(a) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled by the premium finance company unless such cancellation is effectuated in accordance with this section.
(b) Not less than 10-day written notice shall be mailed to the insured, at his last known address as shown on the records of the premium finance company, of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such 10-day period.
(c) After the notice in subsection (b) of this section has expired, the premium service company may thereafter request, in the name of the insured, cancellation of such insurance contract by mailing to the insurer a notice of cancellation, and the insurance contract shall be cancelled as if such notice of cancellation had been submitted by the insured himself, but without requiring the return of the insurance contract. The premium service company shall also mail a notice of cancellation to the insured at his last address as set forth in its records, and such mailing shall constitute sufficient proof of delivery.
(d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be cancelled 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 to complete the cancellation.
Structure Code of Alabama
Chapter 40 - Insurance Premium Finance Companies.
Section 27-40-1 - Definitions.
Section 27-40-2 - Exemptions From Chapter.
Section 27-40-3 - Licenses - Required; Fees; Information to Be Furnished Commissioner.
Section 27-40-4 - Licenses - Investigation and Qualifications of Applicant; Issuance.
Section 27-40-5 - Licenses - Suspension or Revocation.
Section 27-40-6 - Books and Records.
Section 27-40-7 - Promulgation and Enforcement of Rules and Regulations.
Section 27-40-8 - Contents and Style of Premium Finance Agreement.
Section 27-40-9 - Service Charges; Prepayment of Obligation.
Section 27-40-10 - Delinquency and Cancellation Charges.
Section 27-40-11 - Procedure for Cancellation of Insurance Contract Upon Default.
Section 27-40-12 - Return of Gross Unearned Premiums Upon Cancellation of Contract.
Section 27-40-13 - Filing of Agreement.
Section 27-40-14 - Exclusive Jurisdiction of Department of Insurance.
Section 27-40-17 - Notification of Existence of Premium Finance Agreement.
Section 27-40-18 - Delivery of Copy of Premium Finance Agreement to Insured.