Sunset Committee Chair Wants Windstorm Insurance Agency Changes Taken Up By Legislature; Changes to LCRA Recommended

January 9, 2019


A decision on the direction of the Texas Windstorm Insurance Association (TWIA) is so important, because of financial considerations, that the chair of the Texas Sunset Advisory Committee is calling for the issue to be taken up by the entire legislature.

TWIA is “fundamentally unsustainable” in the view of the Sunset Commission, and does not “best serve the state, primarily due to its fundamental conflict…is it an insurer of last resort or a true insurance carrier?” as state Senator Brian Birdwell noted at Wednesday’s meeting of the senate committee.

The commission said in a report that the TWIA is “broke, in debt and facing a shrinking revenue pool,” its financial troubles exacerbated by Hurricane Harvey, which help call the association to the attention of legislators.

The Sunset Commission laid out two paths for correcting the alleged failure of the TWIA — “continue it as an insurer of last resort, or continue as an insurance company reliant primarily on premium funding and allow TWIA to compete with private industry.”

Sen. Birdwell said he didn’t believe the commission was an appropriate venue for deciding the future of the TWIA and a broader discussion is needed on TWIA policy changes —  because of “considerable financial implications” — and should begin in the state House.

There have been suggestions for a new direction at the TWIA.

As Insurance Journal has proposed, the Legislature could, restrict eligibility for TWIA to properties valued at less than $500,000 or require properties to meet certain building code requirements to mitigate the potential for storm damage if they want to continue to enjoy TWIA coverage.

“The association also could go a long way toward removing incentives to develop in risky areas by making new construction in the coastal zone ineligible for TWIA coverage,” the journal said.

Sen. Kirk Watson‘s requirements that the TWIA accept installment and credit card payments (with a surcharge) like any insurance company was adopted by the committee, as was his recommended requirement that the TWIA streamline its process, allowing renewals to be separate from new coverage by January 1st, 2019.

The committee also required TWIA to administer training manuals.

The committee also accepted Watson’s requirement that TWIA undergo Sunset scrutiny again within 12 years, post meetings and agendas, and Sen. Emily Pataki‘s requirement that TWIA post specific information on its website.


The commission also clarified that the Lower Colorado River Authority must increase the distinction  between its strategic funds and its operational reserve funds as a way to add transparency to the authority.

The Sunset Commission called for enhanced clarity in the LCRA’s reporting, including an annual report, with more details required for public consumption.

Sen. Kirk Watson modified a recommendation by the Sunset Committee, extending a Sunset recommendation that the LCRA provide public testimony at not only its board meetings but its meetings of the whole committee as well, Watson saying decisions are made at board meetings, but committee meetings are where important decisions are discussed, and the public should be part of that discussion.

The committee kept the Sunset Commission’s recommendations about the LCRA otherwise.


The Sunset Committee has been looking at possible changes in 19 state agencies and river authorities and, among other things, also recommended:


Reviewing the operations of four river authorities as the first set of the commission’s planned review
of all river authorities, resulting in the dissolution of one authority, the reclassification of one authority
to a water district, and increased transparency and accountability for the remaining two


Increasing effectiveness and transparency at the Texas Department of Transportation by implementing
a performance-based planning and project selection process, project development fixes and additional
contract management tools


Updating the State Bar of Texas’ ineffective rulemaking process, while preserving the unique authority
of State Bar members to approve certain rule changes and membership fees through a referendum