HB 1940 Becomes Law

A bill that will allow eligible surplus lines insurers to provide windstorm and hail insurance, notwithstanding available coverage through the Texas Windstorm Insurance Association (TWIA), has passed into law in Texas, effective June 14, 2019. Under the law, a diligent effort will still be required, but available TWIA coverage will not limit the amount of insurance that can be procured in the surplus lines market.

HB 1940 easily passed both the Texas House of Representatives and Texas Senate during the 86th legislative session before it was sent to Gov. Greg Abbott on May 24, 2019. Gov. Abbott signed the bill on June 14, 2019, and it became law.

The bill amends Texas Insurance Code, Chapter 981, Section 981.004, related to authorized surplus lines coverage. The bill became effective immediately as it received at least two-thirds votes from members of each legislative chamber and was signed by the Governor on June 14, 2019.

Rep. Eddie Lucio III, sponsor of the bill, has noted that there is confusion in the market as to whether surplus lines insurers may lawfully provide coverage to those in TWIA’s coverage area. With HB 1940’s passage, it is clear that eligible surplus lines insurers may provide insurance to these consumers, without regard to the availability of TWIA coverage. This may expand windstorm and hail insurance coverage in the state and lead to increased options for Texas insureds.