SRC-LBB S.B. 1211 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1211
78R6237 DWS-FBy: Van de Putte
Business & Commerce
4/12/2003
As Filed


DIGEST AND PURPOSE 

Currently, Texas law limits collateral protection insurance for real
property to the amount of the lender's interest in the collateral while
the debtor's equity in the property is completely unprotected.  Homeowners
are having difficulty finding insurers willing to write homeowners
insurance coverage in Texas.  Consequently, many borrowers are without
insurance coverage for their homes except that which may be force placed
by their lenders.  As proposed, S.B. 1211 authorizes a premium for
collateral protection insurance for collateral that is real property to be
based on the amount of unpaid indebtedness, the cash value or replacement
value of the property, or the amount of insurance previously maintained by
the debtor.  This bill also authorizes the inclusion of an additional
premium for any liability coverage provided to the debtor. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 307.051(e), Finance Code, to authorize a
premium protection insurance for collateral that is real property to be
based on the amount of unpaid indebtedness, the cash value or replacement
value of the property, or the amount of insurance previously maintained by
the debtor, and authorizes the inclusion of an additional premium for any
liability coverage provided to the debtor.  Includes the phrase "for other
types of collateral"  in relation to a premium for collateral protection
insurance. 

SECTION 2.  Amends Section 307.052(a)(3)(A)(i), Finance Code, to replace
the phrase "equal to the debtor's indebtedeness to the creditor" with "the
creditor specifies." 

SECTION 3.  Makes application of this Act prospective.

SECTION 4.  Effective date:  upon passage or September 1, 2003.