As I’ve written ppreviously, Texas’ market for coastal windstorm insurance is in dire need of reform. Insurance rates for the Texas Windstorm Insurance Association, a state-run agency that provides wind coverage in certain Texas counties near the Gulf Coast, are currently 22 percent below what would be considered “actuarially sound.” While TWIA has managed to improve its financial position substantially in the last few years, a single major storm could take the agency back to square one.

But there are good ways to reform TWIA and there are bad ways. Currently, the Legislature is considering proposals that would restructure TWIA, changing the composition of the agency’s board and even changing the organization’s name. Unfortunately, as currently written, this legislation — which cleared the Senate Business and Commerce Committee April 14 and could be up for a vote by the full Senate as early as next week — would not deal with the basic problems of TWIA, and could undermine even the progress that’s recently been made.

For example, TWIA has closed the gap needed to achieve actuarially sound rates via a series of narrowly approved rate increases. It’s not clear that such increases would be able to pass with a restructured board. The larger the gap, the bigger the amount for which Texas taxpayers may ultimately be on the hook should TWIA be unable to meet its financial obligations.

Instead of making it harder for TWIA to reach financial stability, reform legislation ought to build on the progress TWIA has already made. Right now, for example, TWIA is restricted from charging different rates within its territory based on geography. Simply allowing this tool would go along way toward achieving actuarial soundness. TWIA has also launched a “depopulation portal,” a special website that makes it easier for private insurers to take current TWIA policies on a voluntary basis. One company has already announced its intention to make offers on almost 60,000 policies via the portal. Other states such as Florida and Louisiana have had a lot of success in using depopulation portals to get people back into the private insurance market, and Texas should look at strengthening the current portal along similar lines.

Most importantly, though, Texas should follow the medical maxim: first, do no harm. Any legislation that impedes TWIA’s progress will ultimately leave all Texans more exposed to risk.

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