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PARRIS N. GLENDENING, Governor
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S.B. 335
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Article - Insurance
Section 23-306 and 23-307
Annotated Code of Maryland
(1997 Volume and 2001 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:
Article - Insurance
23-306.
(a) 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) 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] $10 $8, with respect to private passenger automobile or personal
fire or liability insurance; and
(2) $100, with respect to commercial automobile, fire, or liability
insurance.
(c) Only one delinquency and collection charge may be collected on an
installment, regardless of the period during which the installment remains in default.
23-307.
(a) 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) 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] *30 $15; and
(2) with respect to commercial automobile, fire, or liability insurance, 5%
of the installment, not to exceed an amount 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 $100.
(c) If a notice of cancellation is withdrawn before its effective date and the
insurance coverage is reinstated, the premium finance agreement may require the
insured to pay a reinstatement charge in the same amount as the cancellation charge
that would have been paid if the cancellation had actually taken effect.
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SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2002.
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- 4531 -
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