The Texas Windstorm Insurance Association Board of Directors met on August 31 for an interim meeting regarding the insolvency of Weston Insurance and the Association’s preparations for Weston policyholders seeking TWIA coverage.
At the meeting, the Board received an update from staff regarding the potential number of Weston policyholders who may be seeking TWIA coverage with a breakdown of the number of impacted properties by county and policy type. Staff also provided the changes to Association application and payment processes to help impacted Weston policyholders more easily obtain windstorm coverage.
“It is the peak of hurricane season,” noted Jessica Crass, compliance specialist with TWIA. “And with these receivership and liquidation proceedings, we know there is a lot of uncertainty around the timing of when folks will receive their unearned premium refund.”
Of the 30,000 policyholders, about 23,000 are located within the TWIA “designated catastrophe area,” Crass said, which runs along the Gulf of Mexico coastline south of Houston. The remaining 7,000 are located further inland. Approximately 21,000 policyholders are for wind and hail only, she added.
TWIA began meeting daily with the Texas Department of Insurance on Aug. 16, Crass said, to work through issues and provide coverage as soon as possible.
“What was determined was we could initiate a new payment plan … that requires no premium upfront,” Crass explained. “The zero down payment plan, or the Weston receivership payment plan, was, in fact, launched last night and it is currently available in the agent portal. So agents can select that. Of course, it is only available to those Weston policyholders impacted by this cancellation.”
Some TWIA board members had concerns about providing policy coverage on those good faith terms. Theoretically, an ex-Weston policyholder could take out a TWIA policy, pay nothing for 90 days, then drop coverage, board members pointed out. They might even lodge a claim during that time.
“Right now our process would be to handle the claim and to follow our normal process there and issuing any payments as necessary,” Crass said, “and then pursuing payments separately.”
There would be a 15-day period, following the 90 days, before a policy would be canceled. All commissions to insurance agents would be paid on a regular schedule.
“They’ll have coverage from September to Dec. 15 even though you haven’t collected any premium,” said Michael Gerik, TWIA board member. “I assume you’ll cancel it on the 15th [of December]. You’re not going to cancel it back flat to [Sept. 7]. That’s the only way there would be no coverage. So I think we’re on the coverage and we’ll try to collect the premium.”
Weston, which also operates in Mississippi and Louisiana, is the 10th property and casualty company placed into receivership in Florida since 2017 and the sixth since Jan. 1, 2021.
