An insurers' organization said it will lobby in three states next week to secure a revision of the funding mechanism for the woefully-depleted Texas Windstorm Insurance Association.
The Property Casualty Insurers Association of America's Southwest Region will be focusing on the Arkansas, Texas and Oklahoma legislatures when they convene for new sessions, the group said.
"TWIA is considerably underfunded, and as long as we maintain the current funding mechanism, ultimately the state's financial future is at risk," said Joel Woods, PCI's assistant vice president and regional manager.
He added that PCI lobbyists will be urging "that Texas learns the lesson from the state-run property insurers in Florida, Louisiana and Mississippi, which were not able to address their funding issues prior to Hurricanes Katrina and Rita and are now operating with massive deficits."
Mr. Woods said that TWIA has $1 billion in funding, "but that pales in comparison to the potential losses that could be caused by a major storm or multiple storms hitting the Texas coast."
"PCI will support efforts to establish new funding mechanisms but will oppose expanding funding that includes cross-line subsidies," he added.
Automobile insurance issues will also be a priority in the region, Mr. Wood said, with PCI lobbyists anticipating that they will be involved with workers' compensation and insurers' rating techniques in the three states.
In Texas the major insurance reforms of 2003 had the goal of placing all insurers under the same rating and underwriting rules, PCI officials said.
However, there were a few exceptions such as the one that only allows county mutuals to use moving violations for automobile insurance ratings purposes. Mr. Woods said that PCI favors having all insurers operate under the same rules and will pursue legislation to level the regulatory playing field for all insurers on this rating issue.
In Oklahoma uninsured motorist issues will be examined in the upcoming legislative session, Mr. Woods said. PCI will support legislation that streamlines the forms for the selection or rejection of uninsured/underinsured motorist coverage.
As legislators examine strategies to reduce the number of uninsured motorists, PCI will seek to ensure that the measures will be effective and won't place unnecessary or costly requirements upon insurers, he said.
Legislative sessions are scheduled to begin Monday in Arkansas, Tuesday in Texas and in Oklahoma on Feb. 5.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.