AUSTIN, Tex. (Feb. 17, 2014) — The R Street Institute welcomed news of a study to examine the benefits of enabling private insurers to voluntarily take homeowners policies out of the residual market in Texas. In an alarming trend, policy counts for the Texas Windstorm Insurance Association have grown more than 243 percent since 2005, diluting the company’s true purpose as an insurer of last resort.

The idea proposed by the study is to allow both customers and private insurers to access the underwriting information for TWIA and to determine whether they want to underwrite the business. This program would be voluntary for current TWIA customers, whose data would not be published if they chose to opt-out of the program.

“Allowing free market forces to take over wind and hail exposure would be a strong first step toward lowering TWIA’s policy count,” said Julie Drenner, Texas Director of the R Street Institute. “We’ve seen insurers of last resort in states like Florida successfully take on similar efforts to reduce these counts. This should be a strong goal of any state-backed insurer of last resort.”

Florida’s state-run Citizens Property Insurance Corp. announced last week that the policy count had dropped below 1 million for the first time since 2006, through a series of takeout efforts and legislative initiatives.

Drenner also cautioned that more needed to be done to lower policy counts for TWIA. “TWIA’s premium rates also need to be examined and made to be actuarially sound,” she said. “This is a crucial step toward making the market competitive for private insurance companies.”

The Texas Insurance Association Clearinghouse Feasibility Study may be found on TWIA’s website at

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