1-1           By:  Harris                                      S.B. No. 311

 1-2           (In the Senate - Filed January 27, 1997; January 29, 1997,

 1-3     read first time and referred to Committee on Jurisprudence;

 1-4     February 19, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 7, Nays 0;

 1-6     February 19, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 311                   By:  Harris

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the disposition of beneficial interests in insurance.

1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-12           SECTION 1.  Subsection (b), Section 3.632, Family Code, is

1-13     amended to read as follows:

1-14           (b)  If a decree of divorce or annulment is rendered after an

1-15     insured has designated the insured's spouse as a beneficiary under

1-16     a group insurance policy providing life insurance [policy] in force

1-17     at the time of rendition, a provision in the policy in favor of the

1-18     insured's former spouse is not effective until the day after the

1-19     first anniversary of the date on which the decree is rendered

1-20     unless:

1-21                 (1)  the decree designates the insured's former spouse

1-22     as the beneficiary;

1-23                 (2)  the insured redesignates the former spouse as the

1-24     beneficiary after rendition of the decree; or

1-25                 (3)  the former spouse is designated to receive the

1-26     proceeds in trust for, on behalf of, or for the benefit of a child

1-27     or a dependent of either former spouse.

1-28           SECTION 2.  (a)  This Act takes effect immediately.

1-29           (b)  The change in law made by this Act to Subsection (b),

1-30     Section 3.632, Family Code, applies only to an insurance policy

1-31     that is delivered, issued for delivery, or renewed on or after the

1-32     effective date of this Act.

1-33           (c)  A policy that is not delivered, issued for delivery, or

1-34     renewed on or after the effective date of this Act, is governed by

1-35     the law as it existed immediately before the effective date of this

1-36     Act, except as provided by Subsection (d) of this section, and that

1-37     law is continued in effect for that purpose.

1-38           (d)  Subsection (b), Section 3.632, Family Code, as it

1-39     existed before amendment by this Act, does not invalidate the

1-40     designation of a former spouse as the beneficiary of a life

1-41     insurance policy if:

1-42                 (1)  the insured's former spouse had physical

1-43     possession of the life insurance policy at all times after the

1-44     decree of divorce or annulment was rendered;

1-45                 (2)  the insured's former spouse paid each insurance

1-46     premium on the life insurance policy after the rendition of the

1-47     decree;

1-48                 (3)  the insured's former spouse was named executor of

1-49     the insured's estate; and

1-50                 (4)  the insured's former spouse filed a claim as the

1-51     beneficiary of the life insurance policy before the date the

1-52     insurance company paid the proceeds of the life insurance policy to

1-53     another beneficiary or the estate of the insured.

1-54           SECTION 3.  The importance of this legislation and the

1-55     crowded condition of the calendars in both houses create an

1-56     emergency and an imperative public necessity that the

1-57     constitutional rule requiring bills to be read on three several

1-58     days in each house be suspended, and this rule is hereby suspended,

1-59     and that this Act take effect and be in force from and after its

1-60     passage, and it is so enacted.

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