TWIA sets financial preparations for 2024 storm season
TWIA sets financial preparations for 2024 storm season | Insurance Business Australia
Reinsurance
TWIA sets financial preparations for 2024 storm season
Half a billion dollars’ line of credit also approved
Reinsurance
By
Kenneth Araullo
The Texas Windstorm Insurance Association (TWIA) board of directors convened in Austin on May 7 for its second quarterly meeting of the year, focusing on reinsurance arrangements and operational updates for the 2024 storm season.
At a previous meeting on February 20, the board resolved to secure $3.35 billion in reinsurance funding for the current storm season.
In addition, the board approved a measure to establish a $500 million line of credit, intended as a readily available fund to settle claims in case of a catastrophic storm hitting the Texas coast this year.
Should it become necessary to use this line of credit to cover claims, TWIA noted that the funds would be replenished through the issuance of Class 1 public securities post-storm, as stipulated by TWIA’s governing statute.
During the meeting, board chairman Chandra Franklin Womack also announced the appointment of Mary Keller, a former associate commissioner at the Texas Department of Insurance, as a non-Seacoast territory representative on the board. Keller’s term is set to conclude in 2027.
Further board updates included the appointment of board member Esther Grossman and the Office of Public Insurance Counsel to the board’s Actuarial & Underwriting Committee.
Additionally, the board’s Legislative & External Affairs Committee is scheduled to meet on May 21 to commence preparations for the association’s biennial report to the Texas Legislature.
In February, the Actuarial & Underwriting Committee of TWIA reached a unanimous decision to advise the TWIA board of directors to set the association’s 1:100 probable maximum loss (PML) for the 2024 storm season at $6.5 billion.
Factoring in approximately 15% for loss adjustment expenses (LAE), the committee adjusted the total PML to its current figure, with this recommendation informed by public input and catastrophe model analyses provided by Aon, TWIA’s catastrophe modeling partner.
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