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.