44-4833. Recovery of premiums owed; violation; penalty; appeal.

(1)(a) An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency as shown on the records of the insurer. The liquidator shall also have the right to recover from such person any part of an unearned commission of such person. An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium shall not be obligated to pay the unpaid unearned premium due the insurer at the time of the declaration of insolvency as shown on the records of the insurer, and any such unearned premium in the possession of such agent, broker, premium finance company, or other person at such time shall be returned promptly by such agent, broker, premium finance company, or other person to the insured or other person from whom it was received. Credits or setoffs or both shall not be allowed to an agent, broker, or premium finance company for any amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured.

(b) An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency as shown on the records of the insurer.

(2) Upon satisfactory evidence of a violation of this section, the director may pursue either one or both of the following courses of action:

(a) Suspend, revoke, or refuse to renew the licenses of such offending party or parties; or

(b) Impose a civil penalty of not more than one thousand dollars for each and every act in violation of this section by the party or parties.

(3) Before the director takes any action as set forth in subsection (2) of this section, he or she shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation and fixing a time and place, at least ten days thereafter, when a hearing on the matter shall be held. After such hearing or upon failure of the accused to appear at such hearing, the director, if he or she finds such violation, shall impose the penalties under subsection (2) of this section as he or she deems advisable.

(4) When the director takes action in any or all of the ways set out in subsection (2) of this section, the party aggrieved may appeal from the action to the district court of Lancaster County.

Source