Houston Chronicle Loren Steffy column [Houston Chronicle]
By Loren Steffy, Houston Chronicle | |
McClatchy-Tribune Information Services |
[Material redacted.]
It's not actually my idea. I borrowed it from the
Those two state agencies have teamed up to obfuscate discussions within the insurance commission about restructuring the troubled finances of the state's windstorm insurer of last resort. Some solutions apparently being considered could raise property insurance rates substantially for coastal residents or even result in higher premiums for policyholders statewide -- from the Piney Woods to the
We don't know for sure because Insurance Commissioner
It's no secret that the windstorm pool's finances aren't sustainable. Its rates can't support the cost of the risk it shoulders underwriting about 60 percent of the windstorm policies along the coast.
If something doesn't change, the windstorm pool may have to tap some form of public financing, which ultimately could leave taxpayers on the hook.
This week, the insurance commission released an email about the windstorm pool that Kitzman sent to staffers in July, saying she wanted to discuss "options for funding a 3-5 year transition to market rates." She added: "Some thoughts include using the...."
The rest is redacted.
The email turned up in an open records request made earlier this year by the
Abbott said -- surprise, surprise -- the goings-on of a state agency is the public's business but allowed the commission to redact the end of Kitzman's email.
"It's important that we know what the commissioner is thinking," said
"The email was from her to some actuarial staff to look at some rate data," he said. "Because it mentioned market rates, it got some people concerned."
That's because "market rates" can be interpreted different ways. It could mean Kitzman wanted to discuss raising windstorm policy rates. One recent study found that to stabilize the windstorm pool, rates would need to jump as much as 45 percent.
But "market rates" also could imply forcing private insurers to write wind policies along the coast. Many have pulled out of the area because of high claims costs, which is why we have an insurer of last resort in the first place. If they're forced to re-enter the market, they may spread costs across policyholders statewide.
"TWIA's a mess," Winslow said. "What do we do about it? We need to discuss it out in the open."
Hagins said the email controversy is moot because the commission hired a consulting firm, Alvarez & Marsal Insurance Advisory Services, to present options for restructuring the pool. Those findings, sent to
Kitzman may not have been making a recommendation, but the public has a right to know what options the commission is considering or what options her staff has abandoned. Consultants may provide suggestions, but they shouldn't be speaking on behalf of the state's regulator.
The commissioner's insights matter. They shouldn't be whispered in secret, and when they are, the state's top cop shouldn't be helping to cover them up.
loren steffy Commentary
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