Texas 2009 - 81st Regular

Texas Senate Bill SB2272 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	By: Jackson S.B. No. 2272
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to a lender's release of insurance proceeds.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Section 557.002, Insurance Code is amended to
9	9	read as follows:
10	10	Sec. 557.002. NOTIFICATION BY LENDER TO INSURED CONCERNING
11	11	INSURANCE PROCEEDS. (a) If a claim under an insurance policy for
12	12	damage to residential real property is paid to the insured and a
13	13	lender, and the lender holds all or part of the proceeds from the
14	14	insurance claim payment pending completion of all or part of the
15	15	repairs to the property, the lender shall specifically notify the
16	16	insured of each reasonable requirement with which the insured must
17	17	comply for the lender to release the insurance proceeds.
18	18	(b) The notice required under this section must be provided
19	19	not later than the 10th day after the date the lender receives
20	20	payment of the insurance proceeds.
21	21	SECTION 2. Section 557.003, Insurance Code is amended to
22	22	read as follows:
23	23	Sec. 557.003. LENDER'S RELEASE OR REFUSAL TO RELEASE
24	24	INSURANCE PROCEEDS. Not later than the 10th day after the date a
25	25	lender receives from the insured a request for release of all or
26	26	part of the insurance proceeds held by the lender, the lender shall:
27	27	(1) if the lender has received [sufficient] evidence
28	28	of the insured's compliance with the requirements specified by the
29	29	lender under Section 557.002 for release of the proceeds, release
30	30	to the insured, as requested, all or part of the proceeds; or
31	31	(2) provide notice to the insured that explains
32	32	specifically:
33	33	(A) the good faith reason for the lender's
34	34	refusal to release the proceeds to the insured; and
35	35	(B) each requirement as specified by the lender
36	36	under Section 557.002 with which the insured must comply for the
37	37	lender to release the proceeds.
38	38	SECTION 3. Section 557.004, Insurance Code is amended to
39	39	read as follows:
40	40	Sec. 557.004. LIABILITY FOR VIOLATION OF SUBCHAPTER.
41	41	(a) If a lender is not in compliance with this subchapter, the
42	42	lender is liable to pay insured the proceeds held by the lender,
43	43	interest at the rate of 18 percent a year on the proceeds held by the
44	44	lender as damages, together with reasonable attorney's fees.
45	45	(b) If a suit is filed, the attorney's fees shall be taxed as
46	46	part of the costs in the case. [PAYMENT OF INTEREST; RATE. A lender
47	47	who fails to provide notice as required by Section 557.002 or
48	48	557.003 or to release insurance proceeds as required by Section
49	49	557.003 shall pay to the insured interest at the rate of 10 percent
50	50	a year on the proceeds held by the lender.]
51	51	SECTION 4. Section 557.005, Insurance Code is amended to
52	52	read as follows:
53	53	Sec. 557.005. REMEDIES NOT EXCLUSIVE. The remedies
54	54	provided by this subchapter are in addition to any other remedy or
55	55	procedure provided by law or at common law. [ACCRUAL OF INTEREST.
56	56	(a) If a lender fails to provide notice as required by Section
57	57	557.002 or 557.003, interest begins to accrue on the date the lender
58	58	received the insurance proceeds.
59	59	(b) If a lender fails to release insurance proceeds as
60	60	required by Section 557.003, interest begins to accrue on the date
61	61	the lender receives sufficient evidence of the insured's compliance
62	62	with the requirements specified by the lender under Section 557.002
63	63	or 557.003 for release of the proceeds.
64	64	(c) Interest stops accruing on the date the lender complies
65	65	with Section 557.002 or 557.003, as applicable.]
66	66	SECTION 5. Section 557.006, Insurance Code is repealed.