SB 2530

relating to the Texas Windstorm Insurance Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 2210.014, Insurance Code, is amended by
adding Subsection (d) to read as follows:
(d)  The association is not subject to any insurance premium
tax or insurance maintenance fee or tax.
SECTION 2.  Subchapter A, Chapter 2210, Insurance Code, is
amended by adding Section 2210.016 to read as follows:
Sec. 2210.016.  LEGISLATIVE LOBBYING.  (a)  The association
may not use any money under its control to attempt to influence the
passage or defeat of a legislative measure.
(b)  An association employee or member of the board of
directors who violates Subsection (a) is subject to:
(1)  immediate termination; and
(2)  a fine of $10,000 to be deposited in the
catastrophe reserve trust fund.
(c)  This section does not prohibit an association employee
or member of the board of directors from using money under the
association's control to provide public information or to provide
information responsive to a request for public information.
SECTION 3.  Subchapter B, Chapter 2210, Insurance Code, is
amended by adding Section 2210.063 to read as follows:
Sec. 2210.063.  LOCATION OF ASSOCIATION HEADQUARTERS.  The
headquarters of the association must be located in a first tier
coastal county or a second tier coastal county.
SECTION 4.  Section 2210.072(a), Insurance Code, is amended
(a)  Losses not paid under Section 2210.0715 shall be paid as
provided by this section from the proceeds from Class 1 public
securities issued in accordance with Subchapter M before, on, or
after the date of any occurrence or series of occurrences that
results in insured losses. Public securities described by this
section must be paid within a period not to exceed 14 years, and
shall [may] be paid sooner if the board of directors identifies that
the association has the ability [elects] to do so and the
SECTION 5.  Section 2210.0725(a), Insurance Code, is amended
(a)  Losses in a catastrophe year not paid under Sections
2210.0715 and 2210.072 shall be paid as provided by this section
from Class 1 member assessments in an amount of at least [not to
exceed] $500 million, adjusted annually proportional to the growth
in the association's probable maximum loss, for that catastrophe
SECTION 6.  Section 2210.073(a), Insurance Code, is amended
(a)  Losses not paid under Sections 2210.0715, 2210.072, and
2210.0725 shall be paid as provided by this section from the
proceeds from Class 2 public securities authorized to be issued in
accordance with Subchapter M on or after the date of any occurrence
or series of occurrences that results in insured losses. Public
securities issued under this section must be paid within a period
not to exceed 10 years and shall [may] be paid sooner if the board of
directors identifies that the association has the ability [elects]
to do so and the commissioner approves.
SECTION 7.  Section 2210.074(a), Insurance Code, is amended
(a)  Losses in a catastrophe year not paid under Sections
2210.0715, 2210.072, 2210.0725, and 2210.073 shall be paid as
provided by this section from Class 2 member assessments in an
amount of at least [not to exceed] $250 million, adjusted annually
proportional to the growth in the association's probable maximum
loss, for that catastrophe year.
SECTION 8.  Section 2210.0741(a), Insurance Code, is amended
(a)  Losses not paid under Sections 2210.0715, 2210.072,
2210.0725, 2210.073, and 2210.074 shall be paid as provided by this
section from the proceeds from Class 3 public securities authorized
to be issued in accordance with Subchapter M on or after the date of
any occurrence or series of occurrences that results in insured
losses. Public securities issued under this section must be paid
within a period not to exceed 10 years and shall [may] be paid
sooner if the board of directors identifies that the association
has the ability [elects] to do so and the commissioner approves.
SECTION 9.  Section 2210.0742(a), Insurance Code, is amended
(a)  Losses in a catastrophe year not paid under Sections
2210.0715, 2210.072, 2210.0725, 2210.073, 2210.074, and 2210.0741
shall be paid as provided by this section from Class 3 member
assessments in an amount of at least [not to exceed] $250 million,
adjusted annually proportional to the growth in the association's
probable maximum loss, for that catastrophe year.
SECTION 10.  Section 2210.102, Insurance Code, is amended to
Sec. 2210.102.  COMPOSITION.  (a)  The board of directors is
composed of nine members appointed by the commissioner in
(b)  Three members must be representatives of the insurance
industry who actively write and renew windstorm and hail insurance
in the first tier coastal counties.
(c)  Three members must, as of the date of the appointment,
reside in the first tier coastal counties.  Each of the following
regions must be represented by a member residing in the region and
appointed under this subsection:
(1)  the region consisting of Cameron, Kenedy, Kleberg,
(2)  the region consisting of Aransas, Calhoun, Nueces,
Refugio, and San Patricio Counties; and
(3)  the region consisting of Brazoria, Chambers,
Galveston, Jefferson, and Matagorda Counties and any part of Harris
County designated as a catastrophe area under Section 2210.005.
(c-1)  At least one [One] of the members appointed under
Subsection (c) must be a property and casualty agent who is licensed
under this code and is not a captive agent.
(d)  Three members must reside in an area of this state that
is located outside a first tier coastal county [more than 100 miles
(e)  All members must have demonstrated experience in
insurance, general business, or actuarial principles and the
member's area of expertise, if any, sufficient to make the success
(f)  Repealed by Acts 2023, 88th Leg., R.S., Ch. 530 (H.B.
3311), Sec. 1, eff. September 1, 2023.]
(g)  Members appointed to the board of directors under
Subsections (c) and (d), other than the member appointed under
Subsection (c-1), must represent the general public in the regions
described by those subsections.  A person may not be appointed to
represent the general public under Subsection (c) or (d) if the
(1)  is employed by or participates in the management
of a business entity or other organization:
(A)  operating in the property and casualty
insurance industry in this state;
(B)  receiving money from the association, other
than insurance claim payments; or
(C)  receiving money from association
policyholders with respect to the policyholders' claims;
(2)  owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
(A)  operating in the property and casualty
insurance industry in this state;
(B)  receiving money from the association, other
than insurance claim payments; or
(C)  receiving money from association
policyholders with respect to the policyholders' claims; or
(3)  uses or receives a substantial amount of tangible
goods, services, or money from the association, other than:
(A)  insurance claim payments; or
(B)  compensation or reimbursement authorized by
law for the board members' membership, attendance, or expenses.
(h)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 615 , Sec.
SECTION 11.  Section 2210.105, Insurance Code, is amended by
adding Subsections (h) and (i) to read as follows:
(h)  A meeting to establish the association's probable
maximum loss and the annual rate setting meeting shall be held
in-person at a location within a first tier coastal county.
(i)  A vote by a member of the board of directors at a meeting
described by Subsection (h) shall only count towards the
establishment of the probable maximum loss or the adoption of the
annual rate filing if the vote is cast by a member of the board of
directors in person at the meeting.
SECTION 12.  Subchapter E, Chapter 2210, Insurance Code, is
amended by adding Section 2210.211 to read as follows:
Sec. 2210.211.  LIMITATIONS ON CERTAIN ADJUSTMENTS. The
association may not adjust premiums, fees, or any other costs to
policyholders for inflation without a vote by the board of
SECTION 13.  Sec. 2210.352(a), Insurance Code, is amended to
(a)  Not later than September [August] 15 of each year, the
association shall file with the department a proposed manual rate
for all types and classes of risks written by the association.
SECTION 14.  Section 2210.355(b), Insurance Code, is amended
(b)  In adopting rates under this chapter, the following must
(1)  the past and prospective loss experience within
[and outside] this state of hazards for which insurance is made
available through the plan of operation, if any;
(2)  expenses of operation, including acquisition
(3)  a reasonable margin for profit and contingencies;
(4)  payment of public security obligations issued
under this chapter, including the additional amount of any debt
service coverage determined by the association to be required for
the issuance of marketable public securities; and
(5)  all other relevant factors, within [and outside]
SECTION 15.  Section 2210.453(b), Insurance Code, is amended
(b)  The association shall maintain total available loss
funding in an amount not less than the probable maximum loss for the
association for a catastrophe year with a probability of one in 50
[100]. If necessary, the required funding level shall be achieved
through the purchase of reinsurance or the use of alternative
financing mechanisms, or both, to operate in addition to or in
concert with the trust fund, public securities, financial
instruments, and assessments authorized by this chapter.
SECTION 16.  Subchapter J, Chapter 2210, Insurance Code, is
amended by adding Section 2210.4531 to read as follows:
Sec. 2210.4531.  DETERMINATION OF PROBABLE MAXIMUM LOSS.
(a) The association shall file with the department a proposed
probable maximum loss, subject to Section 2210.453.
(b)  In determining the probable maximum loss, the
(1)  shall, to the extent possible, contract with any
disinterested third parties necessary to execute any catastrophe
models that were executed in the preceding storm season;
(2)  shall, if the association is unable to contract
for the execution of a catastrophe model described by Subdivision
(2), contract with any disinterested third party necessary to
execute a catastrophe model that is substantially similar to the
model for which the association is unable to contract under
(3)  may contract with any disinterested third parties
to execute catastrophe models in addition to the models required
under Subdivisions (1) and (2);
(4)  shall provide to a disinterested third party
executing a catastrophe model any information necessary to comply
(5)  may not use a combination of catastrophe models to
determine the probable maximum loss; and
(6)  may use only the catastrophe model that produces
the lowest probable maximum loss.
(c)  The association shall make any information produced in
compliance with Subsection (b) publicly available on the
association's Internet website.
(d)  The association may only use a probable maximum loss
that is approved by the commissioner. The commissioner may reject a
probable maximum loss filed with the department by the association
and set a probable maximum loss at any amount determined by the
(e)  The amount of loss adjustment expense, as adopted by the
board of directors for a catastrophe year and used for the
association's rate indication for purposes of filing a rate under
this chapter, must be considered above the probable maximum loss.
SECTION 17.  Section 2210.063, Insurance Code, as added by
this Act, applies to the Texas Windstorm Insurance Association
SECTION 18.  Sections 2210.0725(a), 2210.074(a), and
2210.0742(a), as amended by this Act, applies to assessments
beginning January 1, 2026. The amounts of assessments on January 1,
2026 shall be equivalent to the amount of assessments on that date
after adjusted to the growth in the association's probable maximum
loss from January 1, 2021 to January 1, 2026.
SECTION 19.  This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2025.