By Ellis                                        S.B. No. 1501

      75R6898 PB-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to certain requirements for escrow accounts maintained in

 1-3     conjunction with title insurance policies.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Chapter 9, Insurance Code, is amended by adding

 1-6     Article 9.60 to read as follows:

 1-7           Art. 9.60.  LIMITATION ON BENEFITS RECEIVED FROM FINANCIAL

 1-8     INSTITUTIONS.  (a)  A title insurance company or other person

 1-9     regulated under this chapter that maintains in a financial

1-10     institution an escrow account in conjunction with a policy of title

1-11     insurance insuring an owner or mortgagee of real property may not

1-12     accept anything of value from the financial institution, including

1-13     a waiver of service fees or other charges, offered by the financial

1-14     institution as an inducement to maintain the account at that

1-15     institution.

1-16           (b)  The commissioner may adopt rules as necessary to

1-17     implement this article.

1-18           (c)  In this article, "financial institution" means a state

1-19     or national bank, a state or federal savings and loan association,

1-20     a state or federal savings bank, a state or federal credit union,

1-21     or other bank or analogous institution in which an escrow account

1-22     may be maintained.

1-23           SECTION 2.  Article 9.60, Insurance Code, as added by this

1-24     Act, applies only to an escrow account established in conjunction

 2-1     with a title  insurance policy that is delivered, issued for

 2-2     delivery, or renewed on or after January 1, 1998.  An account

 2-3     maintained in conjunction with a policy that is delivered, issued

 2-4     for delivery, or renewed before January 1, 1998, is governed by the

 2-5     law as it existed immediately before the effective date of this

 2-6     Act, and that law is continued in effect for that purpose.

 2-7           SECTION 3.  This Act takes effect September 1, 1997.

 2-8           SECTION 4.  The importance of this legislation and the

 2-9     crowded condition of the calendars in both houses create an

2-10     emergency and an imperative public necessity that the

2-11     constitutional rule requiring bills to be read on three several

2-12     days in each house be suspended, and this rule is hereby suspended.