(a) No insurance premium finance company shall charge, contract for, receive or collect any service charge in respect of any consumer insurance premium finance agreement except as permitted under the provisions of subsection (b) of this section.
(b) The service charge shall be computed (i) on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the insurance premium finance agreement, from the effective date of the insurance coverage for which the premiums are being advanced to and including the date when the final installment under the insurance premium finance agreement is payable, and (ii) at a maximum rate of fifteen per cent per annum for such period, plus an additional charge of ten dollars for each insurance premium finance agreement, which additional charge need not be refunded upon cancellation or prepayment of the agreement.
(c) An insurance premium finance company may charge, contract for, receive and collect a service charge of any amount which is agreed to by it and any insured or prospective insured with respect to any insurance premium finance agreement which is not a consumer insurance premium finance agreement.
(1971, P.A. 425, S. 9; P.A. 80-87, S. 1, 2; P.A. 81-346; P.A. 83-110; P.A. 85-48; P.A. 87-151; P.A. 90-38, S. 2, 3.)
History: P.A. 80-87 raised maximum service charge from 12% to 16% “until January 1, 1982,” allowed 18% charge if balance is $2,500 or more and added provision re maximum rate to be charged on and after January 1, 1982, in Subsec. (b); P.A. 81-346 amended Subsec. (b), extending the date within which an insurance premium finance company may compute the maximum rate for service charges from January 1, 1982, to January 1, 1984; P.A. 83-110 amended Subsec. (b) to extend the maximum rate of 16% from January 1, 1984, to January 1, 1986; P.A. 85-48 amended Subsec. (b) to extend the maximum rate of 16% from January 1, 1986, to January 1, 1988; P.A. 87-151 amended Subsec. (b) to set a maximum rate of 15% for service charge; P.A. 90-38 amended Subsec. (a) to require “consumer” insurance premium finance agreements to conform to the requirements of Subsec. (b) and added a new Subsec. (c) re service charge for nonconsumer insurance premium finance agreements; Sec. 38-298 transferred to Sec. 38a-168 in 1991.
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