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SENATE DOCKET, NO. 2189 FILED ON: 1/20/2023
SENATE . . . . . . . . . . . . . . No. 685
The Commonwealth of Massachusetts
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PRESENTED BY:
Mark C. Montigny
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to the fiduciary responsibility of lenders for non-payment of insurance premiums
from escrowed accounts.
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PETITION OF:
NAME:DISTRICT/ADDRESS :Mark C. MontignySecond Bristol and Plymouth 1 of 2
SENATE DOCKET, NO. 2189 FILED ON: 1/20/2023
SENATE . . . . . . . . . . . . . . No. 685
By Mr. Montigny, a petition (accompanied by bill, Senate, No. 685) of Mark C. Montigny for
legislation relative to the fiduciary responsibility of lenders for non-payment of insurance
premiums from escrowed accounts. Financial Services.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act relative to the fiduciary responsibility of lenders for non-payment of insurance premiums
from escrowed accounts.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 4 of Chapter 167E of the General Laws, as so appearing in the
22020 Official Edition, is hereby amended by inserting after subsection (c), the following
3subsection:-
4 “(d) If a bank requires, as part of its loan policies, that a borrower escrow the insurance
5premium for property insurance on real estate secured by a mortgage loan and said bank, as a
6result of neglect, fails to pay the insurance premium on a mortgage loan when the insurance
7premium is due and there are sufficient escrowed funds on deposit to pay said insurance
8premium, and if the property owner suffers a loss as a result of this failure, then the bank is liable
9for the loss; except, however, that with respect to any loss, which would otherwise have been
10insured, the extent of the liability shall not exceed the coverage limits of any insurance policy,
11which has lapsed. The bank shall pay the insurance premium and any increased cost for securing 2 of 2
12a new insurance policy for a period of three (3) years. If the bank is late in paying the insurance
13premium, the bank shall pay the late fee charged by the insurance company.”.