18605-18611

FINANCIAL CODE
SECTION 18605-18611




18605.  A premium finance agreement shall be in writing and the
printed portion thereof shall be in at least eight-point type. The
agreement shall set forth:
   1. The names and addresses of the insured and the company, and the
date of the agreement.
   2. A description of the insurance contracts for which the premiums
are advanced including the total amount of the premiums and fees and
a specific breakdown thereof by policies and a general description
of coverages.
   3. The amount of the downpayment.
   4. The cost, if any, for credit life insurance.
   5. The principal balance.
   6. The finance charges.
   7. The unpaid balance.
   8. The due date of the first installment.
   9. The number, amount and frequency of payment of the
installments.
   10. A statement that the insured may prepay the full amount due
and receive a refund credit of the unearned finance charge, in the
manner provided by Section 18629.



18606.  A premium finance agreement shall not be executed by or on
behalf of the insured when it contains any blank space to be filled
in thereafter; however, if any insurance contract, premiums for which
are advanced or to be advanced under the agreement, has not been
issued at the time of execution and the premium finance agreement so
provides, the name of the insurer, the policy number and the due date
of the first installment may be left blank and inserted later. In
connection with the financing of an additional premium or policies,
upon the completion of the computations necessary to determine the
amount of the revised unpaid balance and the number and amount of
future installment payments, the company shall mail notice of the
changes to the insured at his address shown in the agreement. The
notice of the revised finance agreement shall set forth:
   (a) The unpaid balance, as adjusted.
   (b) The number and frequency of each installment under the revised
finance agreement.
   (c) The amount of each installment.
   (d) A statement to the insured that he may disaffirm the revised
finance agreement by mailing, to the company's office, notice of his
intention to do so within 10 days of the company's mailing of the
notice of the revised finance agreement.
   (e) A statement to the insured that the company may, in the event
he disaffirms, cancel his insurance contract or contracts as provided
in Section 18608, except that the 10-day period required by that
section shall be deemed to commence with the mailing of the notice of
the revised finance agreement.



18607.  Upon receipt of the loan form the company shall promptly
mail to the insured at the address shown in the agreement, or deliver
to the insured personally, either a notice to the effect that the
application for a loan is rejected or a copy of the agreement,
thereby signifying acceptance by the company, or if the agreement
contained any blank space when it was executed by or on behalf of the
insured and such blank space was subsequently filled in, a copy of
the agreement as so filled in and the insured shall in such event
have 10 days in which to disaffirm his obligation under the premium
finance agreement by giving written notice thereof to the producer
and the company. In the event the agreement is not disaffirmed by the
insured, the agreement shall be as binding an obligation of the
insured as if the agreement were complete on its face when it was
executed.


18608.  (a) A premium finance agreement may contain a power of
attorney or other authority enabling the company to cancel the
insurance contract or contracts listed in the agreement in the event
of default in the terms thereof.
   (b) Upon the exercise of such a right to cancel, the company shall
mail to the insured, to his or her last known address or to the
address shown on the premium finance agreement at least 10 days prior
to cancellation, a notice of its intent to cancel the insurance
contract or contracts.
   (c) The liability of a company to any person or corporation upon
the exercise of such a right or authority of cancellation shall be
limited to the amount of the principal balance, except in the event
of willful failure by the company to mail the notice required by this
section.



18609.  All statutory, regulatory and contractual restrictions
providing that the insured or the insurer shall not cancel the
insurance contract unless the insured or the insurer first satisfies
such restrictions by giving a prescribed notice of cancellation to a
governmental agency, the insurer, the insured, the holder of a
security interest in the subject of the insurance, or other
prescribed party, shall not be affected by the provisions of this
division. However, any cancellation notice period required by such
statutory, regulatory or contractual restriction shall not be
cumulative to the period required by Section 18606 or 18608. If
cancellation of the insurance contract is initiated by the company
under the terms of this division, the insurer shall (in accordance
with the requirement for a prescribed notice), on behalf of itself or
the insured, give such notice to the governmental agency, the holder
of a security interest in the subject of the insurance or other
prescribed party; and the insurer shall determine and calculate the
effective date of cancellation (in accordance with the terms of that
prescribed notice) from the date it receives the notice of request
for cancellation from the company. In no instance shall the effective
date of cancellation be prior to that established by the company.



18610.  The insurer within a reasonable time after the effective
date of cancellation shall return whatever gross unearned premiums or
accrued dividends are payable under the insurance contract to the
company, which financed the insurance contract, for the benefit of
the insured. Whenever any funds are received by the company which are
in excess of the amount due to the company, such an excess shall be
remitted promptly to the insured or to his order or to the insurance
agent for the account of the insured.



18611.  At the time of mailing the notice required by Section 18606
or 18608, the employee of the company who is doing the mailing shall
prepare and sign an affidavit setting forth the following:
   (a) The name and address of the employee doing the mailing.
   (b) That the employee is over 18 years of age.
   (c) The date and place of deposit in the mail.
   (d) The addressee's name and address as shown on the envelope
mailed.
   (e) That the envelope weas sealed and deposited in the mail with
the postage thereon fully paid.
   An affidavit of mailing, prepared as prescribed in this section,
shall raise a rebuttable presumption that the notice was mailed to
the addressee stated in the affidavit.