The Texas Department of Insurance (TDI) responded by email to questions from the Corpus Christi Business News about recent TDI rules implementing House Bill 3. The bill was approved by the 82nd Texas Legislature in 2011, establishing the ability to levy a surcharge on coastal residents in the event of a lack of funds to cover claims after a catastrophic weather event.
Answers were submitted by Jerry Hagins from the TDI Public Information Office
Q: Coastal Bend residents say the TDI did not give the concerns they expressed at three public hearings due consideration. They feel they have been ignored. How do you address that claim?
A: TDI received many comments from interested stakeholders through the public hearings including hundreds of individuals along the coast who took the time to express their thoughts on [the Texas Windstorm Insurance Association] and premium surcharges. In her order, [TDI Commissioner Julia Rathgeber] wrote that although she is constrained by Texas law, the Legislature is not. The commissioner expressed that she hopes the Legislature will consider the comments received on TDI’s rules should it revisit TWIA’s funding statute.
Q: How were the residents’ concerns addressed and considered?
A: Many concerns expressed by coastal residents and businesses could not be addressed through the department’s rule making. Instead, these concerns must be addressed through a change in state law.
One of the significant changes that resulted from the public comment addressed collection of the surcharges in the event that repayment of class 2 bonds was needed. Under the proposed rules, insurers could choose to collect the premium surcharges either up front or in installments. Under the final adopted rules, insurers must provide the same amount of flexibility when collecting premium surcharges that they provide when collecting premiums.
Q: Will the legislature be reconsidering windstorm legislation in 2015?
A: This question would be better directed to the legislative committees charged with coastal insurance issues. But we have every reason to believe that the topic will be examined in the next session, and we sincerely hope that the comments received relating to the funding rules will serve as a valuable resource for decision makers.
Q: How will that affect how TDI handles this issue in the future?
A: TDI will assist the Legislature as a resource during session, if requested, and implement any laws that are passed.
For more on the issue, check out our latest story, published in the July issue of Corpus Christi Business News.
