S.B. No. 2571 seeks to amend the funding mechanisms of the Texas Windstorm Insurance Association (TWIA) for managing excess losses and operating expenses related to catastrophic events, specifically distinguishing between incidents occurring before and after January 1, 2026. The bill introduces a new subchapter, B-2, which will govern the handling of excess losses and operating expenses incurred after this date, while those incurred before will continue to be managed under the existing subchapter B-1. Key provisions include the establishment of assessments and the issuance of public securities to fund these losses, with limitations on the use of proceeds and reserves. Additionally, the bill mandates the commissioner of insurance to adopt necessary rules for implementing subchapter B-2 by December 1, 2025, and repeals subchapter B-1 effective September 1, 2026.

The legislation also amends various sections of the Insurance Code related to TWIA's financial operations, particularly concerning public securities and reinsurance. It adjusts the attachment point for reinsurance based on the aggregate funding available under the newly defined subchapters and introduces new definitions relevant to TWIA's operations. The bill modifies the requirements for issuing public securities, requiring a cost-benefit analysis for such requests, and outlines repayment obligations for these securities. Furthermore, it establishes a framework for managing excess revenue collections and investment earnings, allowing surplus funds to be utilized for future obligations or to enhance the catastrophe reserve trust fund. Overall, these amendments aim to improve TWIA's financial stability and operational efficiency in addressing 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)