SRC-SLL S.B. 311 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 311
By: Harris
Jurisprudence
2-4-97
As Filed


DIGEST 

Currently, Texas law provides that following a divorce, a provision in a
life insurance policy in favor of the insured's former spouse is not
effective except in certain circumstances.  This has created problems when
a person meant to leave the former spouse as beneficiary but was never
told by a judge, attorney, or insurance company that a redesignation of
the former spouse as beneficiary was needed.  In this instance, the former
spouse might learn that he or she was not the lawful beneficiary only when
the death benefit was claimed, which is too late for a remedy to be
effected.  This bill will give effect to a provision in a life insurance
policy, if the premiums are paid by any employer, in favor of the
insured's former spouse one year and a day after the first anniversary of
the date on which the divorce decree is rendered. 

PURPOSE

As proposed, S.B. 311 gives effect to a provision in a life insurance
policy, if the premiums are paid by an employer, in favor of the insured's
former spouse one year and a day after the first anniversary of the date
on which a divorce decree is rendered. 

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 Section 3.632(b), Family Code, to provide that if a
decree of divorce or annulment is rendered after an insured has designated
the insured's spouse as a beneficiary under a life insurance policy in
force at the time of rendition and if the premiums are paid by an
employer, a provision in the policy in favor of the insured's former
spouse is not effective until the day after the first anniversary of the
date on which the decree is rendered unless certain conditions apply. 

SECTION 2. (a) Effective date: upon passage.

(b) and (c) Make application of this Act prospective.

(d) Provides that Section 3.632(b), Family Code, as it existed before
amendment by this Act, does not invalidate the designation of a former
spouse as the beneficiary of a life insurance policy if certain criteria
apply. 

SECTION 3. Emergency clause.
  Effective date: upon passage.