At its recent December 11th meeting in Corpus Christi, Texas, the Governing Committee of the Texas FAIR Plan Association (TFPA) is reported to have approved an assessment for its insurance company members of over $64 million in relation to a currently estimated $90 million gross loss for the TFPA from Hurricane Harvey and a 2016 year-end and ongoing 2017 operating deficit. As of September 30, 2017, TFPA reported a deficit of approximately $79 million and a net loss for the nine months ended September 30, 2017 of approximately $49 million. The reported December 31, 2016 TFPA deficit was approximately $15 million.
Assessments for each TFPA member insurance company are reported to be based on member participation percentages for the applicable period, 2016 for the December 31, 2016 year-end deficit and 2017 for the September 30, 2017 net loss after Harvey. Assessment bills are reported to be planned for delivery to participating insurance companies by the end of 2017, with payment due 30 days from receipt of the invoices. Under Texas law, TFPA assessments may be recouped by affected insurers through property insurance premium surcharges spread over a three year period.
TFPA’s stated mission is to provide residential property insurance products and services for eligible Texas policyholders when no other insurers are available and is a product of the Texas Legislature’s 1995 mandate to the Texas Commissioner of Insurance to establish the TFPA in order to deliver residential property insurance to Texas residents in areas designated as underserved.
The TFPA is administered by an eleven member Governing Committee. The Governing Committee is composed of five members who represent the interest of insurers, four public members who live in Texas, and two members who are general property and casualty agents. The Texas Commissioner of Insurance or an employee of the Texas Department of Insurance serves as an ex officio member of the Governing Committee.
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