(a) When an insurance premium finance agreement contains a power of attorney enabling the company to cancel an insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled by the company unless the cancellation is effectuated in accordance with this section.
(b) Not less than ten (10) days written notice shall be mailed to the insured, at his or her last known address, as shown on the records of the company, of the intention of the company, to cancel the insurance contract or contracts unless the default is removed within the ten-day (10) period.
(c) After expiration of the ten-day (10) period, the company may cancel the insurance contract or contracts by mailing to the insurer a notice of cancellation. The insurance contract or contracts shall be cancelled as if notice of cancellation had been submitted by the insured personally, but without requiring return of the insurance contract or contracts. The company shall also mail a notice of cancellation to the insured at his or her last known address as shown on the records of the company. The insurance contract or contracts shall be cancelled by the insurer on a pro rata basis.
(d) All statutory, regulatory, and contractual restrictions providing that an insurance contract may not be cancelled unless notice be given to a particular governmental agency, mortgagee, or other third party shall be applicable to any cancellation effected under the provisions of this section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee, or other third party on or before the second business day after the day it receives notice of cancellation from the company, and shall determine the effective date of cancellation, taking into consideration the number of days' notice required to complete the cancellation.
History of Section.
P.L. 2003, ch. 79, § 4; P.L. 2003, ch. 82, § 4.