SRC-AAA H.B. 906 75(R) BILL ANALYSIS Senate Research Center H.B. 906 By: McCall (Duncan) Jurisprudence 4-17-97 Engrossed DIGEST Currently, policyholders who have loss payees listed on their policies are often placed in the position of dealing with demands for payment on the repairs to their homes or automobiles. They have no cash flow to make the payments even though the loss was fully insured. This bill sets forth duties of a lienholder, if payment of an insurance claim relating to personal property requires the endorsement of a check or draft by a holder of a lien on property or otherwise requires approval of the lienholder and provides for civil penalties. PURPOSE As proposed, H.B. 906 sets forth duties of a lienholder, if payment of an insurance claim relating to personal property requires the endorsement of a check or draft by a holder of a lien on property or otherwise requires approval of the lienholder and provides for civil penalties. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 132, V.T.C.S., by adding Article 9031, as follows: Art. 9031. LIENHOLDER APPROVAL OF INSURANCE CLAIM PAYMENT Sec. 1. Sets forth duties of a lienholder, if payment of an insurance claim relating to personal property requires the endorsement of a check or draft by a holder of a lien on property or otherwise requires approval of the lienholder. Sec. 2. Provides that a lienholder who violates Section 1 is liable for a civil penalty not to exceed $500 for each violation. Authorizes the attorney general to sue to collect a civil penalty. SECTION 2. Effective date: September 1, 1997. SECTION 3. Emergency clause.