Ch. 328                                     1993 LAWS OF MARYLAND

CHAPTER 328
(House Bill 718)

AN ACT concerning

Premium Finance Companies - Refunds of Unearned Premium

FOR the purpose of requiring a premium finance company to refund to the insured
certain amounts of unearned premium under certain circumstances; providing for a
certain exception to the refund requirement; prohibiting a premium finance
company from collecting from the insured amounts due under a premium finance
agreement if it is less than a certain amount; and generally relating to the refund by
a premium finance company to the consumer of certain amounts of unearned
premium.

BY repealing and reenacting, with amendments,
Article 48A - Insurance Code
Section 486G

Annotated Code of Maryland
(1991 Replacement Volume and 1992 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 48A - Insurance Code

486G.

(a)     When in connection with a premium finance agreement, a power of attorney
or other authority to cancel any insurance contract 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 installment 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 notice of cancellation, specifying the
effective date of such cancellation, and the premium finance company shall mail a copy of
the cancellation notice to the insured at his last known address. No policy may be
cancelled by the holder of a power of attorney because the delinquency and collection
charge as provided in § 486F has not been paid.

(d)     (1) If the insurer receives a copy of a cancellation notice issued under
subsection (c) of this section within 30 days after the effective date of cancellation
specified in the notice, the insurance contract shall be cancelled effective as of the date
specified in the notice.

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