Weston Property & Casualty Insurance Company

TEXAS DEPOPULATION EXPLAINED

The Texas Windstorm Insurance Association (TWIA) has two programs in place to encourage TWIA policyholders to move their windstorm coverage to the private market or "depopulate" their policy from TWIA. TWIA's two depopulation programs are the Assumption Reinsurance Depopulation Program and the Voluntary Market Depopulation Program. Weston is participating in both of these programs and has put together the information below to assist policyholders in understanding the processes and learn about Weston. We also encourage you to click on the Home, About Us, Products, Questions and Resources tabs above where you'll find more information about Weston. And please do not hesitate to contact us using the contact information on the Home tab above if you have further questions about Weston or the depopulation process.

THE ASSUMPTION REINSURANCE PROGRAM

Why Depopulation?

As the state affiliated windstorm "insurer of last resort," TWIA is designed to only offer windstorm coverage when a policyholder cannot find coverage with an admitted, private market insurance company. TWIA's depopulation efforts are centered on assisting policyholders with finding private market options for their windstorm insurance needs.

How does Assumption Reinsurance Depopulation work?

The initial goal of the process is for a private market insurance company to "step into the shoes" of TWIA on a fixed date and become the responsible insurer on a group of TWIA policies selected by the private company. That process of the private company becoming responsible for the selected group of TWIA policies is commonly referred to as an "assumption" of those policies. Then as each of the TWIA policies assumed by the private market company reach their regular renewal date, the private market company (instead of TWIA) directly generates the renewal policy, which completes the move of the policyholder to the private market carrier and is the ultimate goal of the process.

If my TWIA policy is selected for assumption, do I have a choice as to whether to stay with TWIA as my insurance company?

Yes. Each selected TWIA policyholder will be notified prior to the assumption of their policy and they will have a six (6) month period to elect to opt out of the assumption. If a selected TWIA policyholder opts out of the assumption, they will remain with TWIA. If a selected TWIA policyholder does not opt out of the assumption during that period, then their policy will be assumed by the private company.

What role does my agent play in the assumption?

Your agent will remain your agent throughout the process regardless of whether you elect to opt out of the assumption or not. Private insurance companies cannot make an offer of assumption to a TWIA policyholder unless the private company first has an agency appointment agreement in place with the policyholder's agent. Once the private insurance companies participating in the assumption process select the list of TWIA policies they want to assume, each agent will be given access to a list of the selected policies the agent represents. If your policy is on one of the private company's lists, your agent will determine whether to allow the private company to make an offer of assumption to you. If your policy is on more than one private company's list, your agent will select which company, if any, may make an assumption offer to you.

The above information covers "Assumption" but what is the "Reinsurance" part of this depopulation program?

During the six (6) month period that selected policyholders have to opt out of the assumption (December 1 - May 31), the private companies will enter into a reinsurance agreement with TWIA whereby each private company reinsures TWIA 100% for the policies they selected. This transaction will have no direct effect on the selected policyholders because during this period TWIA remains the insurance company responsible for each policyholder's windstorm coverage, and TWIA will continue to provide all policy administration and claims services during this period. For any policyholder that elects to opt out of the assumption, their policy will be retroactively removed from this reinsurance agreement back to the beginning of the six (6) month period.

Once my policy is assumed, who is responsible for servicing my policy?

During the period after your TWIA policy is assumed (starting June 1) but before the private company issues you one of their policies, the private carrier will be responsible for handling all claims on your policy while TWIA will continue to handle your policy administration (e.g. processing any updates or changes you need to make to your coverage and accepting premium payments). Once the private company issues you one of their policies, the private company will then be responsible for servicing all aspects of your policy including both policy administration and claim handling.

What are the key dates in the Assumption Reinsurance Depopulation Program?

The following is a timeline of how the Assumption Reinsurance Depopulation Program described above will be implemented for the assumption schedule to be effective on June 1, 2017. Although TWIA will be implementing this program in 2018 and beyond, the dates of each key event below may change in those future years:

August 25:

Deadline for private companies to submit their lists of selected policies to TWIA.

September 1:

TWIA will make private company policy selection lists available electronically for review by the agent of record for each policy.

October 31:

Deadline for agents to approve assumption offers in the TWIA online portal.

December 1:

Beginning of the six (6) month period for policyholders to opt out of the assumption. Both TWIA and the private companies will send notices to policyholders advising them their policies have been selected for assumption and of their right to opt out of it. This is also the effective date of the 100% reinsurance agreements between the private companies and TWIA regarding the policies the private companies selected for assumption and which were approved for assumption by the agents of record.

May 31:

End of the six (6) month period for policyholders to opt out of the assumption.

June 1:

This is the effective date of the assumption. The TWIA policy of any selected policyholder that did not opt out of the assumption will be assumed by the private market carrier on this date. The private market carrier will issue each such TWIA policyholder a Certificate of Assumption and Novation to be attached to the policyholder's TWIA policy documenting that the private market carrier is the insurance company responsible for the coverage provided thereunder as of this date. The private company will become responsible for handling all claims on the policy on and after this date. TWIA will continue to provide policy administration until the private carrier issues the policyholder one of the private company's policies.

July 31:

This is the last policy effective date that TWIA will renew assumed policies on TWIA policy forms.

August 1:

This is the first policy effective date that assumed policies will be renewed directly on to the assuming private company's policy forms. This is the first policy effective date that assumed policies will be renewed directly on to the assuming private company's policy forms.

THE VOLUNTARY MARKET PROGRAM

Why Depopulation?

How does Voluntary Market Depopulation work?

Private market carriers identify properties insured by TWIA they would like to insure and make coverage offers to the TWIA policyholders for those properties prior to the natural renewal date of their TWIA policies. The goal of this program is for the TWIA policyholders who receive an offer of coverage to move their insurance coverage to the private market carrier when their current TWIA policy expires rather than renewing their policy with TWIA.

If I receive an offer of coverage from Weston, do I have a choice as to whether to stay with TWIA as my insurance company?

Yes. Every TWIA policyholder who receives an offer of coverage under this program controls the decision as to whether to accept the offer and move their insurance coverage to the private market carrier or remain with TWIA.

What role does my agent play in the process?

Private market carriers must send all offers of coverage to the agent of record for each policyholder and offer the agent an appointment with the carrier if there is not already one in place with the agent. The agent of record then passes the coverage offers along their policyholder clients and consults with them on the decision between accepting the offer of coverage or remaining with TWIA. Policyholders always retain the right to choose their agent.

WHY CHOOSE WESTON

Please review the information below and also download our "Why Choose Weston Insurance" flyer to see the reasons why we think Weston is the best insurance company for your windstorm insurance needs:

Coverage

Weston's coverage forms are based on TWIA's so you can expect essentially the same coverage going forward. As a private company, Weston can also offer coverages and limits TWIA cannot offer. You can find coverage comparison charts describing the differences between Weston's and TWIA's coverages at the following links: Commercial Lines Comparison and Personal Lines Comparison.

Price

Weston's rates are up to 5% lower than TWIA's, with the exception of policies including the endorsement for extension of coverage option C (wind driven rain). Weston's premium for this latter group matches that of TWIA. And if you choose Weston to be your windstorm insurance company instead of TWIA, you will no longer be subject to the majority of TWIA’s potential post-hurricane surcharges that may be levied on all TWIA policyholders in the event TWIA’s first levels of funding are not sufficient to pay all of its claims.

Security

With $1.1 billion in aggregate claims paying resources and financial strength ratings from Demotech, Weston is one of the most financially secure options available in the market. Weston is one of the largest purchasers of reinsurance in North America, and purchases protection beyond the 1-in-188 year loss occurrence, well beyond regulatory and rating agency requirements. Weston is a member of the guaranty association of every state in which it is licensed, including Texas.

Consistency

As an admitted carrier, Weston offers agents and policyholders consistency of coverage, rates and rate rules from renewal to renewal, in sharp contrast to the often wide fluctuations in the Excess and Surplus lines market. Since inception, Weston has sought to match or have lower rates than those of the state's residual market, and has never taken a rate increase greater than that taken by the state's residual market. Since inception, Weston has not cancelled a single policy it has assumed or written for any reason, other than non-payment of premium. Unlike most other carriers, Weston does not engage in "catch and release" nor periodically re-evaluate its exposure in an effort to selectively adjust exposure through non-renewals. Rather, once a policy becomes part of Weston's portfolio, Weston is committed to maintaining it and adjusting to exposure fluctuations through the selection of new risks added to its portfolio of business.

Service

Weston's mission is to "pay claims, fairly and timely." We realize you buy our insurance for responsive claims service if and when you have a claim. Weston has 400 dedicated field adjusters that will be on the ground as soon as safely possible after a storm to assist our policyholders with their claims. Those field resources supplement over 200 in-office staff members Weston and its third party claim administrator, North American Risk Services, employ to respond to policyholders' claims. Weston also maintains a mobile claim office with self-contained satellite data and phone capabilities, supported by generator power, deployed to the hardest hit areas after a storm.

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