Tuesday, March 4

TWIA: Blow Me Away

After a quick education about WPI-8, now repealed WPI-12, and the waiver, I have received a real lesson on the latest nonsense that is TX windstorm insurance compliance

But have failed to find the engineer standards set by the State of TX to insure 130 mph winds gust for 3 second in the 14 county area and east of Hwy 146 in Harris County, Tier I area. A structure across the road does not have to have it. Considering hurricanes do not follow straight lines, the lines drawn were a bit arbitrary and capricious.

A structure on the coast or east of HWY 146 that was built prior to 1966, sustained no wind damage from any hurricanes and added an addition on the part of the house in the 90s, told to change to galvanized nails by engineer, and no future followup from engineer to get WPI-8 compliance. There was no wind damage to the building from Ike or any hurricane prior, and cannot get wind insurance which would greatly limit our ability to sell it or get a loan to fix it up if it is not in 100% compliance.

From the research many of these engineering studies were conducted at TX Tech, Lubbock, a dry air environment, which were transferred to the codes on the coast. Does not seem right to me. So I researched who was on the board of windstorm insurance and found 7 of the 9 voting members to be in the insurance industry. Only member who does not have voting rights is the engineer from Galveston. That does not seem right.


Alternative Program: SB 1702
All exceptions outlined above terminate after December 31, 2015. Beginning January 1, 2016, to be eligible for coverage through TWIA, all structures must have certificates of compliance (WPI-8’s) for construction occurring on or after January 1, 1988, to certify they comply with the TWIA windstorm building code in effect on the date the structure was built, added to, remodeled, altered or enlarged. The following exhibit summarizes the certification and TWIA eligibility requirements under SB 1702.
WindstormInspection Division which was created by HB 2012 and it went into effect on January 1, 1988.


The Texas Department of Insurance manages the TWIA, the WID and the windstorm design criteria.

I do not want windstorm insurance, and would prefer to self-insure by putting my own money away every year in case of another storm like I did when Hurricane Rita hit and got a new roof. But if or when I decide to sail away, then I want to be able to sell the building. The Board of TWIA needs some voting structural engineers.
History after Hurricane Celia, 8-3-1970, Texas Catastrophe Property Insurance Association (now the Texas Windstorm Insurance Association): state's insurer of last resort for wind and hail coverage in the fourteen (14) coastal counties and parts of Harris County (east of Highway 146)
Sec. 2210.001. PURPOSE. The primary purpose of the Texas Windstorm Insurance Association is the provision of an adequate market for windstorm and hail insurance in the seacoast territory of this state. The legislature finds that the provision of adequate windstorm and hail insurance is necessary to the economic welfare of this state, and without that insurance, the orderly growth and development of this state would be severely impeded. This chapter provides a method by which adequate windstorm and hail insurance may be obtained in certain designated portions of the seacoast territory of this state. The association is intended to serve as a residual insurer of last resort for windstorm and hail insurance in the seacoast territory.

The association shall:
1.function in such a manner as to not be a direct competitor in the private market
2.provide windstorm and hail insurance coverage to those who are unable to obtain that coverage in the private market.
Added by Acts 2005, 79th Leg., Ch. 727, Sec. 2, eff. April 1, 2007.
Amended by: Acts 2009, 81st Leg., R.S., Ch. 1408, Sec. 5, eff. June 19, 2009.

Open to the Public Meetings each quarter:
  1. Wednesday, May 21, 2014, TWIA Board of Directors, Meeting 8 a.m. Marriott South, 4415 S IH-35, Austin, TX 78744
  2. Tuesday, August 19, 2014, TWIA Board of Directors, Moody Gardens Hotel, Galveston

TWIA (10 member panel- 9 voting members)
  1. Georgia Rutherford Neblett, Port Aransas, new chair of TWIA, husband Judge Daniel 'Duncan' Neblett, she was former mayor of Port A from 04-06, Dir of External Affairs, Dir of Development, University of Texas at Austin, Exec Dir of Mission-Aransas National Estuarine Research Reserve (MANERR), former chair of Corpus Christi Regional Transportation Authority, only voting member who said no in 5% increase in premiums for 2014, 'public member from Tier I County'
  2. Eugene 'Gene' John Seaman, Corpus Christi, developer and property manager of Alpha Seaman, former state representative 97-07, 'public member from Tier I County'
  3. Edward James 'E Jay' Sherlock III, Beaumont, insurance agent with Edwards and Sherlock, 'public member from Tier I County'
  4. Michael O'Malley, Insurance Industry
  5. Ron Lawson, Insurance Industry
  6. Michael Gerik, Insurance Industry, former chair
  7. Alice H. Gannon, Insurance Industry, vice chair
  8. Steven Lawrence Elbert, Lake Jackson, Insurance Agent, president and Exec Off of Elbert Insurance Agency and Brazoria Insurance Agency, 'public member from Tier I County'
  9. Richard Clifton 'Cliff' Craig, Amarillo, Insurance Partner at Neely, Craig & Walton Insurance Agency, 'public member from Non-seacoast territory'
  10. William David Franklin, Sr, Aran and David Franklin PE, Galveston, 'nonvoting member', licensed windstorm engineer
TWIA General Counsel, Mike Perkins, Sneed Vine & Perry PC
TWIA: Texas Windstorm Insurance Association
PO Box 99090
5700 South MoPac Expressway, Building A
Austin, TX 78709-9090
ATTN James C. Murphy, jmurphy@twia.org
Texas Department of Insurance Commissioner, Julia Rathgeber

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 FL successfully take on similar efforts to reduce these counts. This should be a strong goal of any state-backed insurer of last resort.”

Drenner cautioned that more needed to be done to lower policy counts for TWIA. “TWIA’s premium rates 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.”
by Nicole Roeberg, R Street Institute, 2-17-14

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