By Harris                                        S.B. No. 311

      75R3987 MCK-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the disposition of beneficial interests in insurance.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 3.632(b), Family Code, is amended to read

 1-5     as follows:

 1-6           (b)  If a decree of divorce or annulment is rendered after an

 1-7     insured has designated the insured's spouse as a beneficiary under

 1-8     a life insurance policy in force at the time of rendition and if

 1-9     the premiums are paid by an employer, a provision in the policy in

1-10     favor of the insured's former spouse is not effective until the day

1-11     after the first anniversary of the date on which the decree is

1-12     rendered unless:

1-13                 (1)  the decree designates the insured's former spouse

1-14     as the beneficiary;

1-15                 (2)  the insured redesignates the former spouse as the

1-16     beneficiary after rendition of the decree;  or

1-17                 (3)  the former spouse is designated to receive the

1-18     proceeds in trust for, on behalf of, or for the benefit of a child

1-19     or a dependent of either former spouse.

1-20           SECTION 2.  (a)  This Act takes effect immediately.

1-21           (b)  The change in law made by this Act to Section 3.632(b),

1-22     Family Code, applies only to an insurance policy that is delivered,

1-23     issued for delivery, or renewed on or after the effective date of

1-24     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)  Section 3.632(b), Family Code, as it existed before

 2-7     amendment by this Act, does not invalidate the designation of a

 2-8     former spouse as the beneficiary of a life insurance policy if:

 2-9                 (1)  the insured's former spouse had physical

2-10     possession of the life insurance policy at all times after the

2-11     decree of divorce or annulment was rendered;

2-12                 (2)  the insured's former spouse paid each insurance

2-13     premium on the life insurance policy after the rendition of the

2-14     decree;

2-15                 (3)  the insured's former spouse was named executor of

2-16     the insured's estate; and

2-17                 (4)  the insured's former spouse filed a claim as the

2-18     beneficiary of the life insurance policy before the date the

2-19     insurance company paid the proceeds of the life insurance policy to

2-20     another beneficiary or the estate of the insured.

2-21           SECTION 3.  The importance of this legislation and the

2-22     crowded condition of the calendars in both houses create an

2-23     emergency and an imperative public necessity that the

2-24     constitutional rule requiring bills to be read on three several

2-25     days in each house be suspended, and this rule is hereby suspended,

2-26     and that this Act take effect and be in force from and after its

2-27     passage, and it is so enacted.