3 AAC 23.310. Service charge; maximum interest rate

(a) A licensee entering into a premium finance agreement or agreement to extend credit may charge, contract for, receive, or collect a service charge only as permitted by this section.

(b) The service charge may not exceed a simple interest equivalent annual rate of 15 percent, plus an additional, nonrefundable charge of no more than $10 per premium finance agreement or agreement to extend credit. Unless computed under (c) of this section, the service charge must be computed on the balance of the premiums due, after subtracting the down payment made by the borrower, from the effective date of the insurance coverage for which the premiums are being advanced, to and including the date when the final payment of the premium finance agreement or agreement to extend credit is payable.

(c) If the service charge is computed monthly, the interest rate may not exceed 1.25 percent per month on the unpaid principal balance. The unpaid principal balance does not include the unpaid interest balance or any other unpaid charges.

History: Eff. 4/22/79, Register 70; am 3/11/98, Register 145

Authority: AS 21.06.090

AS 21.36.122

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