House Insurance Committee Discusses HB 1940

The Texas House of Representatives Committee on Insurance held a hearing on Tuesday, March 19, 2019, where it discussed HB 1940, which would allow eligible surplus lines insurers to write windstorm and hail insurance, even if coverage is available from the Texas Windstorm Insurance Association (TWIA).

Rep. Eddie Lucio III, the sponsor of the bill, stated that TWIA is only authorized to write coverage for loss resulting from windstorm and hail perils. He said that policyholders insured by TWIA must obtain the balance of their property insurance through private insurers or the Texas FAIR Plan. He noted that there is confusion in the marketplace as to whether surplus lines insurers may lawfully provide insurance coverage to residents in TWIA’s coverage area.

“HB 1940 would make it clear that surplus line insurers may provide insurance coverage to the residents of these counties, without regard to the availability of TWIA coverage,” Lucio said. “Under 1940, the resident would be free to purchase coverage from TWIA or a surplus line insurer willing to insure their property.”

Beaman Floyd, Director of the Texas Coalition for Affordable Insurance Solutions, also spoke in favor of the bill. He said that it was a way to clarify the existing law and secure additional underwriting capital for the coastal area.

Members of the committee had no questions on the bill and it was left pending.