(d) (B) No premium finance company shall induce an insured to
become obligated under more than one (1) premium finance agree-
ment for the purpose of obtaining more than one (1) [minimum]
initial service charge.

486E.

A premium finance agreement may provide for the payment by the
insured of a delinquency and collection charge on each installment
in default for a period of not less than five (5) days in an amount
of one dollar ($1.00) to a maximum not to exceed five per cent
(5%) of such installment or five dollars ($5.00), whichever is less,
provided that only one such delinquency and collection charge may
be collected on any such installment regardless of the period during
which it remains in default; and if the default results in the can-
cellation of any insurance contract listed in the agreement, the
agreement may provide for the payment by the insured of a can-
cellation charge equal to the difference between any delinquency and
collection charge imposed in respect to the installment in default
and five dollars ($5.00) [.]; provided, however, that should the
cancellation notice be withdrawn prior to its effective date and the
insurance coverages reinstated, the agreement may provide for pay-
ment by the insured of the same charges provided for above where
the cancellation is actually effected.

486F.

(a)    When in connection with a premium finance agreement, a
power of attorney or other authority to cancel any insurance con-
tract or contracts on behalf of the insured is given to a premium
finance company, the insurance contract or contracts may not be
cancelled by the premium finance company unless such cancellation
is effectuated in accordance with the following provisions:

(b)     Not less than ten (10) days written notice shall be mailed
to the insured of the intent of the premium finance company to
cancel the insurance contract or contracts unless the defaulted in-
stallment payment is received within said ten (10) day period.

(c)     After expiration of such ten (10) day period, the premium
finance company may thereafter cancel by mailing to the insurer a

1336

LAWS OF MARYLAND

[CH. 844

in advance, upon the entire amount advanced, payable in install-
ments. In addition to the above service charge insurance premium
finance companies shall be permitted to charge an initial service
charge of not over ten dollars ($10.00) which need not be refunded
upon cancellation or prepayment.

(b) [Except for the maximum and minimum service charges as
provided in subsection (a),] Such service charge shall be computed
on the balance payable in successive monthly installments substan-

tially equal in amount for a period of one (1) year. On a premium
finance agreement providing for installments extending for a period

less than or greater than one (1) year, the service charge shall be

computed proportionately.

(c) When a premium finance agreement provides for unequal or
irregular installments, the service charge shall be computed at the

effective rate provided for in Subsection (a), having due regard for

the schedule of installments.