MEETINGS/EDUCATION
The Insurance Council of Texas has opened online registration for the 29th annual ICT/AFACT Property and Casualty Insurance Symposium, set for Sept. 1-2. Plans are underway for the symposium to be held both in-person at the Hyatt Regency Austin and virtually. ICT said the in-person event will be conducted in accordance with the latest state and local health guidelines. The symposium agenda includes five sessions as well as presentation of the annual Raymond Mauk Award. Details of the sessions, which will feature relevant topics and respected industry speakers, will be announced soon. Cost to attend in person or virtually is $400 for members, $450 for nonmembers. ICT has also slated its upcoming 2021 Workers’ Comp Conference for Sept. 23.
INSURANCE LEGISLATION
State Representative Eddie Lucio III, D-Brownsville, filed a bill on Feb. 11 that would require the Texas Windstorm Insurance Association to issue a certificate of compliance with applicable building codes whenever the Texas Department of Insurance determines not to do so. The bill would allow either TDI or TWIA to rescind a certificate of compliance, but only if TDI finds that a modification to the structure does not comply with the building code under TWIA’s plan of operation. The proposed law, if passed, would affect certificates issued on or after Jan. 1, 2022. House Bill 1864 has not yet been scheduled for a public hearing. This is not part of TWIA’s recommendations for legislation.
The only recommendation from TWIA that became proposed legislation is the one to allow policyholders a payment grace period. House Bill 2920 is authored by Rep. J.M. Lozano, R-Portland. The legislation requires the insurance commissioner to adopt rules establishing a 10-day or less grace period after the due date for a policy renewal. It is not expected to draw any opposition.
On March 9, the House Committee on Insurance held its first hearing of the session on legislation and laid out six bills, half without controversy. Bills affecting the safety of amusement rides (HB 205), prohibiting discrimination by life, disability and long term care insurers against living organ donors (HB 317) and peer-to-peer car sharing (HB 113) appear headed for committee passage, either in the introduced form or by substitute. Raising opposition were House Bill 643, which would authorize disclosure of the beneficiary of a life insurance policy to a funeral director; House Bill 573, authorizing regulation by the Department of Insurance over health care sharing ministries; and House Bill 410, which would exempt several medical procedures from health insurers’ preauthorization requirement. On Mar. 16, the committee reported HB 317 favorably as substituted. Other bills remain pending in committee, as of Mar. 17.
On Dec. 17, Sen. Charles Schwertner, R-Georgetown, prefiled Senate Bill 249 which would require that business interruption insurance cover lost income and operating expenses caused by the policyholder being forced to vacate his business due to a pandemic. The bill is prospective, and would become effective Jan.1, 2022 if passed into law. It has been referred to the Business and Commerce Committee, but as of March 17 had not been scheduled for hearing. Sen. Donna Campbell, R-New Braunfels, signed on as a coauthor on Feb. 23. Both authors are physicians and both serve on the Business and Commerce Committee. There is no bill designated as a companion in the House.
Senator Larry Taylor, R-Pearland, filed Senate Bill 1602 on March 11. As filed, the bill would require insurers to cancel a property and casualty insurance policy if the insured fails to or refused to cooperate in an investigation, settlement or defense of a claim. The cancellation would require 10 days’ notice to the insured. There is no bill designated as a companion in the House.
On March 11, Rep. Todd Hunter, R-Corpus Christi, filed HB 3809 to move rate setting authority for the Texas Windstorm Insurance Association entirely to the insurance commissioner. Rates could change only once a year, with rate hearings requested by TWIA at least 60 days in advance. Hunter has appeared at TWIA board meetings in opposition to proposed rate increases for the coastal property insurer.
Texas Professional Insurance Agents support federal legislation to repeal the Federal Insurance Office, joining the National PIA in its position. David Gorman, president of Texas PIA and national director for PIA National said, “Since the Federal Insurance Office was created in 2010, it has continuously tried to increase its duties and expand the role of the federal government in insurance. Texas PIA firmly believes the insurance industry must throw its weight behind repealing the Federal Insurance Office.” The FIO now seeks to administer the National Association of Registered Agents and Brokers (NARAB), an activity outside the FIO’s mandate. Texas PIA members met recently with Senator Ted Cruz during PIA’s annual Advocacy Day. Cruz introduced S. 524, the Federal Insurance Office Abolishment Act, and Texas PIA will continue to build support for the repeal.
PEOPLE
Michelle Broome was honored as the CSR of the Year by the Independent Insurance Agents of Tarrant County. Broome, senior account manager and office manager at RHSB, has been with the agency for over 30 years. She was nominated for the award by several coworkers who said, “Michelle always has a smile on her face, is loved by clients, and does a great job juggling the demands of managing employees in the office while also handling a book of business. She has especially shined during COVID. Michelle goes above and beyond for her clients and the RHSB team.” Her nomination noted that she is responsive, friendly and patient as she makes sure all coverage terms are understood by insureds. Broome’s award was presented by IIATC President Wes Edison, Boyd, Shackelford, Barnett and Dixon. Other nominees recognized at the Feb. 9 CSR Appreciation Luncheon were Courtney Moore, Elevate Protection Group, and Debi Krupa, Texas Insurance Group. QuestPro and The Parks Group sponsored the awards for the luncheon.
NAIC
The National Association of Insurance Commissioners released its 2014-2018 Auto Insurance Database Report in February. Key findings from the report include: Liability premiums grew 30 percent from 2014 to 2018, while the number of vehicles insured for the same period grew seven percent; the national average annual expense per insured vehicle was $1,190 in 2018, a 20.81 percent increase from 2014; countrywide total liability losses incurred in 2017 were $96.4 billion, a 6.3 percent increase from 2015. In Texas, the combined average premium was $1,372 in 2018, a 28.7 percent increase from 2014. The entire 255-page report can be downloaded at www.naic.org.
The NAIC’s Spring National Meeting will be hosted in a virtual format on April 7-9 and April 12-14. The registration fee of $495 includes access to the meeting’s events app, which in turn gives access to meeting recordings and summaries, as well as meeting minutes 10 days following the conclusion of the national meeting. Online registration is available.
On March 2, the NAIC announced the availability of its 2020 Market Share Data on life/fraternal and property/casualty insurers. The reports provide market share information and identify leading insurance writers in several key lines of business. The numbers in the reports will increase throughout the month as the reports run. The 2020 market share data include countrywide direct written premiums for the top 25 groups and companies, as reported on the state page of the annual financial statement for insurers that report to the NAIC. The P/C Market Share report contains cumulative data for personal auto, commercial auto, workers’ comp, medical professional liability, homeowners and other liability (excluding auto). As of March 1, 69.47 percent of property/ casualty insurers’ data was included. Reports will be refreshed weekly throughout March, with the full data complete by summer.
MERGERS/ACQUISITIONS
On March 5, Charlotte, North Carolina-headquartered Amwins Group announced that it has agreed to acquire Worldwide Facilities, the fourth largest wholesale broker in the U.S. Worldwide broadens the specialty capabilities of Amwins and expands its footprint, especially on the west coast. “The acquisition of Worldwide is a watershed moment not just for Amwins, but the specialty distribution space,” said Scott M. Purviance, CEO of Amwins. “Since the beginning, we’ve believed that scale and specialization are key to delivering for our clients. Over the last 19 years, we’ve been able to build an organization that stands out amongst the competition. With the addition of Worldwide to the Amwins family we are partnering with a very talented group of brokers and underwriters. Worldwide has a very similar culture to Amwins and has a significant employee ownership base. The combined firm will have over 1,025 employee shareholders owning 43 percent of the business.” Expected to close in April 2021, this transaction will reinforce the position of Amwins as the industry’s largest and most diversified specialty distribution firm. Worldwide clients can expect a continued high level of service, with access to a broader range of markets, products and tools. The Worldwide team, led by Davis Moore, will join the Amwins leadership team. The acquisition adds to the track record of Amwins, which previously acquired 50 companies. The combined firm will have more than 6,151 employees in over 155 offices across the U.S., and place in excess of $24 billion in premium annually. “We are excited to join the Amwins family and the opportunities this partnership offers,” said Moore, CEO of Worldwide. “Our organizations complement each other very well from a culture and business philosophy perspective. Together, we can use our scale to continue to invest in people, technology, product and tools to deliver specialized solutions to our retail clients.” Terms of the transaction were not disclosed.
RATINGS
On Feb. 25, LUBA Workers’ Comp, a 30-year old regional casualty insurance company, announced that it has received an A-(Excellent) rating with a stable outlook from AM Best for the 17th consecutive year. LUBA, a Baton Rouge-based insurer, has been operating in seven states, including Texas; its recent acquisition of Florida-based FHM Insurance Company brings the insurer into six additional states. “We are proud that this rating reflects our sound business practices and dedication to delivering genuine dependability to the agents we work with and the employers we serve,” said David Bondy, LUBA founder and CEO. “This has been a tough year for many business, and we’ve always taken seriously the trust they put in us.”
SLTX
The Surplus Lines Stamping Office of Texas reported record premium volume in January and February for 2021, compared with these monthly results for all prior years. January premium was $613.58 million, up 13.6 percent over 2020’s first month. February’s recorded premium was $509.48 million, a 1.3 percent increase over last year, bringing the two month premium growth over last year’s to 7.7 percent. Stamping fee income in January was similar to last year’s; however, reduced stamping fee collections started in earnest with February’s filings, a result of the fee reduction effective on coverages written as of Jan. 1, 2021. By the end of February, stamping fee income for 2021 was about $1.3 million, or 15.5 percent less than the end of the first two months of 2020. Policy count through February stood at 95,642, a 13.3 percent decrease compared with last year’s first two months.
On Feb. 25, SLTX posted on its website the 2020 premium and market share by premium of the top brokers in Texas. Subsequently, SLTX limited its infographic to each of the top 10 brokers’ percent of total Texas premium. The Top 10 brokers reported slightly more than half of the total surplus lines premium. All others reported 49.91 percent of all premium to SLTX. The Top 10 lines of coverage reported 86.02 percent of all surplus lines premium, with the top three lines being Property-Fire/Allied Lines, 33.24 percent; Excess/Umbrella, 17.42 percent and GL-Premises Liability Commercial, 13.87 percent. Underwriters at Lloyd’s London ranked as the top surplus lines insurer, with 22.48 percent of 2020’s premium. The Top 10 insurers accounted for 45.02 percent of all Texas surplus lines premium. A fourth infographic tracked Texas surplus lines annual average premium growth since 1988 at 15 percent, despite a negligible growth rate from 1992 to 2000. The steepest premium growth rate occurred between 2016 and 2020, when reported surplus lines premium grew from $5.123 billion to $7.923 billion.
TDI
The Texas Department of Insurance issued a data call on Feb. 28 to property insurers, including farm mutual and surplus lines insurers for information related to winter storm claims. Insurers must submit data to the Insurance Services Office Inc. (ISO), TDI’s statistical agent, on forms provided in TDI Bulletin B-0009-21. The first report covering all claims for the losses occurring Feb. 11-19 known by Feb. 28 is due March 31, with monthly reporting thereafter. All insurers will report claims occurring by zip code, with admitted insurers required to separately report residential property claims by ACV or RCV. Surplus lines companies, both foreign and alien, are required to report; however, TDI’s Catastrophe Event Statistical Plan permits nonadmitted companies to designate an MGA or agent, or contract with a third party to provide the required statistical data on its behalf. The insurer remains responsible for ensuring that the data submitted is complete and provided on time. Admitted and surplus lines insurers subject to the data call are listed on documents attached by hyperlink to the bulletin, as insurers whose direct written premium fall below a certain threshold are exempt from the data call.
On March 9, TDI issued Bulletin B-0010-21 directed to all regulated entities to provide guidelines for reasonable care in adjusting claims for losses caused by the severe winter weather of Feb. 11-19. TDI “expects insurers to consider the severity and unprecedented nature” of the weather event when adjusting claims for frozen pipes and communicating with policyholders. In particular, TDI cautions insurers about determining “whether a policyholder took reasonable actions to prevent loss,” and cites penalty provisions in the Insurance Code for “unfair claim settlement practices…(including) failing in good faith to effectuate a prompt, fair and equitable settlement.” TDI includes a non-exhaustive list of situations where policyholders may not have been able to prevent losses under the catastrophic weather circumstances.
TDI’s rule acknowledging the fee change for the Motor Vehicle Crime Prevention Authority from $2 to $4 per automobile policy was formally adopted on March 12. The fee which changed by law in 2019 funds not only the Motor Vehicle Crime Prevention Authority, but also criminal justice functions and trauma care facilities. Insurers can recoup all or part of the fee from policyholders. The rule also changes the name of the crime-prevention agency from Automobile Burglary and Theft Prevention Authority in conformity to the 2019 change in law. The new fee became effective by law on Sept. 1, 2019. This rule provides a model disclosure statement that insurers can use with their policyholders if they pass the cost, in whole or in part, to them.
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