TWIA's Draft Bill Turns “Shall” Into “May” in § 2210.575(e)

The draft bill on page 17 of TWIA's own committee materials does its work with one word. In Tex. Ins. Code § 2210.575(e), the draft strikes "shall" and inserts "may," so an action against the Association may (rather than must) be presided over by a judge appointed by the judicial panel on multidistrict litigation. ¹ The edit sits in Appendix B of the materials the Legislative & External Affairs Committee worked from on September 1, 2026, and the committee voted to send it to the full Board for the Biennial Report that § 2210.0025 puts on the Legislature's desk by December 31, 2026. ²

Five topics went forward. Three did not.

Secondary home coverage, an E&S lines tax, and a change to minimum required funding died in committee. Multidistrict litigation and tort reform went forward. ²

Dr. Etti Baranoff chairs from a non-seacoast territory seat. John Todd, the industry representative, proposed the secondary-home item. Terrilyn Tarlton Shannon, first-tier coastal, moved to reject it, 2-1. ⁷

Of TWIA's 278,347 residential policies in force on March 31, 2026, 53,620 are secondary homes, roughly $19 billion in exposure, with nearly 60% of those policies in Galveston County (18,178) and Nueces County (12,661). ¹

Aon re-modeled the book without them: the 1-in-50 PML fell 21%, from $4.305 billion to $3.395 billion, and net reinsurance from $197 million to roughly $135 to $140 million. ¹ Written comment ran to roughly 300 submissions, four of them in support: TWIA's notice page counted 295 as of August 31, the Galveston County Daily News 300 Tuesday morning, a gap neither reconciles. ^{10 7}

None of this is final. TWIA's materials say the completed report "will be submitted to the Legislature later this year," once the Board approves the committee's recommendations. ¹ The Board meets October 8, 2026, then November 10, 2026 in Corpus Christi. Section 2210.0025 routes the finished report to the Commissioner of Insurance, two legislative committees and the Sunset Advisory Commission by December 31 of the year before a session, and requires it to state "any proposed changes in the laws relating to regulation of the association and a statement of the reasons for the changes." ¹ The 90th Legislature then has to pass a bill. Earliest realistic effective date on anything the committee moved is September 1, 2027.

What each newsroom added

Seven newsrooms covered or previewed the meeting. KFDM and Fox 4 Beaumont are one Sinclair newsroom running shared copy, so they corroborate once.

The Galveston County Daily News was the only outlet in the room gavel to gavel, and it described the proposal as structured: no new non-owner-occupied policies, then a five-year phase-out. Baranoff: "It needs to be completely voted down and not resurrected." ⁷

Its August 28 preview quoted Todd's June 22 rationale: "If we can reduce our aggregate, that obviously has a significant impact on cost." Garry Kaufman of Galveston Insurance Associates told the paper no private secondary windstorm market exists there.

Chron had the only on-the-record TWIA spokesperson, Aaron Taylor, confirming the item must still clear the Board and the Legislature, plus Galveston broker Stacey Weber-Rubio of Sand 'N Sea Properties and meteorologist Hal Needham. State Rep. Terri Leo Wilson (R-Galveston): "A slow death of this proposal will not be quick enough." ⁸

KFDM and Fox 4 Beaumont broke out the Southeast Texas cluster, 22,632 policies across Galveston, Jefferson and Chambers counties, and pegged the vote to the same-day landfall of Tropical Storm Edouard. Aaron Drawhorn wrote that the committee forwarded "five topics to the full TWIA Board for possible inclusion in its 2026 Biennial Report." ⁹

Hoodline led on the lopsidedness of the public file. The Rio Grande Valley Business Journal alone localized to the lower coast: Cameron County at 3,964 secondary policies, Willacy at 187. Live Insurance News tied eligibility to Galveston's rental economy, about 4,500 short-term rentals and $12.4 million in 2024 hotel occupancy taxes, and quoted Redfin agent Sharon Henry's written comment: "Removing a residual-market option does not guarantee that private insurers will enter the market to replace it." ¹¹ CrystalBeach.com reproduced the staff PML and reinsurance figures.

Two of the seven named the litigation items, inside one list sentence.

Nobody explained either.

Why one word in § 2210.575(e) is the item to watch

The staff text: "Eliminate or make optional TIC Section 2210.575(e)," the subsection requiring that actions against the Association be presided over by an MDL-panel-appointed judge. ¹ Today it reads "shall be presided over by a judge appointed by the judicial panel on multidistrict litigation designated under Section 74.161, Government Code." ⁴

The Supreme Court of Texas read that language in Texas Windstorm Ins. Ass'n v. Pruski, No. 23-0447 (Tex. May 10, 2024), where Justice Lehrmann held "the panel-appointment requirement, while mandatory, is not jurisdictional." ³ United Policyholders estimated more than 3,600 judgments would have been open to collateral attack, a number the Court called "significant." ³ The Court added that the jurisdictional reading it rejected would "spur more litigation against TWIA and, in turn, expose it to additional costs." ³

TWIA's materials say who uses it: "To date, TWIA has sought appointments in approximately 20 cases, while only one plaintiff's attorney has requested an appointment for a case." ¹ The first appointment took almost two years. It now runs about two weeks, with the MDL Panel consistently appointing the judge already assigned. ¹ The delay argument has thinned, and the party asking to make the requirement optional is the one invoking it twenty times to one.

What "measures passed by the Florida Legislature" means on a TWIA file

Item 6, from a Board member, reads: "Consider legislative changes similar to measures passed by the Florida Legislature to address litigation issues impacting insurance costs." ¹ The materials name the referents: CS/SB 2-A, 2022 Special Session A, ch. 2022-271, Laws of Fla. (eff. Dec. 16, 2022), and CS/CS/HB 837, 2023 Reg. Sess., ch. 2023-15, Laws of Fla. (eff. Mar. 24, 2023). ^{5 6} HB 837 repealed the one-way fee statutes at Fla. Stat. §§ 627.428 and 626.9373, shortened § 95.11 limitations, rewrote § 768.81 comparative fault, amended the § 624.155 civil remedy and created § 624.1552, which sets the shape of a Florida bad-faith claim today. ⁶

Texas ran its version in 2011. HB 3 (82nd Leg., 1st C.S.) gave TWIA claimants a one-year claim filing deadline, mandatory appraisal for amount-of-loss disputes and ADR for denials, suits limited to denied claims, a two-year suit deadline after denial with 60-day pre-suit notice, and removed TWIA from Tex. Ins. Code chs. 541 and 542 and the DTPA. ¹

Page 13 of the materials sets the two regimes side by side. On suing individual adjusters, Florida is listed as "Allowed" and TWIA as "Barred by statute." The bad-faith row already requires clear and convincing evidence of a specific intent to harm the policyholder by wrongful denial of the claim. ¹ On the measures that reach a public adjuster's file, TWIA is already stricter than post-reform Florida, by its own accounting. Fee rules for public adjusters vary by state, and Texas sits inside that patchwork. The question for the Board on October 8, 2026 is what Florida-style reform adds to a statute that already bars adjuster suits.