6-1415. Cancellation of insurance contract upon
default


A. If a premium finance agreement contains a power of attorney enabling the
licensee to cancel any insurance contract or contracts listed in the agreement, the
insurance contract or contracts shall not be cancelled by the licensee unless the
cancellation is in accordance with this section.


B. The licensee shall mail written notice to the insured at his last known address
as shown on the records of the licensee not less than ten days in advance to notify the
insured of its intent to cancel the insurance contract unless the default is cured within
the ten day period.


C. After expiration of the ten day period, the licensee may cancel the insurance
contract or contracts by mailing a notice of cancellation to the insurer. The insurance
contract shall be cancelled as if the notice of cancellation had been submitted by the
insured himself but without requiring the return of the insurance contract. The licensee
shall also mail a notice of cancellation to the insured at his last known address as
shown on the records of the licensee. If the provisions of subsection D do not apply to
the cancellation of coverage, the effective date of cancellation under this subsection is
the date on which the licensee mails a notice of cancellation to the insurer and the
insured. The licensee shall maintain a log or any other record that documents compliance
with this section.


D. If statutory, regulatory and contractual restrictions provide that the insurance
contract may not be cancelled unless notice is given to a governmental agency, mortgagee
or other third party, the insurer shall give the prescribed notice on behalf of itself or
the insured to any governmental agency, mortgagee or other third party on or before the
fifth business day after the day it receives the notice of cancellation from the
licensee. The effective date of cancellation under this subsection shall be as stated in
the insurance policy. The insurer shall maintain a log or any other record that
documents its receipt of any notice from a licensee as provided by this section.