6-1410

6-1410. Form of premium finance agreement;
notice

A. A premium finance agreement shall:

1. Be dated and signed by the insured and the printed portion of the agreement
shall be in at least eight point type.

2. Contain the name, place of business and mailing address of the agent or broker
who is negotiating the related insurance contract, the name and residence or mailing
address of the insured as specified by the insured, the name, place of business or
mailing address of the premium finance company, a brief description of the insurance
contract involved and the amount of the premium.

3. Set forth the following items if applicable:

(a) The total amount of the premiums.

(b) The amount of the down payment.

(d) The amount of the interest or discount.

(e) The balance payable by the insured.

(f) The number of installments required, the amount of each installment expressed
in dollars and the due date or period of the installments.

(g) The amount of any service charge and if the charge is refundable.

B. Notwithstanding the provisions of subsection A, paragraph 1, if a premium
finance agreement is for a renewal contract, the agreement may be signed by the insured
or by an authorized person on behalf of the insured. The superintendent may adopt rules
identifying persons authorized to sign premium finance agreements on behalf of the
insured.

C. The licensee may include additional information regarding computations made in
determining the amount to be paid by the insured.

D. The agent or broker who submits the premium finance agreement to the licensee
shall list any managing general agent to whom the submitting agent or broker is required
to pay insurance premiums for the policies listed on the premium finance agreement.

E. If a managing general agent's name and address are listed on a premium finance
agreement submitted to a licensee, the licensee shall notify the managing general agent
that a premium finance agreement has been executed no later than thirty days after the
licensee accepts the premium finance agreement.

F. If an insurer or the managing general agent of an insurer gives notice in
writing that an agent or broker is not authorized to receive premiums on behalf of the
insurer, the licensee shall pay all future monies advanced on policies purchased from the
agent or broker to the insurer or managing general agent of the insurer as directed in
the notice.

G. A licensee or an employee of a licensee shall not pay, allow or offer to pay or
allow any other person to pay valuable consideration or a rebate of any kind which
exceeds a value of ten dollars to an insurer, agent, broker or managing general agent, or
any of its employees, as an inducement to arrange the financing of an insurance policy
providing coverage for an individual, family or household purpose directly or indirectly
either before or after the issuance of the policy. Office equipment loaned for the
purpose of preparing and servicing premium finance agreements or an article of
merchandise not exceeding two dollars in value that bears the advertisement of the
licensee shall not be deemed an inducement or rebate in violation of this
subsection. This subsection does not apply to financing of policies providing coverage
for any entity involved in transactions solely for business purposes.

H. Nothing in this section shall prevent a licensee from purchasing or otherwise
acquiring a premium finance agreement which otherwise conforms to this article in all
respects if the acquisition is from another premium finance company with recourse against
the agent, broker or insurer on such terms and conditions as may be mutually agreed on.

I. No premium finance agreement shall contain any provision by which:

1. In the absence of default of the insured or insolvency of the insurer, the
licensee holding the agreement may, arbitrarily and without reasonable cause, accelerate
the maturing of any part or all of the amount owing under the premium finance agreement.

2. The insured relieves the agent or broker from liability for any legal rights or
remedies which the insured may otherwise have against the agent or broker.

J. A licensee shall comply with title I of the consumer credit protection act (15
United States Code sections 1601 through 1667) and the regulations of the act.