2023 New York Laws › ISC - Insurance › Article 34 - Insurance Contracts-Property/casualty › 3428 - Cancellation of Insurance Contracts; Return Premiums; Financed Insurance Premiums.

§ 3428. Cancellation of insurance contracts; return premiums; financed
insurance  premiums.  (a)  Except  as provided in subsection (e) of this
section, whenever an insurance contract made or issued in this state  is
cancelled  or  otherwise terminated by the insured before the expiration
thereof in accordance with  the  terms  of  such  contract,  the  earned
premium  to  be  retained  by  the  insurer  shall  be determined by the
applicable rate  filing,  if  any,  otherwise  in  accordance  with  the
provisions of such contract.
(b) No authorized insurer or its agent may knowingly accept payment of
premiums,  for  an  insurance  contract  made  or  issued in this state,
advanced under a premium finance agreement as defined  in  section  five
hundred  fifty-four  of  the  banking  law  by  or for any person, firm,
corporation or association who is not authorized either to engage in the
business of a premium finance agency or to make loans for the purpose of
financing insurance premiums in accordance with the banking law,  or  to
include  an  amount  for  insurance  in  a retail instalment contract or
obligation in accordance with the personal property law.
(c) No authorized insurer shall honor a power  of  attorney  or  other
authority  to  cancel  an  insurance  contract executed by an insured in
connection with insurance premium financing, except in  accordance  with
section   five   hundred  seventy-six  of  the  banking  law.  Voluntary
advancement of a premium to the insurer by an agent or broker, where  no
additional  charge  over and above the premium has been imposed upon the
insured and the insured has not signed a note or other obligation to pay
the premium shall not be construed to be within the meaning of insurance
premium finance agreement as defined in article twelve-b of the  banking
law.
(d) Whenever an insurance contract the premiums for which are advanced
under  a  premium  finance  agreement as defined in section five hundred
fifty-four of the banking law, is cancelled,  the  insurer  or  insurers
within  a  reasonable  time not to exceed sixty days after the effective
date of the cancellation shall return whatever gross  unearned  premiums
are  due  under the insurance contract or contracts to the bank, lending
institution, premium finance agency or sales finance  company,  for  the
benefit of the insured.
(e)  Whenever  an  insurance  contract,  issued  by or on behalf of an
authorized insurer or insurers, the  premiums  for  which  are  advanced
under  a  premium  finance  agreement as defined in section five hundred
fifty-four of the banking law, is cancelled, upon such cancellation  the
authorized  insurer or insurers shall return the gross unearned premiums
due under the insurance contract or contracts, on a pro  rata  basis  to
the bank, lending institution, premium finance agency or premium finance
company,  for  the  benefit of the insured, provided, however, that such
authorized insurer or insurers shall be entitled  to  retain  a  minimum
earned  premium  on  the  policy  of ten percent of the gross premium or
sixty dollars, whichever is greater.