SENATE DOCKET, NO. 133        FILED ON: 1/11/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 482

The Commonwealth of Massachusetts

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PRESENTED BY:

Michael J. Rodrigues

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to non-payment of insurance premiums from escrowed funds by lending institutions.

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PETITION OF:

SENATE DOCKET, NO. 133        FILED ON: 1/11/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 482

The Commonwealth of Massachusetts

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In the Year Two Thousand Thirteen

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An Act relative to non-payment of insurance premiums from escrowed funds by lending institutions.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1.  Chapter 167E of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after section 8, the following section:-

Section 9.  If the lender, as a result of neglect, fails to pay the insurance premium on a property insurance policy on property secured by a mortgage when the insurance premium is due and there are sufficient escrowed funds on deposit to pay said insurance premium, and if the property owner suffers a loss as a result of this failure, then the lender is liable for the loss; except, however, that with respect to any loss, which would otherwise have been insured, the extent of the liability shall not exceed the coverage limits of any insurance policy, which has lapsed.  The lender shall pay the insurance premium and any increased cost for securing a new insurance policy for a period of three (3) years.