Ch. 708

1997 LAWS OF MARYLAND

23-402.

(a)     At least 10 days before canceling an insurance contract, a premium finance
company shall DELIVER OR mail to the insured written notice of intent to cancel the
insurance contract unless the defaulted installment payment is received within the 10-day
notice period.

(b)     For an automobile liability insurance contract, the notice of intent to cancel
shall include a statement in clear and specific terms that if the insured fails to replace the
automobile liability insurance within the 10-day notice period, § 17-106 of the
Transportation Article provides that uninsured motorist penalties be assessed and that all
evidences of registration be surrendered to the Motor Vehicle Administration and that
failure to surrender the evidences of registration may result in suspension of current and
future registration privileges.

(C) WITH RESPECT TO COMMERCIAL AUTOMOBILE, FIRE, OR LIABILITY
INSURANCE, THE PREMIUM FINANCE COMPANY SHALL DELIVER THE NOTICE IN
ACCORDANCE WITH THE INSUREDS REQUEST UNDER § 23401.1 (B) OF THIS SUBTITLE.

23-403.

(a)     (1) After the end of the notice period under § 23-402(a) of this subtitle, the
premium finance company may cancel the insurance contract by submitting to the insurer
a notice of cancellation that specifies the effective date of the cancellation.

(2) (I) The premium finance company shall DELIVER OR DELIVER OR
mail a copy of the notice of cancellation to the insured at the last known address of the
insured.

(II) WITH RESPECT TO COMMERCIAL AUTOMOBILE. FIRE. OR
LIABILITY INSURANCE THE PREMIUM FINANCE COMPANY SHALL DELIVER THE
NOTICE IN ACCORDANCE WITH THE INSURED'S REQUEST UNDER § 23-401.(B) OF
THIS SUBTITLE.

(b)     (1) If the insurer receives a notice of cancellation issued under subsection
(a) of this section within 30 days after the effective date of cancellation specified in the
notice, the INSURER SHALL CANCEL THE insurance contract [shall be canceled]
effective on the date specified in the notice, AS IE THE INSURED HAD REQUESTED THE
CANCELLATION, AND WITHOUT REQUIRING THE RETURN OF THE INSURANCE
CONTRACT OR FURTHER NOTICE TO THE INSURED.

(2)     Subject to paragraph (3) of this subsection, if the insurer receives a
notice of cancellation issued under subsection (a) of this section more than 30 days after
the effective date of cancellation specified in the notice, the insurance contract shall be
canceled effective on the date the insurer receives the notice.

(3)     If a premium finance company fails to meet the 30-day notice
requirement under paragraph (1) of this subsection because the installment payment of
the insured is dishonored after the effective date specified in the notice of cancellation,
the dishonored payment is ineffective and the insurer may waive the 30-day notice
requirement.

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