(a) An insurance premium finance company shall not charge, contract for, receive, or collect any interest or discount charges at a rate in excess of that provided in § 6-26-2.
(b) Interest on any insurance premium finance agreement is to be computed on the balance of the premium or premiums due, after subtracting the down payment made by the insured in accordance with the agreement, from the effective date of the insurance contract, for which the premium or premiums is or are being advanced, to and including the date when the final installment provided for in the agreement is due and payable. The interest so provided for by this chapter anticipates timely repayment, in consecutive equal monthly installments, for a period of one year. With respect to contractual arrangements for repayment in greater or lesser periods, or in unequal, irregular, or other than monthly installments, interest may be computed at an equivalent effective rate, likewise, having due regard for timely payments of installments.
(c) A service charge of fifteen dollars ($15.00) per insurance premium finance agreement, which need not be refunded upon cancellation or prepayment, may be imposed as long as the imposition of said service charge does not cause the total charges provided for in the agreement to exceed that specified in § 6-26-2.
(d) Notwithstanding the provisions of any agreement, an insured may prepay the obligation in full at any time. In that event, the insured shall receive a refund credit. (The refund credit shall represent at least as great a proportion of the interest as the sum of the periodic balances following the month in which prepayment is made bears the sum of all periodic balances under the schedule of installments in the agreement.) If the amount of a refund credit is less than one dollar ($1.00), no actual refund need be made.
History of Section.
P.L. 2003, ch. 79, § 4; P.L. 2003, ch. 82, § 4.