By De La Garza, Carona H.B. No. 1932
74R5078 MWV-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to acceptance of an insurance binder by a lender.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 2(f), Article 21.48A, Insurance Code, is
1-5 amended to read as follows:
1-6 (f) A Lender that requires a Borrower to secure insurance
1-7 coverage as security for a <before the Lender will provide a
1-8 residential mortgage> loan shall accept an insurance binder as
1-9 evidence of the required insurance if:
1-10 (1) the insurance binder is issued by a licensed local
1-11 recording agent as that term is defined by Article 21.14 of this
1-12 code and, if requested to do so, the agent shall furnish
1-13 appropriate evidence to the Lender;
1-14 (2) the local recording agent is appointed to
1-15 represent the insurance company whose name appears on the binder
1-16 and is authorized to issue binders and, if requested to do so, the
1-17 agent shall furnish appropriate evidence to the Lender;
1-18 (3) the insurance binder is accompanied by evidence of
1-19 payment of the required premium; and
1-20 (4) the insurance binder will be replaced by an
1-21 original insurance policy for the required coverage within 30 days
1-22 of the date of the issuance of the insurance binder.
1-23 If the foregoing conditions are met, a Lender may not require
1-24 a Borrower to provide an original insurance policy in lieu of the
2-1 insurance binder.
2-2 SECTION 2. This Act takes effect September 1, 1995, and
2-3 applies only to an insurance binder that is delivered, issued for
2-4 delivery, or renewed on or after January 1, 1996. A binder that is
2-5 delivered, issued for delivery, or renewed before January 1, 1996,
2-6 is governed by the law as it existed immediately before the
2-7 effective date of this Act, and that law is continued in effect for
2-8 that purpose.
2-9 SECTION 3. The importance of this legislation and the
2-10 crowded condition of the calendars in both houses create an
2-11 emergency and an imperative public necessity that the
2-12 constitutional rule requiring bills to be read on three several
2-13 days in each house be suspended, and this rule is hereby suspended.