The board of the Texas Windstorm Insurance Association (TWIA) has approved an additional Class 1 member assessment of $106.8 million for losses from hurricane Harvey.
The unanimous decision follows the $175 million approval by the TWIA board in May, 2018, after loss creep from the storm resulted in TWIA increasing its ultimate loss and loss adjustment expenses for the event to $1.61 billion.
At the time, TWIA said that if its total loss estimate proved to be accurate, it would need an additional $321.3 million in member assessments. The $175 million approval in May combined with the recent $106.8 million approval, falls short of the additional requirement from member assessments, totalling $281.8 million.
However, according to A.M. Best, TWIA’s Chief Financial Officer (CFO), Jerry Fadden, told the board that the Department of Insurance has said that TWIA could use $39.4 million in Q4 2017 earnings as part of its funding sources, which takes the total up to the additional member assessments required.
TWIA has also announced that its board has approved, by a 5-4 vote, a 10% rate increase for residential and commercial policyholders, for 2019.
The proposed rate increase still need to be approved by the Commissioner of Insurance. And if approved, it will go into effect January 1st, 2019 and apply to all TWIA residential and commercial properties. New business and renewal policies issued in 2018 will not be affected by the rate increase until the policies renew in 2019, explains TWIA.