PARRIS N. GLENDENING, Governor

Ch. 11

A PREMIUM FINANCE AGREEMENT MAY REQUIRE THE INSURED TO PAY A
DELINQUENCY AND COLLECTION CHARGE ON EACH INSTALLMENT THAT IS IN
DEFAULT FOR A PERIOD OF NOT LESS THAN 5 DAYS.

(B)     AMOUNT.

A DELINQUENCY AND COLLECTION CHARGE SHALL BE AT LEAST $1, UP TO A
MAXIMUM OF 5% OF THE INSTALLMENT IN DEFAULT, BUT MAY NOT EXCEED:

(1)      $5, WITH RESPECT TO PRIVATE PASSENGER AUTOMOBILE OR
PERSONAL FIRE OR LIABILITY INSURANCE; AND

(2)      $50, WITH RESPECT TO COMMERCIAL AUTOMOBILE, FIRE, OR
LIABILITY INSURANCE.

(C)     LIMITATION.

ONLY ONE DELINQUENCY AND COLLECTION CHARGE MAY BE COLLECTED ON
AN INSTALLMENT, REGARDLESS OF THE PERIOD DURING WHICH THE INSTALLMENT
REMAINS IN DEFAULT.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 486F(a) through (c).

In the introductory language of subsection (b) of this section, the reference to
the installment "in default" is added for clarity.

Defined terms: "Insurance" § 1-101

"Premium finance agreement" § 23-101

23-307. CANCELLATION CHARGE; REINSTATEMENT CHARGE.

(A)     CANCELLATION CHARGE.

A PREMIUM FINANCE AGREEMENT MAY REQUIRE THE INSURED TO PAY A
CANCELLATION CHARGE IF A DEFAULT IN PAYING AN INSTALLMENT RESULTS IN
THE CANCELLATION OF AN INSURANCE CONTRACT LISTED IN THE PREMIUM
FINANCE AGREEMENT.

(B)     AMOUNT OF CANCELLATION CHARGE.
A CANCELLATION CHARGE SHALL BE:

(1)      WITH RESPECT TO PRIVATE PASSENGER AUTOMOBILE OR
PERSONAL FIRE OR LIABILITY INSURANCE, EQUAL TO THE DIFFERENCE BETWEEN A
DELINQUENCY AND COLLECTION CHARGE IMPOSED UNDER § 23-306 OF THIS
SUBTITLE WITH RESPECT TO THE INSTALLMENT IN DEFAULT AND $10; AND

(2)      WITH RESPECT TO COMMERCIAL AUTOMOBILE, FIRE, OR LIABILITY
INSURANCE, 5% OF THE INSTALLMENT, NOT TO EXCEED $50.

(C)     REINSTATEMENT CHARGE.

IF A NOTICE OF CANCELLATION IS WITHDRAWN BEFORE ITS EFFECTIVE DATE
AND THE INSURANCE COVERAGE IS REINSTATED, THE PREMIUM FINANCE

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