By:  Harris                                   S.B. No. 311

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the disposition of beneficial interests in insurance.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Subsection (b), Section 3.632, Family Code, is

 1-4     amended to read as follows:

 1-5           (b)  If a decree of divorce or annulment is rendered after an

 1-6     insured has designated the insured's spouse as a beneficiary under

 1-7     a group insurance policy providing life insurance [policy] in force

 1-8     at the time of rendition, a provision in the policy in favor of the

 1-9     insured's former spouse is not effective until the day after the

1-10     first anniversary of the date on which the decree is rendered

1-11     unless:

1-12                 (1)  the decree designates the insured's former spouse

1-13     as the beneficiary;

1-14                 (2)  the insured redesignates the former spouse as the

1-15     beneficiary after rendition of the decree; or

1-16                 (3)  the former spouse is designated to receive the

1-17     proceeds in trust for, on behalf of, or for the benefit of a child

1-18     or a dependent of either former spouse.

1-19           SECTION 2.  (a)  This Act takes effect immediately.

1-20           (b)  The change in law made by this Act to Subsection (b),

1-21     Section 3.632, Family Code, applies only to an insurance policy

1-22     that is delivered, issued for delivery, or renewed on or after the

1-23     effective date of this Act.

 2-1           (c)  A policy that is not delivered, issued for delivery, or

 2-2     renewed on or after the effective date of this Act, is governed by

 2-3     the law as it existed immediately before the effective date of this

 2-4     Act, except as provided by Subsection (d) of this section, and that

 2-5     law is continued in effect for that purpose.

 2-6           (d)  Subsection (b), Section 3.632, Family Code, as it

 2-7     existed before amendment by this Act, does not invalidate the

 2-8     designation of a former spouse as the beneficiary of a life

 2-9     insurance policy if:

2-10                 (1)  the insured's former spouse had physical

2-11     possession of the life insurance policy at all times after the

2-12     decree of divorce or annulment was rendered;

2-13                 (2)  the insured's former spouse paid each insurance

2-14     premium on the life insurance policy after the rendition of the

2-15     decree;

2-16                 (3)  the insured's former spouse was named executor of

2-17     the insured's estate; and

2-18                 (4)  the insured's former spouse filed a claim as the

2-19     beneficiary of the life insurance policy before the date the

2-20     insurance company paid the proceeds of the life insurance policy to

2-21     another beneficiary or the estate of the insured.

2-22           SECTION 3.  The importance of this legislation and the

2-23     crowded condition of the calendars in both houses create an

2-24     emergency and an imperative public necessity that the

2-25     constitutional rule requiring bills to be read on three several

 3-1     days in each house be suspended, and this rule is hereby suspended,

 3-2     and that this Act take effect and be in force from and after its

 3-3     passage, and it is so enacted.