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A BILL TO BE ENTITLED
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AN ACT
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relating to title insurance coverage for minerals and surface |
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damage resulting from mineral extraction and development. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 2703, Insurance Code, is |
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amended by adding Section 2703.0515 to read as follows: |
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Sec. 2703.0515. CERTAIN REQUIREMENTS PROHIBITED. (a) A |
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title insurance company is not required to offer or provide in |
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connection with a title insurance policy an endorsement insuring a |
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loss from damage resulting from the use of the surface of the land |
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for the extraction or development of coal, lignite, oil, gas, or |
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another mineral if the policy includes a general exception or |
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exclusion from coverage a loss from damage resulting from the use of |
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the surface of the land for the extraction or development of coal, |
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lignite, oil, gas, or another mineral. |
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(b) In this section, "general exception or exclusion" means |
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a provision in a title insurance policy or other title insuring form |
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that provides that title insurance coverage under the policy or |
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form: |
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(1) is subject to, and the title insurer does not |
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insure title to, and excepts from the description of the covered |
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property, coal, lignite, oil, gas, and other minerals in and under |
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and that may be produced from the covered property, together with |
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related rights, privileges, and immunities; or |
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(2) does not cover a lease, grant, exception, or |
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reservation of coal, lignite, oil, gas, or other minerals, or |
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related rights, privileges, and immunities, appearing in the public |
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records. |
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(c) An additional premium or other amount may not be charged |
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for an endorsement to a loan policy of title insurance if the |
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endorsement: |
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(1) insures against loss from damage to improvements |
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or permanent buildings located on land that results from the future |
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exercise of any right existing on the date of the loan policy to use |
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the surface of the land for the extraction or development of coal, |
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lignite, oil, gas, or another mineral; |
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(2) expressly does not insure against loss resulting |
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from subsidence; and |
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(3) was promulgated by the commissioner in calendar |
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year 2009. |
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SECTION 2. Subchapter B, Chapter 2703, Insurance Code, is |
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amended by adding Sections 2703.055 and 2703.056 to read as |
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follows: |
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Sec. 2703.055. REQUIREMENT OF CERTAIN PROVISIONS |
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PROHIBITED. The commissioner may not require by rule or through |
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adoption of a title insurance policy or other insuring form that a |
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title insurance policy delivered or issued for delivery in this |
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state: |
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(1) insure against a loss that a person with an |
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interest in real property sustains from damage to the property by |
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reason of severance of minerals from the surface estate; or |
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(2) provide insurance as to ownership of minerals. |
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Sec. 2703.056. EXCEPTIONS; MINERAL INTERESTS. (a) Subject |
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to the underwriting standards of the title insurance company, a |
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title insurance company may in a commitment for title insurance or a |
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title insurance policy include a general exception or a special |
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exception to except from coverage a mineral estate or an instrument |
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which purports to reserve or transfer all or part of a mineral |
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estate. |
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(b) The inclusion in a title insurance policy of a general |
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exception or a special exception described by Subsection (a) does |
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not create title insurance coverage as to the condition or |
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ownership of the mineral estate. |
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SECTION 3. Sections 2703.055 and 2703.056, Insurance Code, |
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as added by this Act, apply only to a title insurance policy that is |
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delivered or issued for delivery on or after January 1, 2012. A |
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policy delivered or issued for delivery before January 1, 2012, is |
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governed by the law as it existed immediately before the effective |
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date of this Act, and that law is continued in effect for that |
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purpose. |
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SECTION 4. This Act applies only to a title insurance policy |
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that is delivered or issued for delivery on or after January 1, |
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2012. A policy delivered or issued for delivery before January 1, |
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2012, is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 5. This Act takes effect September 1, 2011. |