HLS 14RS-4850 ORIGINAL
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Regular Session, 2014
HOUSE CONCURRENT STUDY REQUEST NO. 2
BY REPRESENTATIVE SEABAUGH
BANKS/BANKING: Requests a study of issues and policies relative to the disposition of
homeowners' insurance proceeds when a bank is an additional named insured
A CONCURRENT STUDY REQUEST1
To the House Committee on Commerce and the Senate Committee on Commerce,2
Consumer Protection, and International Affairs to meet and to function as a joint3
committee to study issues, customary practices, and policies in the state of Louisiana4
and across the nation, relative to the disposition of homeowners' insurance proceeds5
when a bank is an additional named insured and to report the findings of the joint6
committee to the legislature by February 1, 2015.7
WHEREAS, when a homeowner has a mortgage and the homeowner's property8
suffers severe damage or is destroyed, some or all of the payment proceeds from the9
homeowner's insurance company will be made jointly payable to both the homeowner and10
the mortgage holder; and11
WHEREAS, until the mortgage holder releases its claim on some or all of the12
insurance proceeds, the proceeds remain in the mortgage holder's account; and13
WHEREAS, a mortgage holder's prolonged holding of the proceeds may present an14
undue hardship for the homeowner who cannot begin to rebuild the property until the15
proceeds are released; and16
WHEREAS, other states across the nation have implemented laws that include17
specified time periods for the mortgage holder to do each of the following:18
(1) Provide notification to the homeowner that the mortgage holder is in receipt of19
the jointly payable insurance proceeds.20 HLS 14RS-4850 ORIGINAL
HCSR NO. 2
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(2) Provide requirements for which the homeowner is to comply prior to the release1
of insurance proceeds.2
(3) Release the insurance proceeds to the homeowner, if the mortgage holder3
receives sufficient evidence of the homeowner's compliance with the mortgage holder's4
requirements.5
(4) Provide notice to the homeowner of the mortgage holder's refusal to release the6
insurance proceeds, including each requirement for which the homeowner is to comply for7
the release of the proceeds.8
THEREFORE, the Legislature of Louisiana requests the House Committee on9
Commerce and the Senate Committee on Commerce, Consumer Protection, and International10
Affairs to meet and to function as a joint committee to study issues, customary practices, and11
policies in the state of Louisiana and across the nation, relative to the disposition of12
homeowners' insurance proceeds when a bank is an additional named insured and to report13
the findings of the joint committee to the legislature by February 1, 2015. 14
BE IT FURTHER RESOLVED that the joint committee shall specifically solicit15
input, recommendations, and advice from the following entities in the state possessing16
knowledge of the issues: 17
(1) The Louisiana Banker's Association. 18
(2) State Farm Insurance Company. 19
(3) The American Insurance Association.20
(4) The Independent Insurance Agents and Brokers of Louisiana.21
(5) The Louisiana Home Builders Association.22
BE IT FURTHER RESOLVED that in undertaking the study and issuing23
recommendations, the joint committee may request documents or data, conduct public24
hearings, hear the testimony of witnesses, and take any other actions that it deems necessary25
to carry out its functions.26
BE IT FURTHER RESOLVED a copy of this Study Request shall be transmitted to27
the Louisiana Banker's Association, State Farm Insurance Company, the American Insurance28
Association, the Independent Insurance Agents and Brokers of Louisiana, and the Louisiana29
Home Builders Association.30 HLS 14RS-4850 ORIGINAL
HCSR NO. 2
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Seabaugh HCSR No. 2
Requests the House Committee on Commerce and the Senate Committee on Commerce,
Consumer Protection, and International Affairs to study issues, customary practices, and
policies in the state of Louisiana and across the nation as they relate to the release of
homeowners' insurance proceeds when a bank is an additional named insured.