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When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled by the premium finance company unless the cancellation is effectuated in accordance with this section.
Not less than ten (10) days' written notice shall be mailed to the insured, at the insured's last known address as shown on the records of the premium finance company, of the intent of the premium finance company to cancel the insurance contract unless the default is cured within the ten-day period; provided, that if a default results from the refusal of a bank to honor a loan repayment check, the default shall be treated as a request of the insured for cancellation and the premium finance company shall not be required to provide an additional ten (10) days' written notice to the insured.
After expiration of the ten-day period, the premium finance company may thereafter cancel the insurance contract or contracts by mailing to the insurer a notice of cancellation. The insurance contract shall be cancelled as if the notice of cancellation had been submitted by the insured, but without requiring the return of the insurance contract or contracts. The premium finance company shall also mail a notice of cancellation to the insured at the insured's last known address as shown on the records of the premium finance company.
All statutory, regulatory and contractual restrictions providing that the insurance contract may not be cancelled unless notice is given to a governmental agency, mortgagee or other third party shall apply where cancellation is effected under 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 the notice of cancellation, taking into consideration the number of days' notice required to complete the cancellation.