The Fifteenth Court of Appeals has denied ASI Lloyds Insurance Company’s appeal in a dispute concerning the computation of excess-loss payments for damages caused by Hurricane Harvey.
ASI Lloyds Insurance Company v. Texas Windstorm Insurance Association and the Honorable Cassie Brown in her Official Capacity as Commissioner, Texas Department of Insurance (No. 15-24-00083; November 21, 2025) arose from a dispute over the third of three assessments TWIA levied on its members in the wake of Hurricane Harvey. To make the third assessment in 2020, TWIA based ASI Lloyds’ percentage of participation in the market (which determines the amount of the assessment) based on ASI’s 2020 net premiums in Texas. ASI and other insurers sought administrative review, arguing that TWIA should have used their percentage of participation from 2017, the year Harvey occurred. Had TDI done so, ASI would have saved $438,000. The State Office of Administrative Hearings (SOAH) issued a proposal for decision affirming TWIA’s calculations, which TDI adopted. ASI then filed suit against TWIA and the Commissioner, seeking judicial review of TWIA’s assessment and declaratory relief invalidating the rule prescribing the methodology for making such assessments. The trial court denied TDI’s and the Commissioner’s pleas to jurisdiction and rendered final judgment affirming the Commissioner’s order and denying ASI’s petition for declaratory judgment.
In opinion by Justice Field, the court of appeals affirmed. The administrative rule in question, which TWIA adopted in 2011, requires an insurer’s percentage of participation to “be computed on a calendar year basis for the year in the assessment is made.” 28 TAC § 5.4162(b). The rule specifically forbids the calculation from being based on the year in which the catastrophic event occurred, except for an assessment made during that year. ASI contended that legislative amendments to Chapter 2210, Insurance Code, which the Legislature enacted in 2015, repealed the statutory provisions on which the 2011 rule was based. The rule, ASI argued, was thus invalid. ASI specifically referred to amended §§ 2210.613 and 2210.6135 as eliminating the justification for the rule. Yet, as Justice Field pointed out, these sections didn’t say anything about the assessment of participation points during the calendar year of the assessment as opposed to the year the catastrophe occurred.
Additionally, he went on, TDI cited the authority of other statutes, including § 2210.52, which “vests TDI with the ability to specify and decide how to calculate each insurer’s percentage of participation.” The Legislature also added the Class 1 Assessment to its funding scheme under § 2210.0725 in 2015, which specified that the allocation of each insurer’s proportion of losses would be determined “in the manner used to determine each insurer’s participation in [TWIA] for the year under § 2210.052.” That statute likewise required TWIA to determine annually “each member’s participation … in the manner provided by the plan of operation” (emphasis in original). The court concluded that since “[n]o statute provides what calendar year should be used to determine an insurer’s percentage of participation for an assessment by TWIA” (and the Legislature knew about the rule in 2015 and didn’t do anything to change it), adoption of the rule was a valid exercise of TWIA’s statutory responsibilities under Chapter 2210.
ASI tried again, contending that the Legislature created a conflict with the rule by enacting § 2210.003(3-b), Insurance Code, in 2011. This statutory change defined “catastrophe year” to mean “a calendar year in which an occurrence or a series of occurrences results in insured losses, regardless of when the insured losses are ultimately paid.” ASI argued that the change signaled the Legislature’s disapproval of the rule. The court was unpersuaded, observing that the definition of “catastrophe year” had nothing to do with TWIA’s determination of a member’s share of an assessment relating to that catastrophe and in no way conflicted with the rule. In any event, the Legislature clearly left it up TDI and TWIA to work out the details of the funding scheme for excess losses in the association’s plan of operation. The court affirmed the trial court’s order denying ASI’s petition for declaratory relief.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
