Texas bulks up insurance fund
Lawmakers in Texas have approved plans to replenish a state insurance scheme after Hurricanes Ike and Dolly depleted the fund last year.
The new plan under the Texas Windstorm Insurance Association (TWIA) provides for a $US2.5 billion ($3.1 billion) buffer in the event of a major storm.
Under the new terms, the first $US1 billion ($1.2 billion) in claims will be covered by bonds while the next $US1 billion would be covered by bonds paid on a 70-30 basis by scheme policyholders and a $US300 million ($373 million) levy on state insurers.
A final $US500 million ($623 million) would be covered by another assessment on state insurers with the option to reinsure or finance against those losses.
Hurricane Ike caused between $US10-15 billion ($12-19 billion) in insured losses last year while Hurricane Dolly cost a further $US500 million ($631 million).
TWIA acts as an insurer of last resort to Texas policyholders and is the only property insurer in 14 coastal counties.
The new plan under the Texas Windstorm Insurance Association (TWIA) provides for a $US2.5 billion ($3.1 billion) buffer in the event of a major storm.
Under the new terms, the first $US1 billion ($1.2 billion) in claims will be covered by bonds while the next $US1 billion would be covered by bonds paid on a 70-30 basis by scheme policyholders and a $US300 million ($373 million) levy on state insurers.
A final $US500 million ($623 million) would be covered by another assessment on state insurers with the option to reinsure or finance against those losses.
Hurricane Ike caused between $US10-15 billion ($12-19 billion) in insured losses last year while Hurricane Dolly cost a further $US500 million ($631 million).
TWIA acts as an insurer of last resort to Texas policyholders and is the only property insurer in 14 coastal counties.