An Act to amend the Fire and Casualty Act to provide for the licensing and regulation of insurance premium finance companies in the District of Columbia
PL 89-403 (H.R.8466), enacted 04/18/1966

126 
PUBLIC LAW 89.403-APRIL 18, 1966 
[80 STAT. 
Public Law 89-403 
April 18, 1966 
^^ 
ACT 
[H. R. 8466] 
To amend the Fire and Casualty Act to provide for the licensing and regulation 
of insurance premium finance companies in the District of Columbia. 
Be it enacted hy the Senate and House of Representatives 
of the 
United /States of America in Congress assembled, That the Fire and 
complies'.""'"" 
Casualty Act (D.C. Code, sees. 35-1301—35-1350) is amended by add-
Licensing and 
jj^ff at the cnd thereof the following new chapter: 
regulation. 
o
x 
D.C. insurance 
premium finance 
54 Stat. 1063. 
78 Stat. 675. 
"CHAPTER III—INSURANCE PREMIUM 
FINANCE 
COMPANIES 
"SEC. 51. APPLICATION.—The provisions of this chapter shall not 
apply with respect to (A) any insurance company licensed to do busi-
ness in the District, (B) any banking institution, trust, loan, mort-
gage, safe deposit, or title company, building association, credit union, 
moneylenders, or common trust fund authorized to do business in the 
District, (C) the inclusion of a charge for insurance in connection 
with an installment sale of a motor vehicle made in accordance with 
7
4 Stat. 69. 
the Act of April 22, 1960 (D.C. Code, sees. 40-901—40-910), or (D) 
the financing of insurance premiums in the District in accordance 
with the provisions of sections 28-3301 and 28-3302 of the District 
of Columbia Code relating to rates of interest. 
"SEC. 52. DEFINITIONS.—For the purposes of this chapter— 
"(1) The term 'insurance premium finance company' means a 
person engaged in the business of entering into insurance premium 
finance agreements. 
" (2) The term 'premium finance agreement' means an agreement 
by which an insured or prospective insured promises to pay to a 
premium finance company the amount advanced or to be advanced 
under the agreement to an insurer or to an insurance agent or 
broker in payment of premiums on an insurance contract together 
with a service charge as authorized and limited by this chapter. 
"(3) The term 'licensee' means a premium finance company 
holding a license issued by the Superintendent under this chapter. 
"SEC. 53. LICENSES.—(a) No person shall engage in the business of 
financing insurance premiums in the District without first having 
obtained a license as a premium finance company from the Superin-
tendent. 
Any person who shall engage in the business of financing 
insurance premiums in the District without obtaining a license as 
provided hereunder shall, upon conviction in the District of Columbia 
Court of General Sessions, be guilty of a misdemeanor and shall be 
subject to the penalties provided in section 43 of this Act. 
1
3
4
V
T """" 
"(b) The annual license fee shall be $50. Licenses may be renewed 
License fee. 
from year to year as of the first day of May of each year upon payment 
of the fee of $50. The fee for said license shall be paid through the 
Superintendent to the District of Columbia Treasurer. 
"(c) The person to whom the license or the renewal thereof may 
be issued shall file sworn answers, subject to the penalties of perjury, 
to such interrogatories as the Superintendent may require. 
The 
Superintendent shall have authority, at any time, to require the 
applicant fully to disclose the identity of all stockholders, partners, 
officers, and employees and he may, in his discretion, refuse to issue 
or renew a license in the name of any firm, partnership, or corporation 
if he is not satisfied that any officer, employee, stockholder, or partner 
thereof who may materially influence the applicant's conduct meets 
the standards of this chapter. 
54 Stat. 1082. 
D.C. Code 35 
License issu-
ance or renev^al. 
80 STAT. ] 
PUBLIC LAW 89-403-APRIL 18, 1966 
127 
"SEC. 5J:. Acxiox BY SUPERINTENDENT ON APPLICATION.—(a) Upon 
the filing of an application and the payment of the license fee the 
Superintendent shall make an investigation of each applicant and 
shall issue a license if the applicant is qualified in accordance with this 
chapter. 
If the Superintendent does not so find, he shall, within 
Hearing. 
thirty days after he has received such application, at the request of the 
applicant, give the applicant a full hearing. 
"(b) The Superintendent shall issue or renew a license as may be ^ ^^ 
applied for when he is satisfied that the person to be licensed— 
proJisi'on's 
"(1) is competent and trustworthy and intends to act in good 
faith in the capacity involved by the license applied for, 
"(2) has a good business reputation and has had experience, 
training, or education so as to be qualified in the business for 
which the license is applied for, and 
"(3) if a corporation, is a corporation incorporated under the 
laws of the District or a foreign corporation authorized to transact 
business in the District. 
"SEC. 
55. REVOCATION AND SUSPENSION OF LICENSES.— (a) 
The 
Superintendent may revoke or suspend the license of any premium 
finance company when and if after investigation it appears to the 
Superintendent that— 
" ^1) any license issued to such company was obtained by fraud, 
" (2) there was any misrepresentation in the application for the 
license, 
"(3) the holder of such license has otherwise shown himself 
untrustworthy or incompetent to act as a premium 
finance 
company, 
"(4) such company has violated any of the provisions of this 
chapter, or 
" (5) such company has been rebating part of the service charge 
as allowed and permitted herein to any insurance agent or any 
employee of an insurance agent or to any other person as an 
inducement to the financing of any insurance policy with the 
premium finance company. 
"(b) Before the Superintendent shall revoke, suspend, or refuse 
Hearing. 
to reneM' the license of any premium finance company, he shall give 
to such person an opportunity to be fully heard and to introduce 
evidence in his behalf. 
In lieu of revoking or suspending the license 
Penalty. 
for any of the causes enumerated in this section, after hearing as 
herein provided, the Superintendent may subject such company to a 
penalty of not more than $200 for each offense when in his j u d ^ e n t 
he finds that the public interest would not be harmed by the continued 
operation of such company. 
The amount of any such penalty shall 
be paid by such company through the office of the Superintendent to 
the District of Columbia Treasurer. 
At any hearing provided by 
this section, the Superintendent shall have authority to administer 
oaths to witnesses. Anyone testifying falsely, after having been 
administered such oath, shall be subject to the penalty of perjury. 
"(c) If the Superintendent refuses to issue or renew any license 
or if any applicant or licensee is aggrieved by any action of the Super-
intendent, said applicant or licensee shall have the right to a hearing 
and court proceeding as provided for in sections 35, 44, and 45 of this 
A c t . 
72 Stat. 2 5; 
"SEC. 56. BOOKS AND RECORD.— (a) Every licensee shall maintain ^''Dx^.*"ciderss-
records of its premium finance transactions and the said records shall 1339; 35-1348, 
be open to examination and investigation by the Superintendent. The 
Superintendent may at any time require any licensee to bring such 
records as he may direct to the Superintendent's office for examination. 
35-1349. 
128 
PUBLIC LAW 89-403-APRIL 18, 1966 
[80 STAT. 
"(b) Every licensee shall preserve its records of such premium 
finance transactions, including cards used in a card system, or at least 
three years after making the final entry in respect to any premium 
finance agreement. The preservation of records m photographic form 
shall constitute compliance with this requirement. 
"SEC. 57. POWER To MAKE RULES.—^The Superintendent shall have 
authority to make and enforce such reasonable rules and regulations 
as may be necessary in making effective the provisions of this chapter, 
but such rules and regulations shall not be contrary to nor inconsistent 
with the provisions of this chapter. 
"SEC. 58. FORM OF PREMIUM FINANCE AGREEMENT.— (a) A premium 
finance agreement shall— 
"(1) be dated, signed by or on behalf of the insured, and the 
printed portion thereof shall be in at least eight-point type, 
"(2) contain the name and place of business of the insurance 
agent negotiating the related insurance contract, the name and 
residence or the place of business of the premium finance com-
pany to which payments are to be made, a description of the insur-
ance contracts involved and the amount of the premium therefor; 
and 
"(3) set forth the following items where applicable: 
"(A) the total amount of the premiums, 
"(B) the amount of the downpayment, 
"(C) the principal balance (the difference between items 
( A ) a n d ( B ) ) , 
, 
"(D) the amount of the service charge, 
"(E) the balance payable by the insured (sum of items 
(C) and (D)),and 
"(F) the number of installments required, the amount of 
each installment expressed in dollars, and 
the due date or period thereof. 
"(b) The items set out in clause (3) of subsection (a) need not 
be stated in the sequence or order in which they appear in such clause, 
and additional items may be included to explain the computations 
made in determining the amount to be paid by the insured. 
"SEC. 
59. MAXIMUM SERVICE CHARGE.— (a) A premium 
finance 
company shall not charge, contract for, receive, or collect a service 
charge other than as permitted by this chapter. 
Computation. 
tt^]^^ -pj^g, gervlce charge is to be computed on the balance of the 
premiums due (after sul3tracting the downpayment made by the 
insured in accordance with the 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 
of the premium finance agreement is payable. 
^'"°''"*- 
"(c) The service charge shall be a maximum of $6 per $100 per 
year plus an additional charge of $10 per premium finance contract 
which need not be refunded upon cancellation or prepayment. 
"SEC. 60. DELINQUENCY CHARGES.—A premium finance agreement 
may provide for the payment by the insured of a delinquency charge 
of | l to a maximum of 5 per centum of the delinquent installment but 
not to exceed $5 on any installment which is in default for a period of 
five days or more. 
"SEC. 61. CANCELLATION or INSURANCE CONTRACT UPON DEFAULT.— 
(a) When a premium finance agreement contains a power of attorney 
enabling the premium finance company to cancel any insurance con-
tract or contracts listed in the agreement, the insurance contract or 
contracts shall not be canceled by the premium finance company unless 
such cancellation is effectuated in accordance with this section. 
80 STAT.] 
PUBLIC LAW 89.404-APRIL 19, 1966 
129 
"(b) Not less than ten days' written notice shall be mailed to the 
insured of the intent of the premium finance company to cancel the 
insurance contract unless the default is cured within such ten-day 
period. 
" (c) After expiration of such ten-day period, the premium finance 
company may thereafter request in the name of the insured, cancella-
tion of such insurance contract or contracts by mailing to the insurer 
a notice of cancellation, and the insurance contract shall be canceled 
as if such notice of cancellation had been submitted by the insured 
himself, but without requiring the return of the insurance contract 
or contracts. 
The premium finance company shall also mail a notice 
of cancellation to the insured at his last known address, 
"(d) All statutory, regulatory, and contractual restrictions pro-
viding that the insurance contract may not be canceled unless notice is 
given to a, governmental agency, mortgagee, or other third party shall 
apply where cancellation is effected under the provisions of this section. 
The insurer shall give the prescribed notice in behalf of itself or the 
insured to any governmental agency, mortgagee, or other third party 
on or before the second business day after the day it receives the notice 
of cancellation from the premium finance company and shall determine 
the effective date of cancellation taking into consideration the number 
of days notice required to complete the cancellation. 
"(e) Whenever an insurance contract is cancelled in accordance 
with this section, the insurer shall return whatever gross unearned 
premiums are due under the insurance contract to the premium finance 
company effecting the cancellation for the account of the insured or 
insureds. 
"(f) In the event that the crediting of return premiums to the ac-
count of the insured results in a surplus over the amount due from the 
insured, the premium finance company shall refund such excess to the 
insured provided that no such refund shall be required if it amounts 
to less than $1. 
"SEC. 62. EXEMPTION FROM A N Y FILING REQUIREMENT.—No filing 
of the premium finance agreement shall be necessary to perfect the 
validity of such agreement as a secured transaction as against cred-
itors, subsequent purchasers, pledgees, encumbrances, successors, or 
assigns." 
SEC. 2. The amendments made by this Act shall take effect on the 
sixtieth day after the date of enactment. 
Approved Apr^l 18, 1966. 
Cancellation 
notice. 
Return of pre 
miums. 
Refund. 
Effective date. 
Public Law 89-404 
AN ACT 
To promote a more adequate national program of water research. 
April 19, 1966 
[S. 22] 
Be it enacted hy the Senate and House of Rejwesentatwes 
of the 
United States of Ainerica in Congress assembled, That section 200 of 
the Water Resources Research Act of 1964 (78 Stat. 331, 42 U.S.C. 
1961b) is hereby amended to read as follows: 
"SEC. 200. (a) Tliere are authorized to be appropriated to the Secre-
tary of the Interior $5,000,000 for the fiscal year 1967, $6,000,000 for 
the fiscal year 1968, $7,000,000 for the fiscal year 1969, $8,000,000 for 
the fiscal year 1970, $9,000,000 for the fiscal year 1971, and $10,000,000 
for each of the fiscal years 1972-1976, inclusive, from which appro-
priations the Secretary may make grants to and finance contracts and 
Water research 
program. 
Appropriations.