Opinion ID: 2538609
Heading Depth: 2
Heading Rank: 2

Heading: The Refund Provision

Text: As an initial matter, it is helpful to dispense with the significance of the refund provision, RCW 48.56.120, which was central to the Court of Appeals' resolution of this case. Rest. Dev., Inc., 114 Wash.App. at 201-04, 55 P.3d 680. RCW 48.56.120 clearly states that, upon cancellation of the insurance contract, the insurance company must refund the unearned portion of the premium to the insurance premium finance company for the account of the insured. In turn, the premium finance company must refund any surplus over the amount due to the insured. RCW 48.56.120(2). The Court of Appeals seems to have read the reference to surplus over the amount due to necessarily include unearned interest. Rest. Dev., Inc., 114 Wash.App. at 201-02, 55 P.3d 680. However, the language of RCW 48.56.120 does not plainly state that any refund will include unearned interest in the event of cancellation; it only specifically refers to a refund of unearned premiums. While this refund provision may contemplate a refund of both unearned premiums and interest, the provision does not do so clearly enough to end our inquiry. In a related argument, RDI contends that the legislature clearly intended there to be no refund of service charges or acquisition charges. RDI bases its conclusion on language in RCW 48.56.090 which states: The service charge shall be a maximum of ten dollars per one hundred dollars per year plus an acquisition charge of ten dollars per premium finance agreement which need not be refunded upon cancellation or prepayment. RCW 48.56.090(3) (emphasis added). Conversely, Cananwill argues that only the acquisition charge need not be refunded, indicating by negative implication that the service charge does need to be refunded upon cancellation or prepayment. Ultimately, it is unclear whether it is the entire service charge or only the acquisition charge that need not be refunded. Because this clause does not rise to the level of clarity found in other states' refund provisions, [1] we instead rely on the language and legislative history of the statutory maximum clause. [2]