Ike on Texas

While it’s too early to know the precise location of Hurricane Ike upon landfall, it’s clear that Texas looks to be facing a major storm by the weekend. The Texas Windstorm Insurance Association (TWIA) is the state’s insurer of last resort, providing wind and hail insurance for Texas Gulf coast residential and commercial property owners in the event of catastrophic loss. Its exposure base has grown rapidly in recent years. Under its current financial structure, the pool has total funding of $2.3 billion, comprising insurer assessments, the state’s Catastrophe Reserve Fund and reinsurance. This season, the TWIA has already made a $100 million assessment of its member insurers for Hurricane Dolly. It’s important to remember that any losses to TWIA in excess of $2.3 billion would be financed via an unlimited assessment on insurers that is recoverable through premium tax credits. This means that storms producing insured losses to TWIA in excess of $2.3 billion would have fiscal implications for the state. Check out I.I.I. Texas insurance market facts and stats.  

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