Now that we’re a good two-and-half months into hurricane season, it would be a good time to check in on the financial situation of the Texas Windstorm Insurance Association, the state-run agency that provides windstorm insurance to residents of designated counties along the Texas coast.

TWIA has a longstanding problem, in that the rates charged by the agency for its policies are not nearly enough to meet expected future claims. The agency has been making progress, however, with a series of rate increases that have reduced TWIA’s underfunding from 40 percent below actuarially sound levels to just 22 percent. And earlier this month, TWIA announced another 5 percent rate increase, further reducing its funding gap.

The Texas Windstorm Insurance Association board voted to approve a rate hike for property owners in coastal communities, despite opposition from legislators.

The 5 percent hike in premiums was approved on a 5-4 vote during the board’s meeting Tuesday in Galveston. It is the fifth consecutive year the board has approved a 5 percent increase.

This current increase is the last time TWIA will have an opportunity to consider rates before a legislatively mandated restructuring goes into effect in September.

As you may recall, one of the key points of contention over TWIA during the last legislative session had to do with the make-up of TWIA’s board. As originally conceived, TWIA’s restructuring would have increased the relative power of coastal residents (who have traditionally been hostile to rate increases). It was widely thought that such a move would have all but foreclosed any further rate increases. Ultimately, the enacted legislation reduced board representation for both the insurance industry and coastal residents, leaving neither side with a clear majority.

Whether the new board continues to move toward rate adequacy will be a key indicator of TWIA’s long-term sustainability. Of course, before we get to that point, we have to make it through another storm season.

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