NU Online News Service, June 10, 3:08 p.m. EDT

The Texas Windstorm Insurance Association (TWIA) has purchased $636 million in reinsurance protection.

The policy will cover losses that exceed the $1.6 billion in funds estimated to be available from the association's Catastrophe Reserve Trust Fund and bonds.

The purchase of reinsurance was made at the direction of the TWIA board of directors at its May 20 meeting.

TWIA says the net cost of the purchase was slightly less than $100 million and will be paid from premiums received by TWIA in 2011 and 2012.

The policy is in effect from June 1 through May 31 next year.

TWIA says it purchased the reinsurance from 47 different reinsurance companies worldwide. The purchase was brokered by Guy Carpenter & Co.

TWIA is Texas' insurer of last resort for wind and hail coverage in the 14 coastal counties and parts of Harris County.

In a special session called by the governor, the legislature is to consider passing reforms for TWIA that would place limits on how long it takes policyholders to file claims. Claims from Hurricane Ike close to three years ago are still being filed, and losses have reached $1.85 billion as of the start of this year.