(a) A premium service agreement must:
(1) be at least eight-point type for the printed portion;
(2) be dated and signed by the insured;
(3) contain the name and place of business of the insurance agency or insurance brokerage company negotiating the related insurance contract, the name and residence or the place of business of the insured as specified, the name and place of business of the premium service company to which payments are to be made, a description of the contracts involved, and the amount of the premium; and
(4) contain the following, where applicable, the:
(A) total amount of the premiums;
(B) amount of the down payment;
(C) principal balance, the difference between subitems (A) and (B);
(D) amount of the service charge;
(E) balance payable by the insured, sum of subitems (C) and (D); and
(F) number of installments required, the amount of each installment expressed in dollars, and the due date or period of it.
(b) The subitems provided for in subsection (a)(4) does not need to be stated in the sequence or order in which they appear, and additional subitems may be included to explain the computations made in determining the amount to be paid by the insured.
(c) A premium service contract may include policy premiums, policy fees, agent commissions and fees, premium taxes, inspection fees, charges for motor vehicle (driving record) or property charges and claims history reports, and other automobile related services. All amounts must be disclosed on the premium service agreement. It also may include interest on mitigation loans as approved by the director or his designee. Any interest charges related to mitigation projects or loans must be limited to the legal rate of interest as set forth in Section 34-31-20(B).
(d) If an insurance policy has been financed pursuant to this chapter, an additional premium to that policy or a renewal or extension of that policy may be financed with the same premium service company without the execution of a new premium service agreement. Upon renewal of the insurance policy, the premium service company shall provide to the insured an addendum to or revision of the existing premium service agreement containing the subitems provided for in subsection (a)(4).
(e) Nothing contained in this chapter or in Section 38-55-50 prohibits a licensed agent or broker from charging and collecting an administrative fee of five dollars for originating a premium service agreement, provided that the agent or broker has no ownership interest in the premium service company to which payments are to be made. The amount, if any, must be disclosed on the premium service agreement and must not be considered in any way a charge by the premium service company.
HISTORY: Former 1976 Code Section 38-39-70 [1962 Code Section 37-776; 1971 (57) 744; 1983 Act No. 12] recodified as Section 38-75-370 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-27-80 [1962 Code Section 37-1308; 1967 (55) 273]; Section 38-27-140 [1962 Code Section 37-1314; 1967 (55) 273] recodified as Section 38-39-70 by 1987 Act No. 155, Section 1; 1989 Act No. 148, Section 54; 1993 Act No. 181, Section 653; 2004 Act No. 268, Section 1, eff July 6, 2004; 2015 Act No. 47 (S.666), Section 1, eff June 3, 2015.
Effect of Amendment
2015 Act No. 47, Section 1, in (c), inserted "or property charges" in the first sentence, and added the second sentence, relating to interest on mitigation loans.