Bill Text: CT HB05140 | 2012 | General Assembly | Comm Sub
Bill Title: An Act Concerning Payment Of Insurance Settlement Proceeds To An Insured By A Mortgage Holder.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2012-04-16 - File Number 438 [HB05140 Detail]
Download: Connecticut-2012-HB05140-Comm_Sub.html
General Assembly |
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February Session, 2012 |
*_____HB05140BA____040412____* |
AN ACT CONCERNING PAYMENT OF INSURANCE SETTLEMENT PROCEEDS TO AN INSURED BY A MORTGAGE HOLDER.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 36a-498 of the 2012 supplement to the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2012):
(NEW) (i) (1) No mortgage holder, as defined in section 49-10b, shall unreasonably withhold from the borrower of a residential mortgage loan a payment of insurance settlement proceeds or an endorsement of an insurance settlement proceeds payment instrument, that is issued by an insurance company insuring the residential real property that serves as collateral for such residential mortgage loan, when:
(A) Such payment is made by the insurance company for a covered loss and the payees jointly named on the payment instrument are the borrower and the mortgage holder;
(B) The borrower has provided the mortgage holder with such information, documents and agreements as may be reasonably requested to allow the mortgage holder to evaluate and manage the risks associated with the covered loss, including information regarding the property, the loss, the insurance claim and the cost, value and feasibility of any proposed repairs;
(C) The borrower has satisfied any reasonable conditions the mortgage holder may establish to protect the mortgage holder's interest in such residential real property and the mortgage holder's ability to recover the mortgage debt, including completion of any repairs reasonably required; and
(D) The borrower has provided the mortgage holder with a reasonable opportunity to verify that (i) the conditions established pursuant to subparagraph (C) of this subdivision have been satisfied, including inspection of such residential real property and of any required repairs, and (ii) sufficient collateral value for such residential real property exists to support the release of the insurance settlement proceeds.
(2) No mortgage holder shall be deemed to unreasonably withhold a payment or endorsement if the mortgage holder:
(A) Provides such payment or endorsement to the borrower not later than ten business days after such borrower satisfies the applicable conditions and requirements of subparagraphs (B) to (D), inclusive, of subdivision (1) of this subsection;
(B) (i) Does not specify or establish any conditions or requirements under subparagraphs (B) to (D), inclusive, of subdivision (1) of this subsection within ten business days after the mortgage holder receives such insurance settlement proceeds, and (ii) the mortgage holder provides such payment or endorsement to the borrower not later than the expiration of such ten-day period;
(C) Withholds payment or endorsement because, in the reasonable judgment of the mortgage holder, such payment or endorsement will impair or jeopardize the mortgage holder's ability to recover the mortgage debt; or
(D) Withholds payment or endorsement because the borrower is in default of the residential mortgage loan.
(3) Nothing in this subsection shall be construed to affect any contractual rights of a mortgage holder or to prohibit or prevent a mortgage holder from disbursing partial payments to a borrower of any such insurance settlement proceeds as repairs are completed and sufficient collateral value is restored to such residential real property.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2012 |
36a-498 |
BA |
Joint Favorable Subst. |