The Texas Senate passed committee substitute Senate Bill 2530 on May 1, a bill aimed at reforming the Texas Windstorm Insurance Association’s (TWIA) governance and funding model. Senator Middleton, the sponsor, said the measure ties statutory assessment limits to percentage growth in TWIA’s probable maximum loss (PML) and lowers the statutory minimum funding design standard from a 1-in-100-year PML to a 1-in-50-year PML to reduce the association’s reliance on expensive reinsurance.

Middleton told colleagues that TWIA is the insurer of last resort for 14 coastal counties and that he had asked TWIA to model how alternate funding standards would have performed after Hurricane Harvey. He said TWIA’s cash reserve trust fund (CRTF) would have been roughly $1 billion with a 1-in-50 PML standard, compared with $4 million in the current account, illustrating the sponsor’s argument that the existing structure is unsustainable. He also noted that reinsurance costs have become a far larger share of coastal premiums, increasing from roughly 20% to about 60% of premium costs, and that the bill’s funding changes would moderate that exposure.

Floor amendments removed a provision that created a fiscal note and added at least one requirement that at least one coastal board member be an active independent insurance agent. The bill passed the Senate by a 31-0 vote.

Senate action: suspension of regular order; adoption of two floor amendments (removal of a fiscal-note provision and an independent-agent board-member requirement); passage to engrossment and final passage. Final vote: 31 ayes, 0 nays.

Supporters said the measures would align TWIA’s assessments with drivers of exposure and reduce the need for additional reinsurance purchases; opponents in prior hearings had warned about potential market impacts and coastal homeowner protections. The bill proceeds to the other chamber for consideration.