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304.30-110 Cancellation of insurance contract upon default.
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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 canceled by
the premium finance company unless such cancellation is effectuated in
accordance with this section.
Not less than ten (10) days' written notice shall be mailed to the insured of the
intent of the premium finance company to cancel the insurance contract unless
the default is cured within such ten (10) day period.
After expiration of such ten (10) day period, the premium finance company may
thereafter request in the name of the insured, cancellation of such insurance
contract or contracts by mailing to the insurer a notice of cancellation, and the
insurance contract shall be canceled as if such notice of cancellation had been
submitted by the insured himself, 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 his last known address.
All statutory, regulatory, and contractual restrictions providing that the
insurance contract may not be canceled unless notice is given to a
governmental agency, mortgagee, or other third party shall apply where
cancellation is effected under the provisions of this section. The insurer shall
give the prescribed notice in 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 from the premium finance
company and shall determine the effective date of cancellation taking into
consideration the number of days' notice required to complete the cancellation.
Whenever an insurance contract is canceled in accordance with this section,
the insurer shall return whatever gross unearned premiums are due under the
insurance contract to the premium finance company effecting the cancellation
for the account of the insured or insureds.
In the event that the crediting of return premiums to the account of the insured
results in a surplus over the amount due from the insured, the premium finance
company shall refund such excess to the insured provided that no such refund
shall be required if it amounts to less than one dollar ($1).
Effective:June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 30, sec. 11, effective June 18,
1970.
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