TX HB3689

Replaces public securities with state-funded financing arrangements for the Texas Windstorm Insurance Association (TWIA) to pay excess losses after catastrophic events, with limits of $500 million before an event and $1 billion after an event that depletes the catastrophe reserve trust fund

Authorizes member insurer assessments of up to $1 billion per catastrophe year for losses not covered by reserves, trust funds, or state financing, with members prohibited from recouping assessments through premium surcharges or tax credits

Creates a catastrophe surcharge system on property insurance policies statewide (fire, allied lines, farm/ranch, residential, commercial property) to repay state financing arrangements, collected as a percentage of premium for up to three years

Reduces the required loss funding level from probable maximum loss at 1-in-100 year probability to 1-in-50 year probability, and allows the comptroller to invest up to $1 billion of economic stabilization fund balances per catastrophe year

Takes effect September 1, 2025, with the new funding framework applying to losses incurred after December 31, 2025, and repeals the existing public securities provisions (Subchapters B-1 and M) effective September 1, 2027