TWIA’s 2026 reinsurance requirement could decline significantly as Texas eases funding rules

The Texas Windstorm Insurance Association (TWIA) has announced that its required reinsurance for the 2026 wind season could fall significantly to $2.3 billion, after recent legislative changes in Texas halved the state-mandated loss funding requirement.

As we previously reported, Texas House Bill 3689 lowered the coverage standard from a 1-in-100-year storm to a 1-in-50-year event, a change expected to let TWIA scale back its reinsurance and other risk transfer purchases.

For 2025, TWIA’s 1-in-100-year probable maximum loss funding level was set at $6.227 billion, requiring roughly $4.227 billion of reinsurance for the hurricane season.

A new presentation prepared ahead of next week’s TWIA Board meeting shows that the minimum required funding level for 2026 has fallen to $4.5 billion.

As a result, TWIA’s reinsurance requirement for the 2026 season could drop to just $2.3 billion, a 46% reduction in the amount needed to meet its statutory funding obligations at next year’s renewals.

With this in mind, Direct Written Premiums are projected to decrease by $37 million (4.5%), from $818.0 million in 2025 to $781 million in 2026.

Meanwhile, ceded premiums for 2025/26 reinsurance were $416.5 million at the purchase date, while the current placeholder for 2026 is $237 million, meaning TWIA’s reinsurance spend for 2026 could drop by 43% year-on-year.

In the presentation, TWIA also suggested that Policies in force are projected to decrease slightly from the forecast of 282,862 policies at December 31, 2025, to 277,357 at year’s end 2026, a decrease of 5,505 policies.