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A BILL TO BE ENTITLED
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AN ACT
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relating to the release by a lender of insurance proceeds for damage |
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to residential real property. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 557, Insurance Code, is |
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amended by adding Section 557.0021 to read as follows: |
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Sec. 557.0021. LENDER'S REQUIREMENTS FOR RELEASE OF |
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INSURANCE PROCEEDS. A lender holding insurance proceeds described |
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by Section 557.002 may not require the insured, as a condition of |
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releasing the insurance proceeds, to: |
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(1) take an action that only a person other than the |
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insured is authorized to take; |
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(2) secure the performance by a person other than the |
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insured of an action the performance of which is not within the |
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insured's control or discretion; |
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(3) obtain information or other items that the insured |
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does not have the right to obtain; |
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(4) incur an expense for which the insurance proceeds |
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do not provide reimbursement; |
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(5) take an action that would require the insured to |
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expend an unreasonable amount of time; or |
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(6) engage in activity requiring expertise the insured |
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cannot reasonably be expected to have. |
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SECTION 2. Section 557.0021, Insurance Code, as added by |
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this Act, applies to the release of insurance proceeds that are |
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received by a lender on or after the effective date of this Act, |
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except to the extent a contract provision applicable to the |
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proceeds and entered into by a lender and insured before the |
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effective date of this Act specifically conflicts with that |
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section. |
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SECTION 3. This Act takes effect September 1, 2013. |