The Texas Windstorm Insurance Association’s board voted Oct. 8 to ask the Legislature for four changes in state law when lawmakers return in January 2027: a repeal of a special-judge requirement for lawsuits against the association, public money for storm-resistant construction, repairs to the 2025 law that rebuilt how it pays for a catastrophe, and a redesign of the program meant to move coastal policies to private insurers.
The last of the four would end a homeowner’s right to turn down a private insurer’s offer, and it drew a written objection from a Houston-area legislator before the board met.
TWIA, as the association is known, is the state-created insurer of last resort for wind and hail damage along the Texas coast, covering property owners in 14 coastal counties and part of Harris County who cannot find coverage from private companies. State law requires its board to file a report to the insurance commissioner, the Legislature’s insurance committees and the Sunset Advisory Commission by Dec. 31 of every even-numbered year, listing any changes in law it wants and the reasons. The four recommendations adopted Oct. 8 will make up that report. Each one would take an act of the Legislature.
TWIA recommends that lawmakers repeal, or make optional, a provision requiring every lawsuit over a denied claim to be heard by a judge appointed by the state’s multidistrict litigation panel, the body that normally assigns judges to large groups of related cases. According to the board materials, no litigant asked for such an appointment in the law’s first 14 years. After a 2024 Texas Supreme Court ruling in TWIA v. Pruski held that the omission does not void a judgment, the association began seeking the appointment in every case, about 20 so far, while only one plaintiff’s lawyer has done the same. TWIA says the requirement adds delay without changing which judge hears the case, since the panel has consistently appointed the judge already assigned.
TWIA recommends that the Legislature consider public funding for FORTIFIED construction, a voluntary beyond-code roofing and building standard developed by the Insurance Institute for Business and Home Safety that several other Gulf and Atlantic coast states already subsidize. The materials say the money could come from TWIA’s own revenue, its catastrophe reserve, the state or other sources, and that a FORTIFIED home exceeds the windstorm building code TWIA already requires. The association’s staff cautioned that any premium discount for such homes would need further analysis and would not require a change in law.
TWIA recommends two fixes to House Bill 3689, the 2025 law that lets the association borrow up to $1 billion from the state after a storm drains its catastrophe reserve and repay it through a surcharge on property insurance policies statewide, collected over no more than three years. That law passed the Legislature in June 2025 and most of it took effect that September.
Working with the Texas Department of Insurance, the comptroller and the Texas Treasury Safekeeping Trust Company to put it into practice, TWIA says it found that the administrative lead time to set up the surcharge may not leave a full three years to collect it, and that the law forces the entire surcharge process even when losses barely exceed the reserve. It is asking for up to a year to be added before collection begins, and for an alternative repayment source, such as its own premium revenue, when the amount owed is small.
The fourth recommendation is the one with the most direct effect on policyholders. TWIA recommends that the Legislature overhaul its Assumption Reinsurance Depopulation Program, under which private insurers review TWIA policy data and offer to take over policies. Participation is voluntary at every step, and it has collapsed: carriers assumed 11,164 policies in the first round in 2016-17, 57 in 2022-23, and none in the three years since, according to the materials. Two companies that took policies in earlier rounds, Weston and Maison, were placed into receivership in 2022, and TWIA had to write more than 12,000 of those policies back onto its own books.
The board asks for two changes. First, TWIA would be authorized to pay a bonus to a private carrier for each policy it takes, subject to a multi-year renewal requirement and Texas Department of Insurance approval; staff offered illustrative figures of $100 for a barrier-island home, $75 for the first five miles inland, $50 for five to 10 miles and $25 beyond.
Second, under what staff labeled the “20% Rule,” a policyholder would become ineligible to renew with TWIA if a private insurer offers comparable coverage at a premium no more than 20 percent higher than TWIA’s. The homeowner would get notice and a short window to choose. Not responding would transfer the policy. Declining would bar the homeowner from TWIA for three years, though the materials say the window would let a homeowner shop for a different private insurer. The design borrows from Florida’s Citizens Property Insurance Corporation, whose policy count peaked at 1.42 million in 2023 before falling under similar rules.
State Rep. Dennis Paul, a Republican whose southeast Harris County district includes communities on Galveston Bay, told the board in a letter dated Oct. 7 that he strongly opposes the rule. “A family paying $4,000 annually for windstorm coverage could be forced to pay $800 more simply to maintain coverage,” Paul wrote. “Private insurers should earn that business through competitive pricing and reliable coverage, not through a policy that removes the homeowner’s choice.” He urged the board to keep depopulation voluntary.
Two ideas did not make the list. The board’s legislative committee had advanced a fifth topic in September, Florida-style tort reform, which does not appear among the adopted recommendations in TWIA’s own meeting summary. The committee had earlier dropped a proposal to limit TWIA coverage to owner-occupied homesteads, an issue that surfaced at the House Insurance Committee’s Oct. 5 hearing.
The recommendations arrive as the association expects to shrink slightly. Budget materials presented the same day project written premium of $770.6 million for 2027, down 4.5 percent from the 2026 forecast, with no rate change assumed, and a policy count easing from a forecast 288,898 at the end of 2026 to 286,201 a year later. The catastrophe reserve is forecast at about $59 million at the end of 2026 and roughly $350 million at the end of 2027 if no major storm hits.
The report is due to the Legislature by Dec. 31. Whether any of the four recommendations becomes a bill is a decision for lawmakers when the 90th Legislature convenes in January 2027.