The deadline for the Texas Department of Insurance’s decision on a proposed 10 percent rate increase by the Texas Windstorm Insurance Association was pushed back Thursday by Texas Gov. Greg Abbott.
Abbott suspended a section of the Texas Insurance Code to provide the break. His aim is to provide more time for legislators to answer questions that the rate hike could potentially affect recovery efforts in the Gulf Coast.
“The actuarial soundness of TWIA is an important issue, but such a rate increase at this time would negatively impact the people of the Gulf Coast,” Abbott wrote in a letter Thursday to Texas Insurance Commissioner Kent Sullivan.
Governor Abbot’s office contacted 6 Investigates today to say:
“The Governor has heard from members of the community and the legislature on this issue. Communities and families are still recovering from Hurricane Harvey, and the Governor believed that a rate increase at this time would negatively impact residents of the Gulf Coast. The Governor believed it was necessary to delay any decision to approve or disapprove the proposed rate increase, and until the Legislature has had a full opportunity to address the matter.”
Locally, business and residents are attempting to rebuild after the devastation of Hurricane Harvey last year. It’s led to wide concerns about the proposed TWIA increase.
Under the Texas Insurance Code, state legislators have until Oct. 15 to decide on the rate increase. If they don’t settle it before then, the rate would be considered approved, a press release from the governor’s office said.
Compliance with that deadline fails to provide the state legislature with enough time to address the rate increase during the upcoming session. A lengthy delay, Abbott said, could force a quick decision that would hinder recovery efforts from Harvey.
TWIA today said in a statement sent to KRIS 6 News, “We are aware of the letter from Governor Greg Abbott to Insurance Commissioner Kent Sullivan suspending section 2210.352 of the Texas Insurance Code that prescribes the process for TWIA’s annual rate-filing. We remain committed to serving our policyholders on the coast as we await further direction from the Department of Insurance.”
State Rep. Abel Herrero (D-Robstown) praised Abbott’s decision.
“I am encouraged by Gov. Abbott’s suspension of any TWIA rate increases,” Herrero said. “By speaking in a loud and united voice, Coastal Bend residents halted a rate increase that would have hampered ongoing recovery efforts.
“While Gov. Abbott’s decision is helpful, we must continue our fight to prevent any future rate increases. I continue to join in your efforts to ensure nothing gets in the way of putting your homes, businesses, and lives back together after Hurricane Harvey.”
Abbott suspended Section 2210.352 of the Texas Insurance Code to provide the legislature with enough time to discuss the increase. Extending past the Oct. 15 deadline would keep them from making a rushed decision.
The suspension will remain in effect until June 16, 2019.