H.B. No. 3689 seeks to improve the financial framework of the Texas Windstorm Insurance Association (TWIA) by replacing the existing Subchapter B-1 with a new Subchapter B-2. This new subchapter establishes guidelines for financing arrangements and assessments to manage excess losses and operating expenses incurred after December 31, 2025. The bill emphasizes that public securities are not a sustainable long-term solution and allows the state to provide financing or investment of up to $1 billion following catastrophic events, secured through statewide catastrophe surcharges on certain insurance policies. Key definitions are introduced to clarify the financial responsibilities of TWIA, and the bill ensures that payments for losses incurred after the specified date will be governed by the new framework, while those incurred before will remain under the existing law.

Additionally, the bill outlines the parameters for financing arrangements, including a maximum of $500 million before a catastrophic event and up to $1 billion afterward, contingent on the depletion of the catastrophe reserve trust fund. It specifies that financing arrangements will be repaid solely from revenue generated under the new subchapter and will not create a debt obligation for the state. The legislation also mandates the commissioner to provide an annual financial report on the catastrophe reserve trust fund and allows for premium discounts based on property improvements. Effective September 1, 2027, the bill repeals certain existing provisions of the Insurance Code and introduces new rules for the use of TWIA's assets, ensuring the association can maintain adequate funding levels and operational efficiency in managing risks associated with natural disasters.

Statutes affected:
Introduced: Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.075, Insurance Code 2210.452, Insurance Code 2210.4521, Insurance Code 2210.453, Insurance Code 2210.601, Insurance Code 2210.0081, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.355, Insurance Code 2210.363 (Insurance Code 2210)
House Committee Report: Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.075, Insurance Code 2210.452, Insurance Code 2210.4521, Insurance Code 2210.453, Insurance Code 2210.601, Insurance Code 2210.0081, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.355, Insurance Code 2210.363 (Insurance Code 2210)
Engrossed: Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.075, Insurance Code 2210.452, Insurance Code 2210.4521, Insurance Code 2210.453, Insurance Code 2210.601, Insurance Code 2210.0081, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.355, Insurance Code 2210.363 (Insurance Code 2210)
Senate Committee Report: Insurance Code 2210.003, Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.075, Insurance Code 2210.452, Insurance Code 2210.4521, Insurance Code 2210.453, Insurance Code 2210.601, Insurance Code 2210.0081, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.355, Insurance Code 2210.363 (Insurance Code 2210)
Enrolled: Insurance Code 2210.003, Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.075, Insurance Code 2210.452, Insurance Code 2210.4521, Insurance Code 2210.453, Insurance Code 2210.601, Insurance Code 2210.0081, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.355, Insurance Code 2210.363 (Insurance Code 2210)