83R8679 AJA-D
By: Johnson H.B. No. 1742
A BILL TO BE ENTITLED
AN ACT
relating to the release by a lender of insurance proceeds for damage
to residential real property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 557, Insurance Code, is
amended by adding Section 557.0021 to read as follows:
Sec. 557.0021. LENDER'S REQUIREMENTS FOR RELEASE OF
INSURANCE PROCEEDS. A lender holding insurance proceeds described
by Section 557.002 may not require the insured, as a condition of
releasing the insurance proceeds, to:
(1) take an action that only a person other than the
insured is authorized to take;
(2) secure the performance by a person other than the
insured of an action the performance of which is not within the
insured's control or discretion;
(3) obtain information or other items that the insured
does not have the right to obtain;
(4) incur an expense for which the insurance proceeds
do not provide reimbursement;
(5) take an action that would require the insured to
expend an unreasonable amount of time; or
(6) engage in activity requiring expertise the insured
cannot reasonably be expected to have.
SECTION 2. Section 557.0021, Insurance Code, as added by
this Act, applies to the release of insurance proceeds that are
received by a lender on or after the effective date of this Act,
except to the extent a contract provision applicable to the
proceeds and entered into by a lender and insured before the
effective date of this Act specifically conflicts with that
section.
SECTION 3. This Act takes effect September 1, 2013.