Bill Text: TX SB735 | 2011-2012 | 82nd Legislature | Enrolled

Texas Senate Bill 735 (Prior Session Legislation)

Bill Title: Relating to prohibition of certain extra hazardous coverages by title insurance companies.

Sponsorship: Partisan Bill (Republican 2)

Status: (Passed) 2011-06-17 - Effective on 9/1/11 [SB735 Detail]

Download: Texas-2011-SB735-Enrolled.html



	S.B. No. 735




	AN ACT
	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