All Roll Calls
Yes: 505 • No: 50
TexasHB 368989th Legislature Regular SessionHouseWALLET
Relating to funding of excess losses and operating expenses of the Texas Windstorm Insurance Association; authorizing an assessment; authorizing a surcharge.
Sponsored By: Greg Bonnen, Todd Hunter, Lois Kolkhorst (Republican), Tom Oliverson, Dennis Paul, Denise Villalobos
Became Law
Disaster Preparedness & ReliefFees & Other Nontax Revenue--StateInsurance--Property & CasualtyState Finances--AppropriationsState Finances--Management & ControlWINDSTORM DEVICES & INSURANCECOMPTROLLER OF PUBLIC ACCOUNTSINSURANCE, COMMISSIONER OFTREASURY SAFEKEEPING TRUST COMPANY, TEXASWINDSTORM INSURANCE ASSOCIATION, TEXAS
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Bill Overview
Analyzed Economic Effects
9 provisions identified: 1 benefits, 2 costs, 6 mixed.
Insurers pay remaining windstorm catastrophe costs
TWIA must assess member insurers for catastrophe losses and operating costs left unpaid after the state-financing funding step. Total assessments cannot exceed $1 billion per catastrophe year. Each insurer's share follows its TWIA participation share, and the board must notify insurers of their amounts. Insurers cannot recover these assessments through premium surcharges or tax credits. They can buy reinsurance before an event to cover assessment risk; insurers without that protection remain liable.
State loans help pay windstorm claims
For catastrophe years after 2025, TWIA must arrange up to $1 billion in state financing after revenue and reserves run short. Financing is also authorized for qualifying losses from earlier catastrophe years. The comptroller can use Economic Stabilization Fund money only when eligible balances exceed the required sufficient balance. Financing allows up to $500 million before an event and up to $1 billion after an event depletes the trust fund. The post-event limit is reduced by outstanding financing; total outstanding financing cannot exceed $2 billion. Fund investments for this purpose cannot exceed $1 billion per catastrophe year. Loans last no more than 36 months and charge the comparable U.S. Treasury interest rate plus 2 percentage points. Contracts require repayment coverage between 1.10 and 1.25 times. Catastrophe surcharges secure repayment; these arrangements do not pledge state or local taxing power and are payable only from authorized revenue.
Windstorm reserves and surplus support claims
TWIA must use net gains for catastrophe reserves, reinsurance, or other risk financing. Net gains are calculated after losses, operating costs, financing obligations, and related administrative costs. The reserve trust fund supports authorized catastrophe funding obligations, with commissioner-set withdrawal procedures; its references shift to the post-2025 framework on September 1, 2027. TWIA can count trust fund balances as assets in its financial statements. Surcharge collections and interest left after yearly costs can pay later or outstanding obligations, offset later surcharges, or rebuild reserves.
New catastrophe charges on property insurance
The insurance commissioner can order a premium surcharge to repay state financing for the Texas Windstorm Insurance Association (TWIA). It covers fire and allied lines, farm and ranch owners, residential property, and commercial policies' property coverage. The law permits financing before a catastrophe or after one exhausts available funds; catastrophe losses must exceed yearly revenue. Collection lasts no more than three years, and total charges cannot exceed financing repayment and state administrative costs. The charge is nonrefundable, and nonpayment counts as unpaid premium for cancellation. State and local government policies are exempt; the charge carries no premium tax, commissions, or state or local taxes. Insurers must prominently explain the charge and its nonrefundable nature in policy documents. TWIA cannot apply the specified insurance credit against these financing surcharges, and Texas cannot impair collections before repayment obligations are satisfied. Non-fronting farm mutual insurers collect the charge without becoming TWIA members.
New funding target for windstorm claims
Beginning September 1, 2025, TWIA must maintain funding equal to its estimated maximum loss for a 1-in-50 catastrophe year. This replaces the 1-in-100 standard. Reinsurance, alternative financing, and other authorized sources can meet the target. The commissioner must provide the approved calculation method by February 1 each year. Beginning September 1, 2027, public securities no longer count, and the reinsurance starting point uses only post-2025 framework funding.
Windstorm borrowing changes preserve older obligations
Beginning January 1, 2026, TWIA cannot issue public securities for new catastrophe-year losses and expenses. The exception covers costs incurred before that date for catastrophe years also before that date. Prior law continues to govern those older costs and related securities, including repayment, refinancing, rights, and limits. On September 1, 2027, the law repeals the old funding and public-securities subchapters and removes public securities from permitted asset uses. TWIA can use assets for authorized insurance and financing duties; upon dissolution, assets return to Texas except those pledged for financing repayment.
Windstorm premiums must reflect financing costs
Beginning September 1, 2025, TWIA must consider financing obligations when setting insurance rates. Beginning September 1, 2027, the rate factor covers financing obligations and included debt service, replacing the public-securities factor. The law sets no specific premium increase.
Lawsuit limits for windstorm financing actions
Covered TWIA members, insurers, board members, employees, and state officials have personal liability protection for financing or surcharge duties. Protection covers the comptroller's financing role and insurers' surcharge collection work. The law also bars civil claims against Texas, the Texas Treasury Safekeeping Trust Company, and covered personnel over specified windstorm investment decisions. Anyone bringing a barred claim must pay the defendant's resulting costs and attorney's fees.
Tighter controls on windstorm insurance finances
TWIA cannot use later-year revenue to cover an earlier catastrophe year's losses or expenses exceeding that year's revenue. This applies to catastrophe years before and after 2026. Beginning September 1, 2025, older-framework assessment proceeds need commissioner approval before counting as catastrophe-year reserves. Inability to meet state-financing or surcharge-related obligations can support commissioner supervision or conservatorship. That control lasts no more than three years; release requires proof TWIA can meet the obligations, subject to further commissioner action.
Sponsors & Cosponsors
Sponsors
Greg Bonnen
House
Todd Hunter
House
Lois Kolkhorst
Republican • Senate
Tom Oliverson
House
Dennis Paul
House
Denise Villalobos
House
Cosponsors
John H. Bucy lll
House
Briscoe Cain
House
Pat Curry
House
Ryan Guillen
House
Erin Gámez
House
Juan "Chuy" Hinojosa
Democratic • Senate
Ann Johnson
House
Terri Leo Wilson
House
Oscar Longoria
House
Janie Lopez
House
AJ Louderback
House
J. M. Lozano
House
Christian Manuel
House
Armando "Mando" Martinez
House
Morgan Meyer
House
Mayes Middleton
Republican • Senate
Mary Ann Perez
House
Mihaela Plesa
House
David Spiller
House
Cody Vasut
House
Roll Call Votes
House vote • 5/28/2025
Record vote
Yes: 114 • No: 20
Senate vote • 5/26/2025
Record vote
Yes: 29 • No: 2
Senate vote • 5/26/2025
Record vote
Yes: 29 • No: 2
Senate vote • 5/26/2025
Record vote
Yes: 29 • No: 2
Senate vote • 5/26/2025
Record vote
Yes: 29 • No: 2
House vote • 5/1/2025
Record vote
Yes: 131 • No: 12
House vote • 4/30/2025
Record vote
Yes: 124 • No: 10
Senate vote • Unknown
Committee vote: Business & Commerce
Yes: 11 • No: 0
House vote • Unknown
Committee vote: Insurance
Yes: 9 • No: 0
Actions Timeline
See remarks for effective date
6/20/2025HouseFiled without the Governor's signature
6/20/2025HouseSent to the Governor
6/2/2025HouseSigned in the Senate
6/1/2025SenateSigned in the House
6/1/2025HouseReported enrolled
5/31/2025HouseHouse concurs in Senate amendment(s)-reported
5/28/2025SenateText of Senate Amendment(s)
5/28/2025HouseStatement(s) of vote recorded in Journal
5/28/2025HouseRecord vote (RV#4003)
5/28/2025HouseHouse concurs in Senate amendment(s)
5/28/2025HouseSenate Amendments Analysis distributed
5/27/2025HouseSenate Amendments distributed
5/27/2025HouseSenate passage as amended reported
5/26/2025HouseRecord vote
5/26/2025SenatePassed
5/26/2025SenateRead 3rd time
5/26/2025SenateRecord vote
5/26/2025SenateThree day rule suspended
5/26/2025SenateRecord vote
5/26/2025SenatePassed to 3rd reading as amended
5/26/2025SenateVote recorded in Journal
5/26/2025SenateAmended
5/26/2025SenateAmendment(s) offered (FA1 Middleton)
5/26/2025SenateRead 2nd time
5/26/2025Senate
Bill Text
Engrossed
Enrolled
House Committee Report
Introduced
Senate Committee Report
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