The Texas Windstorm Insurance Association will not go into receivership, at least not right away.
After hearing from coastal stakeholders, the TWIA board met in a closed session to discuss the receivership proposal and then voted to postpone a decision on receivership. The board said TWIA would instead evaluate an offer by trial lawyers to settle remaining Ike litigation cases.
Representatives from Texas coastal counties, cities and business organizations on March 25 spoke before the board of the state’s insurer of last resort urging them to oppose the proposal by state regulators to place the organization in receivership.
The insurer’s liabilities exceed its assets by more than $183 million, largely due to cost of claims and litigation stemming from Hurricane Ike in 2008, according to the Texas Department of Insurance.
TWIA has been under supervision of TDI since early 2011. TDI proposed that TWIA be placed in receivership so that it can begin a process of rehabilitation, which in TDI’s view would “revitalize” the insurer.
State lawmakers are considering several measures to restructure TWIA and shore up its finances. At the March 25 meeting, speaker after speaker urged the board to let the legislative process work.
Ann Vaughn, with the Port Aransas Chamber of Commerce, said if the “insane idea of putting TWIA in receivership” were to prevail, the ramifications would be felt not only along the coast but in the whole state of Texas as well.
Several speakers said the proposal to put TWIA in receivership has already had a disruptive influence on coastal residents and the business community.
“Doubt about viability of insurance has already caused nervousness on the coast,” said Keith McMullen, mayor of Port Aransas.
Foster Edwards, president and CEO of the Corpus Christi Chamber of Commerce, said his group also is “concerned about the idea of going into receivership … we think it’s a bonehead idea frankly.” He took the board to task for not having assessed insurance companies following Ike “when it could have and should have.”