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.