The TWIA board should assess the insurance companies under the law to shore up the TWIA trust fund as originally suggested
Last Thursday morning, six coastal legislators met in Chairman Todd Hunter’s office with Texas Insurance Commissioner Eleanor Kitzman and TWIA’s Executive Director. We believe the proposed discussion and any action to place TWIA into receivership is unnecessary and unwarranted.
What the board should do - as has long been advocated by Mike Geeslin, the previous Insurance Commissioner, as well as coastal members of the TWIA board - is assess the insurance companies under the law applicable to insurance policies in effect in September 2008.
In our meeting, and as reflected in TWIA documents, we were advised TWIA had spent approximately $316 million in 2009-2012 premiums to resolve 2008 Hurricane Ike claims. Furthermore, TWIA has set aside an additional $330+ million in reserves from premiums to pay for the currently pending claims. This brings the total probable payout for Ike to $2.7 billion.
In the September 17, 2008 board meeting after Ike, Jim Oliver, the Executive Director of TWIA, noted that with $42 Billion in insured exposure in the six-county area impacted by Ike, at a 10 percent loss ratio, TWIA’s exposure could be $4 billion. Oliver requested an assessment of $830 million to the insurance carriers under the 2008 TWIA statutory funding structure (this statutory structure was changed in 2009 by HB 4009 as discussed below).
Oliver noted that with cash from the trust fund and $1.5 billion in reinsurance, this $830 million assessment would allow TWIA to pay claims up to $2.5 billion. The four coastal representatives on the board voted for the $830 million assessment, but the five insurance industry representatives did not vote for the assessment. The insurance company representatives would only go as high as a $430 million assessment which brought TWIA to a capacity to pay $2.1 billion.
Despite promises to make further assessments at later dates, as discussed below, no further assessment has ever been made! Instead, the TWIA board, even under the oversight by TDI and Commissioner Kitzman, has paid out and reserved more than $600 million in premiums. If the board would simply follow the law in place for these 2008 policies and assess the insurance companies and move the premium money to the trust fund, which currently has $178 million, TWIA would have over $775 million, which is hundreds of millions more than the trust fund has ever had.
At the October 8, 2008 board meeting, it was noted that TWIA expected 90,000 claims and estimated the cost to be $2.7 billion. Ironically, we were advised in our meeting on March 21 of this year that this is the total that TWIA has paid and reserved for all Ike claims. Moreover, Oliver noted that another assessment might not be necessary until the first quarter of 2009. The board agreed to wait to discuss another assessment until the December 2008 meeting.
On November 18, 2008, the head actuary for TWIA responded to an inquiry from State Representative Larry Taylor’s office that the estimated losses were between $2.1 and $2.5 billion and noted the $430 million in assessments and added, “For example, if the ultimate losses from Hurricane Ike are $2.5 billion, we will need to assess an additional $400 million from the last layer of assessments.”
The next meeting of the TWIA board was December 9, 2008, at which time Oliver estimated the losses would be between $2.1 and $2.4 billion, and that another assessment might be necessary the following summer (2009).
Although there is no talk of an assessment on the companies at the March 9, 2009 meeting, it was noted that, “The two hurricanes (Ike and Dolly) depleted the Catastrophe Reserve Trust Fund. . . Unless a change is made in the statute, TWIA will have no funds for hurricane season 2009, except company assessments.” Likewise, there was no talk of assessments during the June 23, 2009 or December 15, 2009 meetings.
The March 9, 2010 meeting had no discussions of assessments. It was noted that $1.4 billion had been spent to date and there is a reference in the audit documents that $2.3 billion is estimated losses. The June 22, 2010 meeting did not reference any assessments and oddly estimated losses at $1.9 billion ($100 million greater than originally anticipated), which is in direct opposition to all of the above including their answers to the audit report in the March 2010 records.
The September 14, 2010 meeting notes that 92,700 claims had been filed and only 40,000 policyholders in the six counties had not filed a claim. It was noted that $1.725 billion had been paid out to date and the estimate was at $2.1 billion for Ike losses. It is also noted that there was a recent settlement of the “slab” cases.
At the December 7, 2010 meeting, it was reported that $1.82 billion had been paid to date and the incurred losses would probably be $2.3 billion “up from the original estimate of $2.1” yet there was no discussion of assessments.
On March 21, 2011 Commissioner Geeslin wrote a letter to TWIA, as the result of a legislative inquiry, specifically, “could the Association use current premium income to pay for Hurricane Ike and Dolly losses?” After analyzing the legislation that was passed in 2009 (HB 4409) the commissioner determined that, without expressly saying it, TWIA should asses the companies.
“As the losses from Hurricane Ike and Dolly are obligations and liabilities that existed prior to the effective date of HB 4409, we believe the funding mechanism for such losses is contained in Chapter 2210 before it was amended by HB 4409 (i.e. assessment of the companies). . . It appears that current premium dollars should not be used to pay claim losses from Hurricane Ike and Dolly.” Pollack wrote a memo to the board raising the issue. No action was taken.
At the June 28, 2011 board meeting, Pollack noted that it was unclear if assessments were necessary. In an audit that was presented to the board, the auditing company noted under the section, “Nature of Business” that, “In the event of a net loss in any policy year prior to January 1, 2009, members participating in that policy year may be assessed for their share of the loss based upon their respective participation percentages.”
Before he left office, Commissioner Geeslin again wrote the TWIA board on August 12, 2011, addressing the assessment issue. He wrote, “Also, of substantial interests are issues related to the resolution of Hurricane Ike losses and funding. These include, but are not limited to, the potential assessment of member companies for 2008 losses, and accounting for 2009-2011 annual premium dollars that have been used to pay Ike claims. How these matters are resolved will have an impact on the level of public trust of TWIA. . . I believe that at the next board meeting, the board should have all available information from counsel and TWIA staff necessary to vote on and resolve these issues.” How prophetic Commissioner Geeslin was 18 months ago as we sit here today!
Commissioner Kitzman took over for Geeslin between the June and September 2011 board meetings. At the September 13, 2011 board meeting, Commissiner Kitzman told the board that she did not think an assessment was needed at that time despite the fact TWIA had paid and reserved more than $200 million out of post Ike premiums, and that the board had sufficient revenue and reinsurance to pay the remaining Hurricane Ike and Dolly claims and that TDI would continue to monitor the situation. It was then noted that TWIA had paid out over $2.0 billion and that reinsurance would be exhausted by the end of the year.
At the December 13, 2011 board meeting it was noted that the reinsurance had been exhausted and that $30 million remained uncollectable due to the Lehman Brothers failure. A memo dated December 31, 2011 raised the estimate of Ike losses to $2.35 Billion along with $305 million in losses from Hurricane Dolly and noted that during a normal non-storm year, approximately $200 million would be put into the trust fund. However, because of the Robstown storm and increasing reserves for Ike, only $82 million would be transferred to the trust fund. No discussion of assessments was mentioned.
A March 31, 2012 “Management Discussion and Analysis” presented at the May 15, 2012 board meeting raised the Ike loss claims estimate to $2.4 Billion. No mention of assessments was presented. Likewise, at the August 12, 2012 board meeting, a lengthy discussion was held with Commissioner Kitzman concerning TWIA funding, including the $174 million in the trust fund and scenarios that could deplete available funding sources. Assessments were never mentioned by anyone. This meeting is in contrast to the meeting just a year earlier where the commissioner said TWIA had sufficient revenue and reinsurance to pay claims.
A memorandum from the TWIA Executive Director John Pollack presented to the board at the December meeting raised the Ike loss estimate from $2.4 billion to $2.53 billion. Assessments were not mentioned.
A review of the available board meeting minutes reveals that the TWIA executive director’s initial estimates that additional assessments were necessary were correct and that nobody ever followed up on Commissioner Geeslin’s directives. It is not too late for the board to take action, assess the member companies, put $600 million in the trust fund, and shore up TWIA’s funding situation which would eliminate the need to even discuss receivership. With $775 million in the trust fund, the legislature could build a substantial financial model for the security of the coast and the State of Texas.
Texas State Representative HD-23
2211 The Strand, Suite 201
Galveston, TX 77550
|CLICK HERE TO VIEW THIS EDITION OF YOUR THOUGHT MATTERS NEWSPAPER|
“The feature of this “Special Edition” of Your Thought Matters Newspaper is the section on the importance of voting in local elections. This “Special Edition” was made possible by Mayor Annise Parker, Mayor Allen Owen, Congressman Kevin Brady, Houston Controller Ronald C. Green, Houston Mayor Pro-Tem Ed Gonzalez, Houston At-Large City CM -Andrew C. Burks, Jr., Missouri City At-Large CM - Danny Nguyen, Houston City CM - Ellen Cohen, Houston City CM – Wanda Adams, Houston City CM – Mike Laster, Houston City CM – Larry V. Green. 2013 Candidate Georgia D. Provost for Houston’s District – D, 2013 Candidate Rodney Griffin for Missouri City’s District – A, 2013 Candidate for Re-Election to the FBISD School Board Jim Rice, and 2013 Candidate for FBISD School Board Cynthia Lenton Gary. Call Aubrey R. Taylor Communications at: (832)212-8735 to discuss your inclusion in the next edition of Your Thought Matters Newspaper." -- Aubrey R. Taylor, Publisher
CITY LEADERS ON THE IMPORTANCE OF VOTING IN LOCAL ELECTIONS
Mayor Annise Parker, Other Houston City Hall Leaders Answer Call to Share Their Thoughts On The Importance of Voting
“Mayor Annise Parker the 61st Mayor of Houston, and only the second woman to hold the position of chief executive officer for the City of Houston recently took a moment to share her thoughts on the importance of voting at the request of Aubrey R. Taylor, publisher of Your Thought Matters Newspaper. Other Houston City Hall leaders who also took the time out of their busy schedules to share their thoughts on the importance of voting in local elections were: Houston’s City Controller Ronald C. Green; Houston’s Mayor Pro-Tem Ed Gonzalez; Houston’s At-Large Position 2 Council Member Andrew C. Burks, Jr.; Houston’s District C Council Member Ellen Cohen; Houston’s District D Council Member Wanda Adams; Houston’s District J Council Member Mike Laster; and Houston’s District K Council Member Larry Green. I’m thankful that these leaders found value in our quest to inform, empower, inspire, and encourage Americans to get involved in local elections. For in the end, all politics are local.”
Mayor Annise Parker, Currently Only the Second Woman to serve as Houston's Chief Executive takes a Moment to Share Her Thoughts on The Importance of Voting
"I remember voting as a kid with my parents. That was back in the days when you walked into a voting booth, pulled a red curtain behind you, picked your candidates and pulled a lever to cast your ballot. My parents took me every November, and I’ve gone every year as an adult. It’s important to vote for many reasons, but I’ll focus on three.
1) It’s the only opportunity we have, as citizens, to hold our elected officials accountable to the promises they make to us when they’re running for office. I’ve been elected eight times now, so I know that when I make a promise on the campaign trail, voters are listening, and voters will remind me of my promises when I come back in two years.
2) Someone said to me recently – if you’re not at the table, you’re on the menu. Elected officials make very important decisions about how your money is spent and what limits are placed on your life. It’s important that your elected officials know that you care about your rights and your money – and the best way to show them that you care is to vote.
3) And finally, 150 years ago, voting was reserved for a privileged few. African Americans and women risked their lives fighting for the right to vote. They won in 1870 and 1920, respectively. That isn’t very long ago, and every election I am proud to honor those brave civil rights activists by heading to the polls and casting a ballot."
|CLICK HERE TO SEE SPOTLIGHT|
Houston City Controller Ronald C. Green Shares His Thoughts on the Importance of Participating in Local Elections
“In times like these it is important that all who can vote should exercise their right to. Not at any moment in our time has our country been so politically polarized, we have gun law bills, budget and deficit issues, the issues that are currently being discussed in Washington have a trickle-down effect to cities and local municipalities. It is important that we have the right leadership in place so that our city is ready to handle those problems. Locally, our economy, public project initiatives and quality of life all depend on the representation YOU the citizen vote for. The City of Houston’s leadership helps in making decisions that make sure that the aforementioned are available to you. That is why it is important for you to participate in local elections. In no other elections, state or nationally, can you personally hold your elected official accountable for the well being of the city that you live in. You want and need responsible men and women to make sure that your taxes are being put to good use, whether you are Republican or Democrat. We need YOU to help Houston thrive as a city, we need YOU to ensure Houston has the quality of life for families and visitors to enjoy and prosper in. Your vote helps in achieving those goals.”
Ronald C. Green
Houston City Controller
|CLICK HERE TO SEE SPOTLIGHT|
City of Houston Mayor Pro-Tem, District H Council Member Ed Gonzalez Shares His Thoughts on Why Voting Matters
“Voting is a fundamental right granted to us by our forefathers, it is a right that sets our nation apart from many in the world, and it is a right that I encourage all citizens to exercise. Elections impact who represents us at every level of government, those representatives are the individuals that advocate for the needs of our communities, of our families, and of our future generations. Electing a representative ensures that your voice is heard at City Hall, at the State Capitol, and in Washington D.C. As a local elected official, I take pride in fighting for the needs of the District H constituents that I represent. Keeping our neighborhoods safe, ensuring that our roads are in good condition, increasing the amount of greenspace in the community, and encouraging economic development are some of my main priorities. I know that I was elected to serve my community and I strive to listen to its needs each and every single day. I sincerely hope that all voters will take time to cast a ballot, particularly during a local election. Our government is only as good as the people that we send to represent us. Make sure that you head to the voting booth and continue to make your voice heard.”
|CLICK HERE TO SEE SPOTLIGHT|
Houston City Council Member Andrew C. Burks Shares His Thoughts On The Importance of Participating In Local Elections
"Exercising your right to vote in local elections gives you a powerful voice in the issues that directly impact our family. When we think about the political decisions that make the greatest differences in our lives, we often think about Washington, D.C. But the truth is that some of the decisions that have the largest impact on us are made at City Hall.
The brave police officers and fire fighters keeping us safe depend upon responsible local elected officials to ensure they are effective. The roads we drive on, the water we drink, and the parks and libraries our families use are all maintained by your local elected officials.
The services we use most are local. That is why it is important to participate in local elections. When you have a concern, it is your locally elected officials who are the most responsive. As members of the community, mayors and council members are more in touch with the everyday needs of our neighbors. As a voter, you want to ensure that the services impacting you the most are in the hands of someone you can trust and who understands your needs.
Your vote makes its biggest difference in local elections. Low turnout in local races means your voice is louder and stronger. Your participation ensures your needs are represented and that our city will remain a great place to call home for generations to come.”
Andrew C. Burks Jr.
City Council At-Large Position 2
|CLICK HERE TO SEE SPOTLIGHT|
Houston City Council District C Representative Ellen Cohen Takes A Moment to Share Her Thoughts On The Importance of Participating in Local Elections
“Democracy is the cornerstone of our country from the federal level down to the local level. I was raised to believe that democracy means “one person, one vote,” and that exercising your vote is a responsibility as well as a right. In a politically polarized nation, making your voice heard from the ballot box becomes even more urgent.
In Houston, though voter turnout in our last national election (2012) was above 60%, unfortunately, in our last localelection (2011) turnout was less than 15%. This is particularly regrettable because all politics is local. Local government is responsible for the most immediate concerns of our citizens’ daily lives. From streets to parks to libraries to water, your local government officials make or influence the policy decisions that impact our lives. Consequently, holding elected officials accountable for their decisions is vital to a well-functioning city, state, or nation.
Furthermore, particularly in a local election, every vote is critical. Elections that are determined by 10, 100, or 500 votes are more common than many citizens are aware. Since a small voting pool magnifies the effect of a singular vote, participating in a local election can have a great impact on your life. Enfranchisement for all has been hard-won in America, and we owe it to our forebears to honor their sacrifices by exercising the right and responsibility to vote.”
Houston City Council District C
|CLICK HERE TO SEE SPOTLIGHT|
Houston City Council Member Wanda Adams Shares Her Thoughts on The Importance of Voting in Our Local Elections
“Many times, local elections do not receive a high voter turnout rate because individuals feel that those elections are not as important as voting for national elected officials. Voting in local elections is actually more important because it is the best way to have your voice heard immediately. Local elected officials are the individuals who carry-out fiscal mandates, laws, and actions that are created on a national and state level. Citizens should see their local officials working in their communities by the projects that are being completed in their neighborhoods. The Mayor and City Council choose city department leaders who make decisions regarding infrastructure repair, water services, health services, solid waste services, libraries, parks, and many other services that affect everyone living in the city. These elected officials are the public servants that you should see physically working in the community and working for the community. They have vested interests that are parallel to their constituents because they drive your streets daily, visit the parks with their loved ones, receive city services, and live in your neighborhoods. Local officials know your concerns because they share them. If someone isn’t voting in local elections, they are saying that they are not concerned with the issues that matter most – the issues that affect home.”
Houston City Council District D
|CLICK HERE TO SEE SPOTLIGHT|
Houston City Council Member Mike Laster Shares his thoughts on the importance of voting in local Elections
“Local elections are important because local government is the foundation of democracy. Your voice is heard the most at the local level and local officials are some of the most accessible and responsive to the voting public. Your daily life is directly affected by local government – from trash pick-up to pot holes to police and fire services to building permits. All of us are called upon to build up our communities and participation in local elections is the most effective way to do that.”
Houston City Council District J
|CLICK HERE TO SEE SPOTLIGHT|
Shared Thoughts from Houston City Council District K Council Member Larry V. Green on Why it's Important for Voters to Participate in Local City-Wide Elections
“It is important for voters to participate in local city-wide elections because elected officials can help determine the economic, educational and social well-being of entire communities. For example, two very important tasks of city council members include making laws and allocating money. Elected officials are the gatekeepers for millions of dollars in tax revenue—that is, money paid by anyone in the public old enough to purchase taxable merchandise, own property, or earn a paycheck. Elected officials control which individuals, groups, communities, businesses, and institutions receive taxpayer dollars, how much they receive, and the purpose for which they can use the money.
Local elected officials are public servants who serve at the pleasure of ordinary citizens—like you and me. For example, in city elections in Houston, every two years voters go to the polls to decide whether their elected officials deserve another term in office. Ultimately, elected officials, including me, are judged by the quality of our leadership. Are we accessible to the public? Do we represent all demographics, rich, poor, everyone? Do we bring money or other resources back to our Districts? Do our decisions or voting record reflect the priorities we promised when asking for your vote?
The policies generated from your participation in local city-wide elections shape almost every aspect of our lives. It is important that voters do not take a back seat in the political decisions that result in these policies. Let your voice be heard by voting in all local city-wide elections.”
Houston City Council District K
|CLICK HERE TO SEE SPOTLIGHT|
-- CLICK HERE FOR OPEN LETTER FROM GEORGIA D. PROVOST
DON'T FORGET TO REMIND EVERYONE YOU KNOW IN FORT BEND COUNTY TO VOTE IN THE SATURDAY, MAY 11TH GENERAL ELECTION
MISSOURI CITY, TEXAS: Watch Out for the Missouri City Council District A Race involving Bobby Marshall, Rodney Griffin and Yolanda Ford on Saturday, May 11, 2013
By Aubrey R. Taylor
President, Aubrey R. Taylor Communications
The Publisher of Your Thought Matters Newspaper
Back in the 2011 General Election face off in Missouri City for the District A City Council seat Rodney Griffin came within 33 votes of unseating the incumbent Bobby Marshall. However, a dismal 6.52% voter turnout in the (6) six precinct district largely made up of African-American voters proved a little too much for Griffin to overcome in his quest to unseat the incumbent. But Rodney L. Griffin is back on the ballot again in the 2013 General Election to be held on Saturday, May 11, 2013. However, he's not facing the incumbent alone this time around. Yolanda Ford, a local architectural designer and urban planner is also in the race seeking to unseat Councilman Bobby Marshall.
-- CLICK HERE FOR MORE INFORMATION ABOUT TRUSTEE JIM RICE
-- CLICK HERE IF YOU CAN VOTE IN THE MISSOURI CITY 2013 ELECTION
-- CHECK OUT THE STATE OF MISSOURI CITY -- BY RODNEY L. GRIFFIN