Hurricane Insurance Causing A Storm In Texas Legislature

June 08--AUSTIN -- As they do every year, a week ago state officials reminded all Texans that hurricane season, which is from June 1 through Nov. 30, has arrived.

"As a new hurricane season begins tomorrow, the most important element of emergency response starts with the individual," Gov. Rick Perry said in a May 31 statement.

"Everybody in Texas, particularly those along the coast, needs to have an emergency plan, an emergency supply kit and an evacuation route in place before a hurricane strikes," Perry said.

Whether the Texas coast and the entire state are financially prepared for a devastating hurricane -- like Katrina in 2005 or Sandy last year -- is debatable.

As the special session on redistricting Perry called on May 27 reaches its halfway point Monday, the governor has not said whether he would add the Texas Windstorm Insurance Association to the legislative agenda.

The association, better known for its initials TWIA, is the state-run insurer of last resort for about 250,000 homeowners in 14 counties along or near the coast who cannot get coverage from insurance companies because they are a high risk when a major storm devastates the area.

Call it the unfinished business of the just-concluded regular session of the Texas Legislature.

TWIA reform, transportation funding and allowing public colleges and universities to issue tuition revenue bonds, were some pressing proposals that didn't get resolved in the 140-day session and were expected to be tackled in a special session.

But since Monday is the halfway point of the special session that cannot last more than 30 days, time is running short for some of those items, particularly for TWIA because the most devastating storms in Texas usually occur from late August through early October.

Perry said a week ago TWIA is unfinished business but did not fully commit himself to add it to the special session agenda.

"It is a complex issue as diverse as the state with the huge exposure that we have along the Gulf Coast," he said. The governor is the only state official who can call the Legislature back for a special session and decide the items on the agenda.

The failure so far to pass a comprehensive TWIA bill worries Rep. John Smithee, R-Amarillo.

"TWIA is underfunded," said Smithee who, despite representing a region that does not worry about hurricanes, deals with TWIA issues in every session because he chairs the House Insurance Committee.

"It is not a sustainable system in place right now and that is what I think we need to be concerned to fix," Smithee said.

The biggest areas of concern for the state are Galveston, Corpus Christi, Beaumont and the tip of the Rio Grande Valley -- in that order -- Smithee said.

"That's a combination of risk factor and population centers," he said. "Galveston is at the top of the list because it is so exposed."

For years TWIA has been a thorny issue for Texas officials because it is subsidized by the state -- with required financial help from commercial insurance companies -- and because it has had numerous financial troubles.

The association's problems received lots of unwanted attention after Hurricane Ike devastated the coast in 2008. There were numerous allegations of fraud and mismanagement and nearly 2,000 policyholders sued it on grounds that it failed to pay legitimate damages.

In the Legislature, part of the problem with TWIA is that at times there is no clear consensus as to what the lawmakers should do to fix its troubles or just deal with the quasi agency.

"For those of us who live on the coast, we know how to handle a hurricane season and it is hard to predict what will happen," said Rep. Todd Hunter, R-Corpus Christi, a past member of Smithee's panel.

"Sometimes you have an active season, sometimes you don't," Hunter said. "I don't think we should overexaggerate.

"But Corpus Christi has not had a major hurricane since 1970, that was Celia," he said. "So, my constituents say 'Why are we paying such high rates since we haven't had a major storm since 1970?'

"It is not like it is inevitable. Look at all the hail, look at all the storms, look at all the tornadoes and nobody says anything about that, they all worry about hurricanes," Hunter stressed. "In fact, according to the property insurance folks, the biggest claims (in the state) are for hail damage."

Rep. Abel Herrero, D-Corpus Christi, said it would help to reach consensus on windstorm insurance legislation if the lawmakers and the entire state saw the issue as a statewide issue, not a coastal issue.

Moreover, contrary to what some of his fellow legislators say, TWIA is prepared to meet its obligations, Herrero said.

"I think we are on the right path," he said. "I think we are prepared for at least this hurricane season and we look forward to do whatever additional work we need to do."

If Perry adds TWIA to the special session agenda, this is the kind of debate expected on windstorm legislation.

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