With TWIA directors voting to establish a maximum loss threshold of over $4 billion going into the 2023 season, the agency is reporting that added costs will be forwarded to insurance providers.
Texas Windstorm Insurance Association (TWIA) board directors met on Jan. 19 and voted to establish $4.5 billion as the agency’s 1:100 probable maximum loss (PML) for the 2023 storm season. The 1:100 PML specifies the minimum amount of reinsurance needed to meet the association’s statutory funding obligations.
The board further directed TWIA staff and the association’s reinsurance broker to pursue $2.92 billion in reinsurance, in addition to $2.28 billion in statutory funding, to bring TWIA’s total funding for the 2023 storm season to $5.2 billion.
“Because the board elected to purchase an amount of reinsurance higher than the 1:100 PML, the cost for the $700 million in reinsurance above the PML will be paid by member insurance companies through an assessment,” TWIA announced after the meeting, adding: “Insurance companies that issue property and casualty insurance policies in Texas are required by law to be members of the association.”
Meeting materials and archived recordings for board meetings are available at https://www.twia.org/about-us/board-of-directors/archived-meetings/.