577-A - Premium finance agreements.

§ 577-a.  Premium  finance  agreements.  1.  Any  amount advanced by a  premium finance agency, with  regard  to  any  insurance  policy  issued  pursuant  to  any  plan  established  under  article  fifty-three of the  insurance law shall be paid either by check or draft made payable to the  insurance company, or, if the company is not known, by  check  or  draft  made  payable to the entity which pursuant to the plan established under  article fifty-three of the insurance law designates which insurer  shall  insure or service the risk. The check or draft shall not be made payable  to the insurance agent or broker.    2.  Where  insurance coverage is procured through a wholesale producer  for insurance policies financed with a  premium  finance  agency,  other  than policies subject to subdivision one of this section:    (a) Prior to or contemporaneously with the advancement of any funds to  an  insurance  retail  producer  who  has  procured  an insurance policy  through a wholesale producer, the  retail  producer  shall  provide  the  premium  finance  agency  with  the  name  and  address of the wholesale  producer through whom coverage  was  procured  and,  if  available,  the  policy number of the insurance policy being financed, in writing;    (b) The premium finance agency shall notify, in writing, the wholesale  producer  and the insurance company of the gross premium, the borrower's  name and address, and, if available, the policy number, within ten  (10)  business days of acceptance of the agreement;    (c)  Failure  by  the  retail producer to comply with paragraph (a) of  this subdivision shall be a  violation  of  subsection  (d)  of  section  twenty-one  hundred twenty of the insurance law, and the retail producer  shall be liable for actual damages caused  by  his  or  her  failure  to  disclose;    (d)  For  the  purposes  of  this  subdivision,  a  "retail  insurance  producer" or "retail producer" means an insurance producer who  directly  deals  with  an  insured; a "wholesale insurance producer" or "wholesale  producer" means the producer  from  whom  or  through  whom  the  retail  producer has procured coverage on behalf of the insured.