6-1416. Return premiums

A. Except as provided in subsection B, if a financed insurance policy is cancelled by any party, the insurer shall return the gross unearned premiums due under the policy directly to the premium finance company for the account of the insured as soon as reasonably possible, but not more than twenty days after the effective date of cancellation of a policy providing insurance coverage for an individual, family or household purpose or not more than forty-five days after the effective date of cancellation of a policy providing insurance coverage for any entity involved in transactions solely for business purposes. The licensee shall maintain a list of all insurers that fail to return gross unearned premiums due under the insurance policy within the period specified by this subsection. The list shall include the name of the insurer, the name of the insured, the applicable insurance policy number, the date of cancellation of the insurance policy and the date the licensee received the gross unearned premium due under the insurance policy.

B. If a financed insurance policy is cancelled by any party in connection with a policy that provides insurance coverage for any entity involved in transactions solely for business purposes in which the policy is subject to an audit to calculate the actual premium of the policy, the insurer shall return any gross unearned premiums due under the policy directly to the premium finance company for the account of the insured as soon as reasonably possible, but not more than forty-five days after the effective date of cancellation. If an audit is required to calculate the actual premium due, the insurer shall notify the licensee not more than forty-five days after the effective date of cancellation and specify the time to complete the audit and make the payment to the licensee. The licensee shall maintain a list of all insurers that fail to return gross unearned premiums due under the insurance policy within the period specified by this subsection. The list shall include the name of the insurer, the name of the insured, the applicable insurance policy number, the date of cancellation of the insurance policy, the final premium determined as a result of the audit and the date the licensee received the gross unearned premium due under the insurance policy.

C. If an insurer returns any unearned premium to a person other than the premium finance company named in the premium finance agreement, the insurer is liable to that premium finance company for any and all unearned premiums due as a result of the cancellation. The insurer shall furnish to the agent or broker placing the insurance a report setting forth an itemization of the unearned premiums under the policy.

D. If the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the licensee shall refund the excess within ten working days of receipt of the return premium by mailing to the agent or broker placing the insurance a check for the excess made payable jointly to the insured and the agent or broker, and shall furnish the agent or broker a report setting forth an itemization of the unearned finance charge and other charges under the premium finance agreement. A refund is not required when the excess due the insured is less than one dollar.

E. On receipt of the refund check from the licensee, the agent or broker shall return any unearned premiums to the insured either in person or by depositing the refund in the mail within ten working days of receipt of the refund.

F. Failure to refund any surplus or return any unearned premium or to furnish any reports required under subsection D shall not invalidate a notice of cancellation given in accordance with this chapter.