Sec. 38a-170. (Formerly Sec. 38-300). Cancellation of insurance contract on default of insured.
Sec. 38a-170. (Formerly Sec. 38-300). Cancellation of insurance contract on
default of insured. (a) When an insurance premium finance agreement contains a power
of attorney enabling the insurance premium finance company to cancel any insurance
contract or contracts listed in the agreement on account of any default on the part of
the insured, the insurance contract or contracts shall not be cancelled by the insurance
premium finance company unless such cancellation is effectuated in accordance with
the provisions of this section.
(b) Not less than ten days' written notice shall be mailed by first class mail to the
insured, at his last known address, of the intent of the insurance premium finance company to cancel the insurance contract unless the default is cured within such ten-day
period.
(c) After expiration of such ten-day period, the insurance premium finance company
may 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
may be cancelled 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
insurance premium finance company shall also mail, by first class mail, a notice of
cancellation to the insured at his last-known address.
(d) All statutory, regulatory, and contractual provisions or restrictions providing
that the insurance contract may not be cancelled 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 such 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 insurance premium finance company and shall determine the effective date of
cancellation taking into consideration the number of days notice required to complete
the cancellation.
(e) Whenever an insurance contract is cancelled in accordance with the provisions
of this section, the insurer shall return whatever gross unearned premiums are due under
the insurance contract to the insurance premium finance company effecting the cancellation for crediting to the account of the insured.
(f) 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 to the insurance premium
finance company, such company shall refund such excess to the insured, provided no
such refund shall be required if the surplus amounts to less than one dollar.
(1971, P.A. 425, S. 11.)
History: Sec. 38-300 transferred to Sec. 38a-170 in 1991.
Cited. 239 C. 658.
Cancellation refers to contract and not specific coverage provisions within contract. 54 CA 77.