General Assembly Raised Bill No. 5140
February Session, 2012 LCO No. 878
*00878_______INS*
Referred to Committee on Insurance and Real Estate
Introduced by:
(INS)
General Assembly
Raised Bill No. 5140
February Session, 2012
LCO No. 878
*00878_______INS*
Referred to Committee on Insurance and Real Estate
Introduced by:
(INS)
AN ACT CONCERNING TIMELY PAYMENT TO AN INSURED BY A MORTGAGE COMPANY.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 36a-498 of the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2012):
(NEW) (i) (1) No mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall withhold payment or endorsement of a payment to a borrower from an insurance company insuring such borrower, when (A) such payment is made by the insurance company for a covered claim and the payees jointly named on the payment instrument are the borrower and the mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, as applicable, and (B) the borrower has provided any required or requested information reasonably necessary to document the covered claim, to the mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator, as applicable, or loan processor, underwriter or mortgage service company of such lender, correspondent lender, broker or loan originator, as applicable.
(2) Any such mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator shall pay or endorse a payment for the full amount of the payment instrument specified in subdivision (1) of this subsection, to a borrower not later than ten calendar days after it receives the information provided pursuant to subparagraph (B) of subdivision (1) of this subsection or, if no information is required or requested, after it receives the payment instrument specified in subparagraph (A) of subdivision (1) of this subsection from the borrower or the insurance company.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2012 36a-498
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2012
36a-498
Statement of Purpose:
To establish a time frame for a mortgage company to pay or endorse payment to a borrower for a covered claim that is made jointly to the borrower and the mortgage company.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]