Senate Bill No. 2571 seeks to amend the funding mechanisms of the Texas Windstorm Insurance Association (TWIA) by introducing a new subchapter, B-2, which will govern the payment of losses and operating expenses incurred after December 31, 2025. The bill stipulates that the existing subchapter B-1 will only apply to losses and expenses incurred before January 1, 2026. It also outlines the conditions for assessments and specifies that payments for losses incurred after the specified date will adhere to the new guidelines established in subchapter B-2. Additionally, the bill mandates that the commissioner of insurance adopt necessary rules to implement these new provisions by December 1, 2025.

The legislation further amends various sections of the Insurance Code related to TWIA, including modifications to the attachment point for reinsurance and the repeal and replacement of Section 2210.602, which introduces new definitions pertinent to TWIA operations. It clarifies the procedures for issuing public securities, stating that the Texas Public Finance Authority will issue Class 1 public securities upon request from the association, and outlines the association's obligations regarding public security payments. The bill also introduces a premium surcharge on policyholders in catastrophe areas as a contingent source of payment for Class 1 public securities if necessary. Most changes are set to take effect on January 1, 2026, with some provisions beginning on September 1, 2026, aiming to enhance the financial stability and operational efficiency of TWIA in response to catastrophic events.

Statutes affected:
Introduced: Insurance Code 2210.071, Insurance Code 2210.0715, Insurance Code 2210.056, Insurance Code 2210.1052, Insurance Code 2210.452, Insurance Code 2210.453, Insurance Code 2210.602, Insurance Code 2210.604, Insurance Code 2210.608, Insurance Code 2210.609, Insurance Code 2210.610, Insurance Code 2210.611, Insurance Code 2210.612, Insurance Code 2210.6132, Insurance Code 2210.614 (Insurance Code 2210)