Texas Governor Perry Signs UTMB Funding and TWIA Reform Bill

House Bill 4586 includes $150 million in funding for the University of Texas Medical Branch (UTMB) in Galveston and reforms the Texas Windstorm Insurance Association (TWIA)

University of Texas Medical Branch faculty, residents and students stood and cheered as Gov. Rick Perry signed a bill giving the institution $150 million in recovery funds.
Perry traveled to the island to sign the legislation in Levin Hall, flanked by University of Texas System regents, island legislators and local officials.

HB 4586 secures more than $425 million dollars for disaster-related costs and expenditures, including $62 million in first-time funding for the state’s disaster contingency fund, $150 million for UTMB to recovery from Ike, and additional funding to help the recovery of communities affected by Ike.

Funding for UTMB includes repairing educational, research, hospital and clinic space, and permitting their Trauma Center to reopen this summer at Level Three status, and eventually back to Level One in early 2010.
Perry also signed HB 51 authorizing the issuance of $150 million in tuition revenue bonds for Hurricane Ike recovery at UTMB. The school will use these funds to build a new 200 bed hospital tower adjacent to the existing John Sealy Hospital, restoring bed capacity to 550, as it was prior to Hurricane Ike. These funds will be matched by a $200 million contribution from the Sealy Smith Foundation.
Between the 81st Texas Legislature's appropriations and other funding made possible by the legislature's actions, the University of Texas Medical Branch (UTMB) will have $1.4 billion for restoration and expansion of facilities.
- This is great news for Galveston Island and also The Emerald By The Sea high-rise that overlooks the beach and UTMB.

The governor also signed HB 4409 today which enacts necessary reforms to TWIA that will ultimately reduce the burden of catastrophic storms on the state and eventually establish TWIA as an insurer of last resort.

House Bill 4409 eases previous funding restrictions on TWIA by allowing coverage of up to $2.5 billion in losses through various funding methods. Damage payments can now be funded by premiums, reserves, public securities, commercial paper and other market source financial instruments.
The bill also requires the Texas Department of Insurance to maintain a list of insurers who voluntarily write windstorm coverage, and develop incentives for insurers to voluntarily write coverage along the coast.
This provision will assist consumers in searching for other providers with the goal of shifting the coverage burden away from TWIA, ultimately establishing it as an insurer of last resort as originally intended.

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By Gov. Perry Press Release @ Tuesday, June 23, 2009

Gov. Perry Signs Bill to Reform Texas Windstorm Insurance Association
HB 4409 reduces state’s burden caused by severe storms, establishes TWIA as insurer of last resort

House Bill (HB) 4409 which enacts necessary reforms to the Texas Windstorm Insurance Association (TWIA) that will ultimately reduce the burden of catastrophic storms on the state and eventually establish TWIA as an insurer of last resort. The governor declared provisions of the bill emergency items for the 81st Legislative Session.

“This legislation addresses a number of issues that have made it tough for insurance companies to remain engaged along the Texas coast, making it difficult for citizens to get the windstorm coverage they need and exerting upward pressure on insurance premiums across the state,” said Gov. Perry.

“To me, this bill represents progress, incorporating sound business practices to improve the way we handle a critical issue that affects all Texans.”

HB 4409 eases previous funding restrictions on TWIA by allowing coverage of up to $2.5 billion in losses through various funding methods. Damage payments can now be funded by premiums, reserves, public securities, commercial paper and other market source financial instruments.

The legislation also allows TWIA to set variable rates among different rating territories taking into consideration the diverse impact a storm may have on any given area based on factors like proximity to the coast and computer modeling of risk factors. Moving away from a one-size-fits-all pricing approach and allowing rates to reflect risk moves TWIA toward compliance with sound insurance principles.

In addition, the bill requires the Texas Department of Insurance to maintain a list of insurers who voluntarily write windstorm coverage and develop incentives for insurers to voluntarily write coverage along the coast. This provision will assist consumers in searching for other providers before TWIA, with the goal of shifting the coverage burden away from the association and ultimately establishing TWIA as an insurer of last resort, as originally intended.

Provisions establish a legislative oversight board and require a review by the Sunset Commission in 2015. Increased public input is now required on TWIA’s board of directors, increasing the number of public members from two to four and decreasing the number of insurer representatives from five to four.

For more information about the 81st Legislative Session, please visit http://www.legis.state.tx.us/Home.aspx

By NANCY RUIZ MyFox Houston @ Tuesday, June 23, 2009

Gov. Rick Perry signed a bill Tuesday he said would encourage insurance companies to provide coverage along the Gulf coast and increase residents' accessibility to windstorm insurance.

House Bill 4409 eases previous funding restrictions on the Texas Windstorm Insurance Association by allowing coverage of up to $2.5 billion in losses through various funding methods, including premiums, reserves, public securities, commercial paper and other market source financial instruments, according to a statement issued by the governor's office.

The bill also allows the association to establish variable rates based on the location of the customer and the effect that a storm may cause to their property, according to the statement.

“This legislation addresses a number of issues that have made it tough for insurance companies to remain engaged along the Texas coast, making it difficult for citizens to get the windstorm coverage they need and exerting upward pressure on insurance premiums across the state,” Perry said in the statement.

“To me, this bill represents progress, incorporating sound business practices to improve the way we handle a critical issue that affects all Texans.”

The legislation also includes incentives to insurers that voluntarily issue policies to coastal residents, according to the statement.

By Statement by Gov. Perry on Special Session @ Thursday, July 02, 2009

“I am pleased that lawmakers passed legislation to continue the Texas Department of Transportation, Texas Department of Insurance and three other state agencies, and authorized the issuance of $2 billion in transportation bonds that were approved by Texas voters in 2007.

“With more than 1,000 people moving to Texas each day and a growing economy, improving transportation in our state continues to be a top priority of mine. I had hoped to reduce uncertainty regarding several major transportation projects across the state by extending the comprehensive development agreement authority for local and state transportation agencies. Although the CDA bill did not pass, we will continue to work with legislators and local officials to find transportation solutions for our state.”

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