The Texas House of Representatives has established a joint committee who are to be tasked with looking at alternative ways to provide property insurance to Texans living in coastal regions. Currently that protection is provided by the Texas Windstorm Insurance Association (TWIA) who recently looked into issuing catastrophe bonds but then decided against that route due to the cost.
The committee know as the Joint Interim Committee to Study Seacoast Territory Insurance will examine alternative ways to provide insurance to Texas’ coastal territory. It’s assumed that this will include looking at alternative reinsurance mechanisms such as catastrophe bonds, expanding the role of TWIA and also disbanding TWIA and allowing the private markets to provide risk based priced insurance products, among other alternatives.
The committee is also tasked with looking at the windstorm and hail insurance markets in other states to see how they operate and also risk mitigation strategies and building codes.
“Texans who live along the coast need to be able to count on their windstorm insurance,” said Speaker of the Texas House of Representatives Joe Straus. “This committee will review alternative methods to provide insurance coverage in coastal areas and help protect the safety and well-being of the residents and businesses along the 367 miles of Texas coastline.”
So it looks like cat bonds will likely be assessed again in Texas and this committee is likely to study the way cat bonds have been used by other windstorm organisations such as in North Carolina. Perhaps with legislator backing TWIA may be able to receive some additional funding to move the cat bond issue forwards.