COME join your fellow Texans to show in the strongest communication possible–your bodily presence– that this is vitally important to you.  This is the best way to show YOUR Senator and Representative that YOU APPRECIATE THEIR STRONG PROTECTION!  

DON’T LET A “BAD” WINDSTORM INSURANCE BILL

  KILL THE TEXAS COAST!!

 

Join the Galveston Chamber of Commerce on a

 

 TRIP TO AUSTIN

 

Tuesday, May 5th, 2009

 

Bus will leave Target Parking lot at 7:00 a.m.

 

42 SEATS AVAILABLE

 

Chamber members will join the Mayor of Corpus Christi, the Corpus Christi Chamber of Commerce and their members

(14 buses) along with the CWIC – Coastal Windstorm Insurance Coalition

In support of Legislation beneficial to the Texas Coast. 

 

Supporters will meet at 12:00 noon on the Capitol Steps

 

Please RSVP Gina Spagnola at gspagnola@galvestonchamber.com

 

Reservations will be handled on a first come first served basis.

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CWIC Good and Bad points on “5 – 2” Temporary Funding Amendment
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Directors 5-2 Bill Draft 04/23/09

Friday, April 24, 2009 posted by admin

Directors 5-2 Bill Draft 04/23/09

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Report on the Texas Windstorm Insurance Association
April 2009

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The Ten Worst Insurance
Companies In America
How They Raise Premiums,
Deny Claims, and Refuse Insurance
to Those Who Need It Most

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19 5-2 plan bill draft 042009

Tuesday, April 21, 2009 posted by admin

By: _________________________ ___ B, No. ________

A BILL TO BE ENTITLED

AN ACT

Relating to the operation and funding of the Texas Windstorm Insurance Association.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 2210, Insurance Code, is amended by adding Section 2210.0581 to read as follows:

Sec. 2210.0581. TEMPORARY TRUST FUND SOLVENCY ASSESSMENT. (a) In this section, “trust fund” means the catastrophe reserve trust fund established under Subchapter J.

(b) To ensure available reserves and the capacity to pay excess losses, the members of the association shall be assessed for deposit in the trust fund, as follows:

(1) the amount of $300 Million.

(2) the assessments under section (b) shall be collected annually beginning on the 30th days after the effective date of this act, and ending on the same date in the year 2013.

(3) the proportion of the assessment under section (b) allocable to each insurer shall be determined in the manner used to determine each insurer’s participation in the association for the year under Section 2210.052.

(c) To further ensure available reserves and the capacity to pay excess losses, each insurer, the association, and the Texas FAIR Plan Association shall collect from its policyholders a premium surcharge as provided by this subsection, and shall remit the premium surcharge to the association for deposit into the trust fund as required by commissioner rule..

(1) A premium surcharge in the amount of 5% shall be assessed to all policyholders who have a property or casualty policy that provides coverage for premises, locations, operations, or property located in a catastrophe area

(2) A premium surcharge in the amount of 2% shall be assessed to all policyholders who have a property or casualty policy that provides coverage for premises, locations, operations, or property located in this state not in a catastrophe area.

(d) A premium surcharge under this section shall apply to all policies that provide coverage on any premises, locations, operations, or property for all property and casualty lines of insurance, other than federal flood insurance, workers’ compensation insurance, accident and health insurance, and medical malpractice insurance. The premium surcharge does not apply to premiums charged for any premises, locations, operations or property located outside this state.

(e) A premium surcharge under this section is a separate nonrefundable charge in addition to the premiums collected and is not subject to premium tax or commissions. Failure to pay the surcharge by a policyholder constitutes failure to pay premium for purposes of policy cancellation.

(f) A premium surcharge under this section shall be collected annually beginning September 1, 2009, and ending August 31, 2014.

(g) This section 2210.0581 expires September 1, 2014.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.

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CWIA commentary on TWIA provisions in SB 1007 Hegar, SUNSET

Tuesday, April 21, 2009 posted by admin

CWIA commentary on TWIA provisions in SB 1007 Hegar, SUNSET

This bill is considered the Texas Department of Insurance [TDI] ‘Sunset’ Bill, but has been expanded to include significant parts of the Texas Windstorm Insurance Association [TWIA] Act, Chapter 2210, Insurance Code.

Provisions considered favorable include:

-Changes intended to qualify TWIA for federal tax ‘exempt’ status.

-Changes to the board of directors, EXCEPT repeal of OPIC nominations of public members, and retention of insurer ‘nominations’ of insurer representatives.

Provisions considered to be Unfavorable include:

-Restricting eligibility for TWIA coverage of ‘insurable property’ to applicants who first obtain ‘2 declinations’ annually. This new ‘screening’ red tape can be expected to create annual turmoil with out of state mortgagees [some may leave the Texas Coast]. It can be expected to cause unnecessary and devastating lapses of coverage when a hurricane is about to enter the Gulf.

-Administration of Building Code inspection and certification would be transferred from TDI to TWIA. At a time that TWIA growth is being discouraged, putting the ‘1st party fox in charge of the henhouse’ is seen as having the capacity and possibly the intent to deny coverage to deserving and needful Texans. TDI has handled this meaningful program for over 20 years as a qualified 3rd party agency—TDI should not be FIRED.

Additionally, great detail is added regarding a “plan”, and many other specific requirements which can be expected to add layers of bureaucracy to a system which has been working successfully for years without them. These changes suggest a ‘technicalities’ disqualification purpose, harmful to property owners doing their good faith best to comply.

-2210.452 (c) (2) would change reinsurance to an ‘operating expense’. 100% of ‘operating expense’ is loaded in rate development, but about half [25% loading in the 2008 TWIA rate filing] is actuarially excluded by TDI because it is DUPLICATION of projected losses. If this change is approved, TWIA rates will include this DOUBLE CHARGE, unfairly increasing rates approximately 25%. Also, TWIA will be motivated to spend even more than the approximately half of gross premium it has spent for reinsurance in recent years. This would SQUANDER FUNDS which would otherwise be AVAILABLE TO PAY LOSSES or BUILD RESERVES[CRTF].

CWIC [Coastal Windstorm Insurance Coalition] Lee Otis Zapp, Jr., April 19, 2009

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April 19, 2009 Review of TWIA parts of SB 1007, Hegar, SUNSET BILL

[HB 2203, Isett, is House companion bill]

Article 7 of SB 1007 deals specifically with the TWIA statute, Chapter 2210 Insurance Code; the following are subsections of Chapter 2210:

.052 and .060 Are amended to help qualify TWIA for federal tax ‘exempt’ status.

.1015 Is added changing the TWIA board of directors to 5 insurer representatives [nominated by TWIA insurer members], 4 public members [repeals nomination by OPIC], and 2 agents. All serve by appointment and at the pleasure of the commissioner; this complies with an indicated IRS requirement to qualify for ‘tax exempt’ status.

.152 Requires the plan of operation to include a ‘plan for property inspections’

.202 Eligibility for a TWIA policy newly requires evidence of ‘two declinations’ of voluntary market coverage. For renewal policies, a possible exception is provided.

.251 Building code inspections and certification is changed from TDI to TWIA. TWIA may charge reasonable fees, must report quarterly to TDI—which monitors TWIA.

.254 TWIA ‘contracts’ with ‘qualified inspectors’.

.2541 Newly requires TWIA to develop an ‘Inspection Program’, including standards, regulations, training and education for licensed engineers, fee guidelines, complaints, and ‘regular reinspections’. Possible engineer license violations must be reported to TBPE. Procedures for issuance of certificates of compliance are required.

.255 An engineer may request a contract to perform inspections, but must provide information satisfactory to the board [after commissioner consultation] showing qualification.

.2565 TWIA board must develop procedures for contracting with inspectors, including oversight, and grounds for sanctions.

.452 Adds favorable ‘tax exempt’ language.

2210.452 (c) (2), Insurance Code, defines ‘reinsurance’ as TWIA “operating expense”.

.454 TDI use of CRTF earnings to pay for code inspections is REPEALED.

.254 (d) TDI inspection fees, .256 Discipline of Inspectors, and .257 Deposit of TDI inspection fees are each REPEALED.

.301, et seq., Subchapter G, Reduction of rates if building codes are stricter, is REPEALED.

The effective date of the act is September 1, 2009. ‘Declinations’ and the new board of directors starts January 1, 2010.

CWIC [Coastal Windstorm Insurance Coalition] Lee Otis Zapp, Jr., April 19, 2009

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CWIC BULLETIN # 3

Monday, April 20, 2009 posted by admin

CWIC [Coastal Windstorm Insurance Coalition] BULLETIN # 3

1.) Please visit, and alert other interested parties to visit, our new website www.cwictx.org .  This site includes CWIC bulletins, analysis and bullet reports on the major windstorm bills, and links to specifically related information.  A link to the April 7, 2009 House Insurance Committee windstorm bills hearing has been added, which includes debate of many key windstorm issues.

2.) CWIC review of the windstorm bills which could have the most serious impact on policyholders indicates that the following bills should be OPPOSED or SUPPORTED:
OPPOSE:
SB 14, Fraser
HB 911, Smithee
HB 4733, Smithee
SUPPORT:
SB 734, Jackson
HB 2467, Eiland
HB 3853, Eiland
HB 3640, Hunter
HB 3648, Hunter
Please address your Representatives and Senators requesting that they Oppose or Support these bills.  An important additional request is to ask that they support any action by Senators Mike Jackson, and Joan Huffman, and Representatives Craig Eiland, Todd Hunter, and Larry Taylor, solidly coastal Members.

There are 45 days left in this 81st Legislative session.  Thanks to the inspired work of our coastal Members, AND the active encouragement of coastal Texans from the Sabine river to the Rio Grande [including calls, faxes, letters, Austin visits and attendance at Committee Hearings], no bill, other than the “Sunset” bill had been voted out of committee.  The [SB 1007, Hegar, and HB 2203, Isett] “Sunset” bill, includes several unhappy provisions, but does not deal with the vital issues of TWIA rates and funding.  It is on the consent calendar in the Senate, and has been left “pending” in the House Insurance Committee.

On April 16, 2009, however, at the end of the Senate session, Chairman Fraser suspended the rules, called a meeting at his desk, and got CSSB 14 out of the Business and Commerce Committee.  This 60 page bill is laced with new costs and many TWIA changes, cumulatively making the “insurer of last resort” much more expensive, and less available to those who are victims of insurers’ abandonment, and have no alternative to TWIA.

The policy holder’s best interest lies wtih the bills authored by Jackson, Eiland, or Hunter.  More importantly, it is critical that NO bill authored by Fraser or Smithee pass either House or Senate.

PLEASE RENEW YOUR EFFORTS TO MAKE SURE YOUR SENATOR AND REPRESENTATIVE KNOWS THAT YOU CARE ABOUT WINDSTORM INSURANCE BILLS. Suggest they consult with and consider following the lead of Representatives Craig Eiland and Todd Hunter, as well as Senator Mike Jackson.
HOUSTON IS IN THE ‘SECOND ROW’ OF COUNTIES, AND IS IN LINE TO BE THE NEXT TARGET OF THE INSURANCE COMPANIES, IF THEY WIN THIS YEAR.

For CWIC: Lee Otis “Otie” Zapp, Jr.

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