Code of Maryland Regulations › Title 09 - MARYLAND DEPARTMENT OF LABOR › Subtitle 03 - COMMISSIONER OF FINANCIAL REGULATION › Chapter 09.03.04 - Retail Installment Sellers › Section 09.03.04.03 - Insurance

Current through Register Vol. 51, No. 14, July 12, 2024
A. Except as
				provided elsewhere in this regulation, if an insurance premium is financed as
				part of an installment sale agreement, whether for dual interest physical
				damage insurance or third-party liability insurance, or both, and the insurance
				is terminated for any reason by the insurer and the unearned premium returned
				to the holder of the installment sale agreement, the holder immediately shall
				remit the unearned premium to the buyer less only those amounts then due and
				payable under the contract.
B. Upon
				receipt by the holder of the installment sale contract of notice of
				cancellation of the dual interest coverage, if the holder orders single
				interest physical damage insurance, the premium for this coverage shall be
				considered due and payable on the date the coverage is effective. The cost of
				this single interest coverage may be deducted by the holder from the return
				premium received by the holder from the insurance company which terminated the
				dual interest coverage, but only if proper notice is given to the buyer that
				the unearned premium refund will be so applied and the buyer is given a
				reasonable opportunity to secure physical damage dual interest coverage from an
				insurance agent, broker, or company of his choice.
C. If single interest coverage is procured by
				the holder, and the buyer later independently procures dual interest coverage,
				the single interest coverage promptly shall be cancelled by the holder upon
				proper notice that dual interest coverage is effective. Except as provided
				below, the return premium refund resulting from cancellation shall be remitted
				promptly to the buyer less only those amounts then due and payable under the
				contract.
D. While the buyer in all
				cases shall have an absolute right to receive, and the holder to remit, net
				funds in cash, in which event the buyer shall remain obligated to the holder to
				repay the same as part of the indebtedness under the contract, the holder may
				make available to the buyer the following options:
(1) To receive these net funds, in whole or
				in part, in cash, in which event the buyer's indebtedness under the contract
				will not be reduced;
(2) To have
				these net funds, in whole or in part, applied to reduce pro rata the monthly
				installment payments due for the remaining term of the contract;
(3) To have these net funds, in whole or in
				part, applied to the last installment payable, but not yet due, in which event,
				if this application results in prepayment in full of the buyer's remaining
				indebtedness under the contract, the buyer shall be entitled to a rebate of the
				finance charge to the extent required by Commercial Law Article, §
										12-620, Annotated Code
				of Maryland;
(4) To have these net
				funds, in whole or in part, applied to the next installment payable, but not
				yet due, in which event, if this application results in prepayment in full of
				the buyer's remaining indebtedness under the contract, the buyer shall be
				entitled to a rebate of the finance charge to the extent required by Commercial
				Law Article, §
										12-620, Annotated Code
				of Maryland;
(5) To make another
				disposition of the funds as the parties may mutually agree upon in
				writing.