(A) If the insured or applicant for insurance fails to pay one or more installments within five days after the due date under any memorandum of the transaction delivered to him by the producer, agency, or producer of record, the producer, agency, or producer of record may call upon the insurer to cancel the policy and refund any unearned premiums on a pro rata basis to the producer, agency, or producer of record in discharge of the lien provided under Section 38-43-410. The insurer, upon paying any refund of unearned premiums accompanied by a statement detailing the computation, a copy of which is mailed to the insured at the address shown in the policy, has no further liability to the insured with respect to the return of unearned premiums.

(B) If there is any other refund of unearned premium resulting from termination of the policy, reduction in the premium, or otherwise, the refund of premium must be made to the producer, agency, or producer of record in recognition of his or its lien, and payment of the refund to the producer, agency, or producer of record by the insurer accompanied by a statement detailing the computation, a copy of which is mailed by the insurer to the insured at the address shown in the policy, except as to errors in the computation, discharges the insurer's obligation to the insured with respect to the refund.

(C) Failure of a producer, agency, or producer of record to declare a default or move to perfect his or its lien because of the insured's failure to pay when due one or more installments of his obligation for premium advanced does not constitute a waiver on the part of the producer, agency, producer of record, or insurer nor is the producer, agency, or producer of record estopped or precluded from asserting and perfecting the lien with respect to any subsequent default nor is the insurer estopped or precluded from recognizing and discharging the lien with respect to the subsequent default.

HISTORY: Former 1976 Code Section 38-43-440 [1947 (45) 322; 1952 Code Section 37-684; 1962 Code Section 37-684] recodified as Section 38-73-520 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-51-440 [1962 Code Section 37-259.11; 1969 (56) 780] recodified as Section 38-43-440 by 1987 Act No. 155, Section 1; 2002 Act No. 323, Section 2, eff January 31, 2003.