CHAPTER 8. Insurance Premium Financing [18560. - 18643.]
Chapter 8 added by Stats. 1976, Ch. 964.
§§ 18560–18643 · 47 sections
ARTICLE 1. Definitions §§ 18560–18567 · 8 sections
- § 18560 “Premium finance agency” means any industrial loan company incorporated under this division which, by the terms of its authority to engage in the industrial…
- § 18561 Such terms relating to insurance as are used in this chapter shall have the meaning ascribed to them in the Insurance Code and in the practices of the…
- § 18562 As used in this chapter, “insured” means the person who has purchased or arranged to purchase an insurance contract and who enters into a premium finance…
- § 18563 As used in this chapter, “premium financing” means the activities of a company engaging in the business of advancing money directly or indirectly to an insurer…
- § 18564 As used in this chapter, “premium finance agreement” means a loan contract, note, agreement or obligation by which an insured agrees to pay to a company in…
- § 18565 As used in this chapter, “company” means a premium finance agency.
- § 18566 As used in this chapter, “principal balance” means the difference between the amount of the premium and fees charged by the insurer or producer and the…
- § 18567 As used in this chapter, “finance charge” means any amount which the insured agrees to pay the company in excess of the premium and fees charged by the insurer…
ARTICLE 2. General §§ 18580–18596 · 17 sections
- § 18580 A premium finance agency desiring the full authority which may be conferred by this division, shall, in respect to any lending operations other than insurance…
- § 18581 The articles of incorporation of any corporation organized under this division as a premium finance agency shall include reference to that fact.
- § 18582 Capital stock of any premium finance agency shall not be less than seventy-five thousand dollars ($75,000) and need not exceed that sum regardless of the…
- § 18583 Before a premium finance agency commences business or opens a branch office or place of business, there must be paid in cash, for the benefit of the agency,…
- § 18584 An insurance premium finance agreement, as defined in Section 18564, may be prepared in the office of an insurance producer licensed by the Department of…
- § 18585 In the event of any conflict in the provisions of this chapter with the provisions of any other chapter in this division, the provisions of this chapter shall…
- § 18586 The provisions of Sections 18023, 18024, 18120, 18205, 18268, 18269, 18271, 18272, 18274, and 18455 shall not apply to a premium finance agency.
- § 18587 The provisions of Sections 18607, 18625, and 18626 shall not apply to any bona fide loan with a principal amount of two thousand five hundred dollars ($2,500)…
- § 18588 Unless the insured has notice of the assignment of a premium finance agreement, payment thereunder by him to the last known assignee of the agreement shall be…
- § 18589 At any time during the term of the premium finance agreement, but not later than one year after the last payment thereunder, the company shall upon written…
- § 18590 Upon payment of a loan in full the company upon request shall return the premium finance agreement marked “Paid” to the insured.
- § 18591 No filing of the premium finance agreement shall be necessary to perfect the validity of such agreement as a secured transaction as against creditors,…
- § 18592 Any downpayment which is made and which is received by the company from the insured, or from the insurance producer on behalf of the insured, shall be held by…
- § 18593 The downpayments received by the company under the provisions of Section 18592, may be held by the company in trust in a separate bank account or depository,…
- § 18594 Any corporation organized as an industrial loan company other than a premium finance agency shall conduct any insurance premium financing business under the…
- § 18595 A premium finance agency shall not incorporate the words “industrial loan company” in its corporate name, on its loan forms, or in its advertising.
- § 18596 A premium finance company may issue or sell investment certificates only (a) to its customers directly in connection with the financing of premiums for those…
ARTICLE 3. Provisions of Premium Finance Agreements §§ 18605–18611 · 7 sections
- § 18605 A premium finance agreement shall be in writing and the printed portion thereof shall be in at least eight-point type. The agreement shall set forth: 1. The…
- § 18606 A premium finance agreement shall not be executed by or on behalf of the insured when it contains any blank space to be filled in thereafter; however, if any…
- § 18607 Upon receipt of the loan form the company shall promptly mail to the insured at the address shown in the agreement, or deliver to the insured personally,…
- § 18608 (a) A premium finance agreement may contain a power of attorney or other authority enabling the company to cancel the insurance contract or contracts listed in…
- § 18609 All statutory, regulatory and contractual restrictions providing that the insured or the insurer shall not cancel the insurance contract unless the insured or…
- § 18610 The insurer within a reasonable time after the effective date of cancellation shall return whatever gross unearned premiums or accrued dividends are payable…
- § 18611 At the time of mailing the notice required by Section 18606 or 18608, the employee of the company who is doing the mailing shall prepare and sign an affidavit…
ARTICLE 4. Limitation on Finance Charges §§ 18625–18631 · 7 sections
- § 18625 A premium finance agency shall not, except as otherwise provided by law, impose, take, receive, reserve or charge a finance charge which in the aggregate is…
- § 18626 A premium finance agency may, in a premium finance agreement, contract for, charge, receive, and collect a finance charge which shall not exceed in the…
- § 18627 If the finance charge computed under Section 18626 is less than twenty-five dollars ($25), a minimum finance charge of twenty-five dollars ($25) may be imposed.
- § 18628 The finance charge may be computed from the effective date of the insurance coverage, provided that the company shall pay the premium due the insurer, either:…
- § 18629 Notwithstanding the provisions of any premium finance agreement to the contrary, any insured may pay the obligation in full at any time before maturity of the…
- § 18630 In the event that the insurance policy or policies which are the subject of a premium finance agreement are canceled by the insured or by the insurer, for any…
- § 18631 (a) A premium finance agreement may provide for the payment of a default charge of one dollar ($1) to a maximum of 5 percent of the delinquent installment, in…
ARTICLE 5. Charges on Scheduled Balances §§ 18634–18643 · 8 sections
- § 18634 This article is applicable only to premium finance agencies.
- § 18635 Whenever the interest or charges, or interest and charges deducted in advance exceed the maximum provided by this division, by reason of subsequent repayment…
- § 18636 (a) As an alternative to the provisions of Section 18635, if a loan is repayable in substantially equal and consecutive monthly installments of principal and…
- § 18637 If a loan contract made under Section 18636 is prepaid in full by cash, a new loan, refinancing or otherwise before the final installment date, the borrower…
- § 18638 A special rebate of precomputed charges shall be made if three or more, but not all, installments are prepaid in full at any one time either in one transaction…
- § 18640 A deferment charge may be charged and collected on a loan made under Section 18636 if the payment date of all wholly unpaid installments on which no default…
- § 18642 If the maturity of a loan made under Section 18636 is accelerated for any reason, the company shall make the same refund or credit as would be required if the…
- § 18643 Notwithstanding any other provision of law not within this article, with respect to precomputed loans, premium finance agencies derive authority only from this…