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(a) A licensee's premium finance agreement or agreement to extend credit must
(1) be dated and signed by the borrower, and the printed portion of it must be in at least eight-point type;
(2) contain a power of attorney enabling the licensee to cancel the insurance policy listed in the agreement in the name of the borrower if a payment under the agreement is in default;
(3) contain the name and place of business of the licensee negotiating the related insurance policy, the name and residence or the place of business of the borrower as specified by the borrower, the name and place of business of the licensee to whom payments are to be made, an identification of the insurance policy involved, and the amount of the premium charged for the policy; and
(4) set out all of the following items that apply:
(A) the total amount of the premiums;
(B) the amount of the down payment;
(C) the principal balance, calculated as the difference between (A) and (B) of this paragraph;
(D) the annual percentage rate of interest; and
(E) the number of payments required, the amount of each payment expressed in dollars, the payment due date, and the total period of the loan.
(b) The power of attorney required in (a)(2) of this section must provide that, if a payment under the agreement is in default,
(1) the licensee shall give the borrower at least 10 days' written notice, by certified mail addressed to the borrower's last known address, of the licensee's intent to cancel the insurance policy unless the default is cured within that 10-day period;
(2) after expiration of the 10-day period specified in (1) of this subsection, the licensee may, in the name of the borrower, cancel the insurance policy by notifying the borrower, at the borrower's last known address, and the insurer of the cancellation by certified mail; and
(3) all statutory, regulatory, and contractual restrictions providing that the insurance policy may not be canceled unless notice is given to a governmental agency, mortgagee, or other third party will apply if cancellation is effected under this section.
(c) If a licensee requests cancellation under (b)(2) of this section, the insurance policy must be canceled as if the notice of cancellation had been submitted by the borrower, but the return of the insurance policy is not required.
(d) If a statute, regulation, or contractual provision requires notice of cancellation to a governmental agency, mortgagee, or other third party, an insurer shall give notice on behalf of itself or the borrower no later than the fifth business day after the insurer receives the notice of cancellation from the licensee. The insurer shall determine the effective date of cancellation taking into consideration the number of days' notice required by statute, regulation, or contractual provision to complete the cancellation.
(e) The premium finance agreement or agreement to extend credit is not required to set out the items listed in (a) of this section in the order in which they are listed, but may use any logical sequence. The premium finance agreement or agreement to extend credit may include additional items to explain the computations made in determining the amount to be paid by the insured.
(f) The repayment schedule relating to personal insurance, as that term is defined in AS 21.36.310 , must be arranged so that the total amount due the licensee at any time does not exceed the unearned premium on the policy being financed at that time. A deficiency balance may not be established or collected from the borrower. This section does not preclude the licensee from establishing or collecting a deficiency balance to the extent the insurer offsets unearned premiums on the policy financed by premiums earned by reason of endorsements to that same policy not paid for by the insured or financed by the licensee.
(g) The licensee shall deliver a complete copy of the premium finance agreement or agreement to extend credit to the borrower at the time the agreement is executed.
History: Eff. 4/22/79, Register 70; am 3/11/98, Register 145
Authority: AS 21.06.090
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The Alaska Administrative Code was automatically converted to HTML from a plain text format. Every effort has been made to ensure its accuracy, but neither Touch N' Go Systems nor the Law Offices of James B. Gottstein can be held responsible for any possible errors. This version of the Alaska Administrative Code is current through June, 2006.
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Last modified 7/05/2006