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


Senate Research CenterC.S.S.B. 311
By: Harris
Jurisprudence
2-18-97
Committee Report (Substituted)


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 group insurance
policy providing life insurance 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, C.S.S.B. 311 gives effect to a provision in a group insurance
policy providing life insurance 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 group insurance policy
providing life insurance in force at the time of rendition, 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. 

SUMMARY OF COMMITTEE CHANGES

Amends SECTION 1, Section 3.632(b), Family Code, to give effect to a
provision in a group insurance policy providing life insurace, rather than
a life insurance policy for which 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..