Bill Text: TX SB735 | 2011-2012 | 82nd Legislature | Enrolled
Bill Title: Relating to prohibition of certain extra hazardous coverages by title insurance companies.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-06-17 - Effective on 9/1/11 [SB735 Detail]
Download: Texas-2011-SB735-Enrolled.html
S.B. No. 735 |
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relating to prohibition of certain extra hazardous coverages by | ||
title insurance companies. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter A, Chapter 2502, Insurance Code, is | ||
amended by adding Section 2502.006 to read as follows: | ||
Sec. 2502.006. CERTAIN EXTRA HAZARDOUS COVERAGES | ||
PROHIBITED. (a) A title insurance company may not insure against | ||
loss or damage sustained by reason of any claim that under federal | ||
bankruptcy, state insolvency, or similar creditor's rights laws the | ||
transaction vesting title in the insured as shown in the policy or | ||
creating the lien of the insured mortgage is: | ||
(1) a preference or preferential transfer under 11 | ||
U.S.C. Section 547; | ||
(2) a fraudulent transfer under 11 U.S.C. Section 548; | ||
(3) a transfer that is fraudulent as to present and | ||
future creditors under Section 24.005, Business & Commerce Code, or | ||
a similar law of another state; or | ||
(4) a transfer that is fraudulent as to present | ||
creditors under Section 24.006, Business & Commerce Code, or a | ||
similar law of another state. | ||
(b) The commissioner may by rule designate coverages that | ||
violate this section. It is not a defense against a claim that a | ||
title insurance company has violated this section that the | ||
commissioner has not adopted a rule under this subsection. | ||
(c) Title insurance issued in or on a form prescribed by the | ||
commissioner shall be considered to comply with this section. | ||
(d) Nothing in this section prohibits title insurance with | ||
respect to liens, encumbrances, or other defects to title to land | ||
that: | ||
(1) appear in the public records before the date on | ||
which the contract of title insurance is made; | ||
(2) occur or result from transactions before the | ||
transaction vesting title in the insured or creating the lien of the | ||
insured mortgage; or | ||
(3) result from failure to timely perfect or record | ||
any instrument before the date on which the contract of title | ||
insurance is made. | ||
(e) A title insurance company may not engage in the business | ||
of title insurance in this state if the title insurance company | ||
provides insurance of the type prohibited by Subsection (a) | ||
anywhere in the United States, except to the extent that the laws of | ||
another state require the title insurance company to provide that | ||
type of insurance. | ||
SECTION 2. Section 2502.006, Insurance Code, as added by | ||
this Act, applies only to an insurance policy that is delivered, | ||
issued for delivery, or renewed on or after January 1, 2012. A | ||
policy delivered, issued for delivery, or renewed before January 1, | ||
2012, is governed by the law as it existed immediately before the | ||
effective date of this Act, and that law is continued in effect for | ||
that purpose. | ||
SECTION 3. This Act takes effect September 1, 2011. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 735 passed the Senate on | ||
March 17, 2011, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 735 passed the House on | ||
May 23, 2011, by the following vote: Yeas 142, Nays 0, one | ||
present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |