The Texas Insurance Professionals (PIA Texas) association reported that it has addressed a letter to Texas Gov. Rick Perry in support of the proposal that the state authorize the sale of $800 million in bonds in order to boost the reserves of the Texas Windstorm Insurance Association.
With another active and destructive hurricane season predicted, the windstorm pool, which is the insurer of last resort for windstorm losses along the Texas Gulf Coast, is urging the governor to include the bonds issue on the agenda for the upcoming special session of the Texas Legislature. The special session begins April 17.
Following is the text of the letter sent to Gov. Perry by PIA Texas President Jimmy Beathard and members of the PIA Texas Board of Directors. Copies of the letter were also sent to Texas Insurance Commissioner Mike Geeslin and state Comptroller Carole Keeton Strayhorn.
Dear Governor Perry:
On behalf of the members of Texas Insurance Professionals (PIA Texas), I write in support for Texas lawmakers and officials approving $800 million in bonds to back the severely under funded Texas Windstorm Insurance Association (TWIA). We believe the provision for an optional surcharge only being applied when losses exceed insurance premium reserves for our windpool with the capped annual recoupment set at no higher than 3 percent are equitable terms. PIA also supports adequate and actuarially sound rates to sustain the future of TWIA.
PIA members are local Texas citizens who own and operate professional insurance agencies serving the property and casualty, as well as life and health, insurance needs of their communities and neighbors. On behalf of our insurance customers, PIA members experience everyday the challenge of securing quality insurance coverage and terms for our many residential and commercial property owners along the vast Texas coastline.
The cost of these storms on citizens, communities, states, regions and the federal government grow with each event, as reflected by Texas’ experiences this past 2005. PIA of Texas is actively involved in the PIA National Special Task Force, addressing improved mitigation, preparedness, response, and recovery for areas hit by mega natural disasters. We believe that a part of the future solution to managing relief costs is better and wiser land-use restrictions and mitigation management by governments.
However, depopulation scale-backs or setbacks from already established coastal areas are socially, politically, financially and legally impossible. Ergo, where development has long been permitted and needed by local communities (i.e. tax base), government has an obligation to respond to aid its citizenry.
Texas today can reasonably estimate what its governmental obligation costs for response and recovery may be in a future event. Professional governmental management of that financial exposure is the reason that the state bond process was established and available to governors.
The 2006 hurricane season is fast approaching. PIA Texas asks for your help, in leading your administration officials with the Texas Legislature and approving the $800 million bond request during the April Special session. Support the thousands of Texas citizens and property owners who must and depend on the Texas Windpool as their only source of property coverage for their homes and businesses.
Jimmy C. Beathard
Texas Insurance Professionals/PIA Texas
Source: Texas Insurance Professionals
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