By McClendon H.B. No. 457
76R454 MCK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the disposition of beneficial interests in life
1-3 insurance, retirement benefits, and other financial plans.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 9.301, Family Code, is amended to read as
1-6 follows:
1-7 Sec. 9.301. PRE-DECREE DESIGNATION OF EX-SPOUSE AS
1-8 BENEFICIARY OF LIFE INSURANCE. [(a)] If a decree of divorce or
1-9 annulment is rendered after an insured has designated the insured's
1-10 spouse as a beneficiary under a life insurance policy in force at
1-11 the time of rendition, a provision in the policy in favor of the
1-12 insured's former spouse is valid [not effective] unless the decree
1-13 states otherwise[:]
1-14 [(1) the decree designates the insured's former spouse
1-15 as the beneficiary;]
1-16 [(2) the insured redesignates the former spouse as the
1-17 beneficiary after rendition of the decree; or]
1-18 [(3) the former spouse is designated to receive the
1-19 proceeds in trust for, on behalf of, or for the benefit of a child
1-20 or a dependent of either former spouse].
1-21 [(b) If a designation is not effective under Subsection (a),
1-22 the proceeds of the policy are payable to the named alternative
1-23 beneficiary or, if there is not a named alternative beneficiary, to
1-24 the estate of the insured.]
2-1 [(c) An insurer who pays the proceeds of a life insurance
2-2 policy issued by the insurer to the beneficiary under a designation
2-3 that is not effective under Subsection (a) is liable for payment of
2-4 the proceeds to the person or estate provided by Subsection (b)
2-5 only if:]
2-6 [(1) before payment of the proceeds to the designated
2-7 beneficiary, the insurer receives written notice at the home office
2-8 of the insurer from an interested person that the designation is
2-9 not effective under Subsection (a); and]
2-10 [(2) the insurer has not interpleaded the proceeds
2-11 into the registry of a court of competent jurisdiction in
2-12 accordance with the Texas Rules of Civil Procedure.]
2-13 SECTION 2. Section 9.302, Family Code, is amended to read as
2-14 follows:
2-15 Sec. 9.302. Pre-Decree Designation of Ex-Spouse as
2-16 Beneficiary in Retirement Benefits and Other Financial Plans.
2-17 (a) If a decree of divorce or annulment is rendered after a
2-18 spouse, acting in the capacity of a participant, annuitant, or
2-19 account holder, has designated the other spouse as a beneficiary
2-20 under an individual retirement account, employee stock option plan,
2-21 stock option, or other form of savings, bonus, profit-sharing, or
2-22 other employer plan or financial plan of an employee or a
2-23 participant in force at the time of rendition, the designating
2-24 provision in the plan in favor of the other former spouse is valid
2-25 [not effective] unless the decree states otherwise[:]
2-26 [(1) the decree designates the other former spouse as
2-27 the beneficiary;]
3-1 [(2) the designating former spouse redesignates the
3-2 other former spouse as the beneficiary after rendition of the
3-3 decree; or]
3-4 [(3) the other former spouse is designated to receive
3-5 the proceeds or benefits in trust for, on behalf of, or for the
3-6 benefit of a child or dependent of either former spouse].
3-7 (b) [If a designation is not effective under Subsection (a),
3-8 the benefits or proceeds are payable to the named alternative
3-9 beneficiary or, if there is not a named alternative beneficiary, to
3-10 the designating former spouse.]
3-11 [(c) A business entity, employer, pension trust, insurer,
3-12 financial institution, or other person obligated to pay retirement
3-13 benefits or proceeds of a financial plan covered by this section
3-14 who pays the benefits or proceeds to the beneficiary under a
3-15 designation of the other former spouse that is not effective under
3-16 Subsection (a) is liable for payment of the benefits or proceeds to
3-17 the person provided by Subsection (b) only if:]
3-18 [(1) before payment of the benefits or proceeds to the
3-19 designated beneficiary, the payor receives written notice at the
3-20 home office or principal office of the payor from an interested
3-21 person that the designation of the beneficiary or fiduciary is not
3-22 effective under Subsection (a); and]
3-23 [(2) the payor has not interpleaded the benefits or
3-24 proceeds into the registry of a court of competent jurisdiction in
3-25 accordance with the Texas Rules of Civil Procedure.]
3-26 [(d) This section does not affect the right of a former
3-27 spouse to assert an ownership interest in an undivided pension,
4-1 retirement, annuity, or other financial plan described by this
4-2 section as provided by this subchapter.]
4-3 [(e)] This section does not apply to the disposition of a
4-4 beneficial interest in a retirement benefit or other financial plan
4-5 of a public retirement system as defined by Section 802.001,
4-6 Government Code.
4-7 SECTION 3. This Act takes effect September 1, 1999, and
4-8 applies only to a decree of divorce or annulment rendered on or
4-9 after the effective date of this Act. A decree of divorce or
4-10 annulment rendered before the effective date of this Act is
4-11 governed by the law as it existed immediately before the effective
4-12 date of this Act, and that law is continued in effect for that
4-13 purpose.
4-14 SECTION 4. The importance of this legislation and the
4-15 crowded condition of the calendars in both houses create an
4-16 emergency and an imperative public necessity that the
4-17 constitutional rule requiring bills to be read on three several
4-18 days in each house be suspended, and this rule is hereby suspended.