HB139 Alabama 2019 Session

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

Relating to insurance; to require a lender to provide notice to an insured when an insurance payment is withheld and the conditions for release of the insurance payment; to require a lender to release an insurance payment or provide the detailed conditions for release of the payment upon request of the payment by an insured; and to charge a lender interest on the insurance payment for failure to properly release an insurance payment or provide the detailed conditions for release.