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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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