AL HB139

Lenders holding insurance proceeds for residential property damage must notify insureds of all requirements for release within 14 days of receiving payment.

Lenders must release withheld insurance proceeds within 10 days of an insured's request if sufficient compliance evidence exists, or provide detailed written notice explaining reasons for refusal and remaining requirements.

Lenders failing to provide required notices or release proceeds must pay 10 percent annual interest on held amounts.

Interest accrues from the date the lender receives proceeds (if notice fails) or from the date of sufficient compliance evidence (if release fails), and stops accruing upon lender compliance.

Act becomes effective on the first day of the third month following passage and approval.