778. As used in this article, "premium financing" means engaging in
the business of advancing money, directly or indirectly, to an
insurer or producer at the request of an insured pursuant to the
terms of a premium finance agreement, wherein the insured has
assigned the unearned premiums, accrued dividends, or loss payments
as security for such advancement in payment of premiums on insurance
contracts only, and does not include the financing of insurance
contract premiums purchased in connection with the financing of goods
and services.
778.1. As used in this article, "premium finance agreement" means a
loan contract, note, agreement, or obligation by which an insured
agrees to pay to a lender in installments the principal amount
advanced by the lender to an insurer or producer in payment of
premium on an insurance contract or contracts, plus charges, with the
assignment, as security therefor, of the unearned premiums, accrued
dividends, or loss payments.
778.2. (a) Any person engaged in business as an insurance agent or
broker and who participates in the arrangement of a premium financing
agreement shall, if he accepts compensation for arranging,
directing, or performing services in connection with the premium
financing agreement, disclose to the insured, in a manner and form
established by the commissioner, the amount of compensation he is to
receive from the premium financer and maintain for three years and
make available to the commissioner a list of accounts in connection
with which he has accepted compensation for premium financing
services showing the amount of such compensation with respect to each
premium financing agreement and with respect to each financing
schedule used by the agent or broker. The requirements of this
subdivision shall not apply with respect to interest paid to the
broker or agent by the premium financer based upon delay in payment
of the premium due the insurer as permitted under subdivision (a) or
(b) of Section 18628 of the Financial Code.
(b) The commissoner shall hold a hearing and adopt by regulation a
standard procedure and form for making the disclosure to the insured
required by subdivision (a).
778.3. The amount of the periodic finance charges, if any, imposed
for the premium financing purchased and the annual percentage rate
associated with those charges shall be disclosed in the policy
itself, or if arranged pursuant to a separate premium financing
agreement in the premium financing agreement itself, and in the
premium finance billings. If the finance charge is a fixed fee,
regardless of the amount of the loan or the balance due, the
disclosure is not required to include the annual percentage rate
associated with those charges. This section shall not apply to any
insurance policy or premium finance billing if the same information
is otherwise disclosed to the insured as required by any other
provision of state or federal law.
778.4. (a) Every fire and casualty broker-agent shall, prior to
arranging premium financing for any new or renewal policy of
insurance specified in Section 660, do all of the following:
(1) Provide the applicant or prospective insured with any
information that is required by the federal Truth in Lending Act (15
U.S.C. Sec. 1601 et seq.).
(2) Obtain the signature of the applicant or prospective insured
on the following disclosure, which shall be in 10-point bold face
type on a separate form or sheet of paper:
Some insurance companies and the California Automobile Assigned
Risk Plan (CAARP) provide the opportunity to make payments on
insurance premiums. Your agent or broker is required to disclose
these options, if any are available for the insurance you are
purchasing. If you choose to enter into a contract that provides for
premium financing, your agent is required by law to make certain
disclosures concerning interest, fees, or other charges. If your
insurance has been financed by any person or business other than your
insurance company, and your insurance is canceled for any reason,
your loan may be subject to continued interest charges, or other
charges that may result from delays by your insurance company in
repaying the premium finance company. You should understand all of
the charges associated with your financing plan. If you are uncertain
about how the financing plan works, you should ask your insurance
agent or broker.
(b) Every fire and casualty agent-broker shall comply with the
requirements of the Consumer Contract Awareness Act of 1990 (Title
1.86 (commencing with Section 1799.200) of Part 4 of Division 3 of
the Civil Code) to the extent that its provisions are applicable to
any transaction subject to this section.
(c) If a transaction subject to subdivision (a) is conducted over
the telephone, the fire and casualty broker-agent shall be deemed to
have complied with the requirements of subdivision (a) if, within 72
hours after transacting the contract or agreement, the disclosure
form and other information required by subdivision (a) is mailed to
the applicant or insured at the address provided by the applicant or
insured. Proof of mailing shall be established by the method
described in Section 38.
778. As used in this article, "premium financing" means engaging in
the business of advancing money, directly or indirectly, to an
insurer or producer at the request of an insured pursuant to the
terms of a premium finance agreement, wherein the insured has
assigned the unearned premiums, accrued dividends, or loss payments
as security for such advancement in payment of premiums on insurance
contracts only, and does not include the financing of insurance
contract premiums purchased in connection with the financing of goods
and services.
778.1. As used in this article, "premium finance agreement" means a
loan contract, note, agreement, or obligation by which an insured
agrees to pay to a lender in installments the principal amount
advanced by the lender to an insurer or producer in payment of
premium on an insurance contract or contracts, plus charges, with the
assignment, as security therefor, of the unearned premiums, accrued
dividends, or loss payments.
778.2. (a) Any person engaged in business as an insurance agent or
broker and who participates in the arrangement of a premium financing
agreement shall, if he accepts compensation for arranging,
directing, or performing services in connection with the premium
financing agreement, disclose to the insured, in a manner and form
established by the commissioner, the amount of compensation he is to
receive from the premium financer and maintain for three years and
make available to the commissioner a list of accounts in connection
with which he has accepted compensation for premium financing
services showing the amount of such compensation with respect to each
premium financing agreement and with respect to each financing
schedule used by the agent or broker. The requirements of this
subdivision shall not apply with respect to interest paid to the
broker or agent by the premium financer based upon delay in payment
of the premium due the insurer as permitted under subdivision (a) or
(b) of Section 18628 of the Financial Code.
(b) The commissoner shall hold a hearing and adopt by regulation a
standard procedure and form for making the disclosure to the insured
required by subdivision (a).
778.3. The amount of the periodic finance charges, if any, imposed
for the premium financing purchased and the annual percentage rate
associated with those charges shall be disclosed in the policy
itself, or if arranged pursuant to a separate premium financing
agreement in the premium financing agreement itself, and in the
premium finance billings. If the finance charge is a fixed fee,
regardless of the amount of the loan or the balance due, the
disclosure is not required to include the annual percentage rate
associated with those charges. This section shall not apply to any
insurance policy or premium finance billing if the same information
is otherwise disclosed to the insured as required by any other
provision of state or federal law.
778.4. (a) Every fire and casualty broker-agent shall, prior to
arranging premium financing for any new or renewal policy of
insurance specified in Section 660, do all of the following:
(1) Provide the applicant or prospective insured with any
information that is required by the federal Truth in Lending Act (15
U.S.C. Sec. 1601 et seq.).
(2) Obtain the signature of the applicant or prospective insured
on the following disclosure, which shall be in 10-point bold face
type on a separate form or sheet of paper:
Some insurance companies and the California Automobile Assigned
Risk Plan (CAARP) provide the opportunity to make payments on
insurance premiums. Your agent or broker is required to disclose
these options, if any are available for the insurance you are
purchasing. If you choose to enter into a contract that provides for
premium financing, your agent is required by law to make certain
disclosures concerning interest, fees, or other charges. If your
insurance has been financed by any person or business other than your
insurance company, and your insurance is canceled for any reason,
your loan may be subject to continued interest charges, or other
charges that may result from delays by your insurance company in
repaying the premium finance company. You should understand all of
the charges associated with your financing plan. If you are uncertain
about how the financing plan works, you should ask your insurance
agent or broker.
(b) Every fire and casualty agent-broker shall comply with the
requirements of the Consumer Contract Awareness Act of 1990 (Title
1.86 (commencing with Section 1799.200) of Part 4 of Division 3 of
the Civil Code) to the extent that its provisions are applicable to
any transaction subject to this section.
(c) If a transaction subject to subdivision (a) is conducted over
the telephone, the fire and casualty broker-agent shall be deemed to
have complied with the requirements of subdivision (a) if, within 72
hours after transacting the contract or agreement, the disclosure
form and other information required by subdivision (a) is mailed to
the applicant or insured at the address provided by the applicant or
insured. Proof of mailing shall be established by the method
described in Section 38.
778. As used in this article, "premium financing" means engaging in
the business of advancing money, directly or indirectly, to an
insurer or producer at the request of an insured pursuant to the
terms of a premium finance agreement, wherein the insured has
assigned the unearned premiums, accrued dividends, or loss payments
as security for such advancement in payment of premiums on insurance
contracts only, and does not include the financing of insurance
contract premiums purchased in connection with the financing of goods
and services.
778.1. As used in this article, "premium finance agreement" means a
loan contract, note, agreement, or obligation by which an insured
agrees to pay to a lender in installments the principal amount
advanced by the lender to an insurer or producer in payment of
premium on an insurance contract or contracts, plus charges, with the
assignment, as security therefor, of the unearned premiums, accrued
dividends, or loss payments.
778.2. (a) Any person engaged in business as an insurance agent or
broker and who participates in the arrangement of a premium financing
agreement shall, if he accepts compensation for arranging,
directing, or performing services in connection with the premium
financing agreement, disclose to the insured, in a manner and form
established by the commissioner, the amount of compensation he is to
receive from the premium financer and maintain for three years and
make available to the commissioner a list of accounts in connection
with which he has accepted compensation for premium financing
services showing the amount of such compensation with respect to each
premium financing agreement and with respect to each financing
schedule used by the agent or broker. The requirements of this
subdivision shall not apply with respect to interest paid to the
broker or agent by the premium financer based upon delay in payment
of the premium due the insurer as permitted under subdivision (a) or
(b) of Section 18628 of the Financial Code.
(b) The commissoner shall hold a hearing and adopt by regulation a
standard procedure and form for making the disclosure to the insured
required by subdivision (a).
778.3. The amount of the periodic finance charges, if any, imposed
for the premium financing purchased and the annual percentage rate
associated with those charges shall be disclosed in the policy
itself, or if arranged pursuant to a separate premium financing
agreement in the premium financing agreement itself, and in the
premium finance billings. If the finance charge is a fixed fee,
regardless of the amount of the loan or the balance due, the
disclosure is not required to include the annual percentage rate
associated with those charges. This section shall not apply to any
insurance policy or premium finance billing if the same information
is otherwise disclosed to the insured as required by any other
provision of state or federal law.
778.4. (a) Every fire and casualty broker-agent shall, prior to
arranging premium financing for any new or renewal policy of
insurance specified in Section 660, do all of the following:
(1) Provide the applicant or prospective insured with any
information that is required by the federal Truth in Lending Act (15
U.S.C. Sec. 1601 et seq.).
(2) Obtain the signature of the applicant or prospective insured
on the following disclosure, which shall be in 10-point bold face
type on a separate form or sheet of paper:
Some insurance companies and the California Automobile Assigned
Risk Plan (CAARP) provide the opportunity to make payments on
insurance premiums. Your agent or broker is required to disclose
these options, if any are available for the insurance you are
purchasing. If you choose to enter into a contract that provides for
premium financing, your agent is required by law to make certain
disclosures concerning interest, fees, or other charges. If your
insurance has been financed by any person or business other than your
insurance company, and your insurance is canceled for any reason,
your loan may be subject to continued interest charges, or other
charges that may result from delays by your insurance company in
repaying the premium finance company. You should understand all of
the charges associated with your financing plan. If you are uncertain
about how the financing plan works, you should ask your insurance
agent or broker.
(b) Every fire and casualty agent-broker shall comply with the
requirements of the Consumer Contract Awareness Act of 1990 (Title
1.86 (commencing with Section 1799.200) of Part 4 of Division 3 of
the Civil Code) to the extent that its provisions are applicable to
any transaction subject to this section.
(c) If a transaction subject to subdivision (a) is conducted over
the telephone, the fire and casualty broker-agent shall be deemed to
have complied with the requirements of subdivision (a) if, within 72
hours after transacting the contract or agreement, the disclosure
form and other information required by subdivision (a) is mailed to
the applicant or insured at the address provided by the applicant or
insured. Proof of mailing shall be established by the method
described in Section 38.
