20-1632. Cancellation, nonrenewal and
reduction of limits for reasons other than nonpayment of premium;
notices to insured; refund of unearned premium
A. A notice by the insurer to the policyholder of nonrenewal, cancellation or
reduction in the limits of liability or coverage for reasons other than nonpayment of
premium shall be mailed to the named insured by certified mail or United States post
office certificate of mailing at least ten days prior to the effective date of such
nonrenewal, cancellation or reduction in limits of liability or coverage, except that
notice of nonrenewal under section 20-1631, subsection E shall be mailed at least
forty-five days before the effective date of the nonrenewal. Such notice shall include
or be accompanied by all of the following:
1. A statement in writing of the specific facts which constitute the reasons,
consistent with section 20-1631, for such action by the insurer and a notice indicating
the named insured's right to complain to the director of the insurer's action within ten
days after receipt of the notice by the insured.
2. Notice of the insured's possible eligibility for insurance through the
automobile assigned risk plan, and the notice shall state that all information included
in the notice is given pursuant to this article.
3. A refund of unearned premium, except a premium that has been financed or
remitted to the insurer by a company that is affiliated with the insurer and that bills
and collects premiums on the insurer's behalf. In the case of a notice of cancellation or
nonrenewal of a policyholder whose premium payment is collected and remitted by the
insurer's affiliate, the insurer shall refund any unearned premium to the policyholder
within ten days after the policy cancellation. For the purposes of this paragraph,
"affiliate" and "affiliated" have the same meaning prescribed in section 20-481.
B. Failure of the insurer to comply with subsection A of this section shall
invalidate any cancellation, nonrenewal or reduction in limits of liability or coverage.
C. If a premium has been financed, a refund of unearned premium shall be returned
as provided in section 6-1416.
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