By:  Brimer                                            H.B. No. 113
       73R489 DLF-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to an insurance claim payment held by a lender during
    1-3  repair of real property subject to security interest.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is
    1-6  amended by adding Article 21.48B to read as follows:
    1-7        Art. 21.48B.  INSURANCE CLAIM PAYMENT HELD BY LENDER PENDING
    1-8  REPAIR OF REAL PROPERTY
    1-9        Sec. 1.  DEFINITION.  In this article, "lender" means a
   1-10  person holding a mortgage, lien, deed of trust, or other security
   1-11  interest on property.
   1-12        Sec. 2.  INTEREST.  If a claim under an insurance policy for
   1-13  damage to real property is paid to the insured and a lender holding
   1-14  a security interest in the property and the lender holds all or
   1-15  part of the insurance claim payment pending completion of all or
   1-16  part of the repairs, the lender shall pay to the insured interest
   1-17  on the money held at the rate of 10 percent a year.  The interest
   1-18  begins to accrue on the date an insurer's check for payment of the
   1-19  claim is presented to the lender for the lender's signature or
   1-20  delivered to the lender.  If payment is not by check, interest
   1-21  begins to accrue on the date the lender takes custody of the claim
   1-22  money.  Interest terminates on the date the money is paid to the
   1-23  insured.
   1-24        Sec. 3.  PAYMENT ON COMPLETION OF REPAIRS.  Not later than
    2-1  the 10th day after the date the lender is notified of the
    2-2  completion of repairs, the lender shall pay to the insured:
    2-3              (1)  the interest accrued; and
    2-4              (2)  any remaining portion of the insurance claim
    2-5  payment held by the lender.
    2-6        SECTION 2.  This Act takes effect September 1, 1993, and
    2-7  applies only to an insurance claim payment paid on or after January
    2-8  1, 1994.  A payment that is paid before January 1, 1994, is
    2-9  governed by the law as it existed immediately before the effective
   2-10  date of this Act, and that law is continued in effect for that
   2-11  purpose.
   2-12        SECTION 3.  The importance of this legislation and the
   2-13  crowded condition of the calendars in both houses create an
   2-14  emergency   and   an   imperative   public   necessity   that   the
   2-15  constitutional rule requiring bills to be read on three several
   2-16  days in each house be suspended, and this rule is hereby suspended.