HB139 Alabama 2019 Session

Summary

Primary Sponsor

K.L. Brown

Republican

Session

Regular Session 2019

Title

Insurance, withheld insurance payments by lender, release and notice requirement provided

Description

Under existing law, when issuing a payment for an insurance claim, an insurance company may release all or a portion of the payment to the lender or the insured, or both. The lender generally has an interest in the property and the property's condition, and may withhold payment for a period of time to ensure that the insured uses the insurance payment to repair the property to its pre-loss condition.

This bill would provide that if the lender holds all or part of the payment for an insurance claim, the lender shall notify the insured of each requirement with which the insured must comply for the lender to release the payment and would require the lender to issue the notice within a certain amount of time.

This bill would require the lender, upon receipt of a request by an insured for an insurance payment held by a lender, to either issue the payment to the insured or provide a detailed notice of why the payment is being withheld and the steps the insured needs to take in order for the lender to release the payment.

This bill would provide that upon a lender's failure to issue the payment or provide a detailed notice of why payment is being withheld, the lender shall pay the insured interest on the withheld payment at a specified rate.

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Subjects

Insurance