2013 Maryland Code
INSURANCE
§ 23-403 - Cancellation of insurance contract

§23-403.

(a) (1) After the end of the notice period under § 23-402(a) of this subtitle, the premium finance company may cancel the insurance contract by submitting to the insurer a notice of cancellation that specifies the effective date of the cancellation.

(2) (i) The premium finance company shall deliver or mail a copy of the notice of cancellation to the insured at the last known address of the insured.

(ii) With respect to commercial automobile, fire, or liability insurance, the premium finance company shall deliver the notice in accordance with the insured’s request under § 23-401.1 of this subtitle.

(b) (1) If the insurer receives a notice of cancellation issued under subsection (a) of this section within 30 days after the effective date of cancellation specified in the notice, the insurer shall cancel the insurance contract effective on the date specified in the notice.

(2) Subject to paragraph (3) of this subsection, if the insurer receives a notice of cancellation issued under subsection (a) of this section more than 30 days after the effective date of cancellation specified in the notice, the insurance contract shall be canceled effective on the date the insurer receives the notice.

(3) If a premium finance company fails to meet the 30-day notice requirement under paragraph (1) of this subsection because the installment payment of the insured is dishonored after the effective date specified in the notice of cancellation, the dishonored payment is ineffective and the insurer may waive the 30-day notice requirement.

(c) A cancellation under this section shall be made as if the notice of cancellation had been submitted by the insured, but without requiring the return of the policy.

§ 23-403 - 1. Effect of dishonored down payment

If, within 15 business days after the date of written notice from a financial institution that the initial down payment for the coverage being financed has been dishonored, an insurer receives notice of the dishonor from an insurance producer or premium finance company, there is no valid insurance contract or insurance contracts, and the policy shall be voided.