PARRIS N. GLENDENING, Governor

S.B. 751

(2) compute the effective date of cancellation from the day the insurer
receives the notice of cancellation from the premium finance company.

23-405.

(a)     (1) Whenever an insurance contract is canceled in accordance with this
subtitle, the insurer shall return any gross unearned premiums that are due under the
insurance contract, less agents' earned commissions, to the premium finance company for
the account of the insured within a reasonable time not exceeding [60] 45 days after:

(i) receipt by the insurer of [the] A WRITTEN notice of cancellation
FROM THE PREMIUM FINANCE COMPANY; or

(ii) completion of any payroll audit necessary to determine the amount
of premium earned while the insurance contract was in force.

(2)     A RETURN PREMIUM SHALL BE SUBJECT TO ANY MINIMUM EARNED
PREMIUM STATED IN THE INSURANCE CONTRACT.

(3)     An audit under paragraph (1)(ii) of this subsection shall be performed
within [60] 45 days after the insurer receives the notice of cancellation.

(b)     (1) [After the insurer returns to the premium finance company any gross
unearned premiums that are due under the insurance contract, the premium finance
company shall refund to the insured the amount of unearned premium that exceeds any
amount due under the premium finance agreement.] IF CREDITING OF RETURN
PREMIUMS TO TUT: ACCOUNT OF THE INSURED CAUSES A SURPLUS OVER THE
AMOUNT DUE FROM THE INSURED, THE PREMIUM FINANCE COMPANY SHALL
REFUND THE SURPLUS TO THE INSURED AS SOON AS REASONABLY POSSIBLE NOT
EXCEEDING 15 BUSINESS DAYS AFTER THE PREMIUM FINANCE COMPANY RECEIVES
ALL RETURN PREMIUMS.

(2) A premium finance company need not make a refund to the insured if
the amount of the refund would be less than $5.

23-406.

Whenever an insurance contract is canceled in accordance with this subtitle, the
premium finance company may not collect from an insured an amount due under the
premium finance agreement that is less than $5.

23-501.

A premium finance company, or an agent or producer BROKER, if applicable, may
not require an insured or prospective insured to purchase or finance add-on coverage, as
defined in § 20-504 of this article, as a condition of financing the premium for an
insurance contract issued by the Maryland Automobile Insurance Fund.

23-502.

A person may not pay any part of an initial service fee or any other fee or charge to
an agent, broker, employee of an agent or broker, or to any other person as an
inducement to financing an insurance contract with a premium finance company.

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