As used in this division, “premium financing” means engaging in the business of advancing money, directly or indirectly, to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned premiums, accrued dividends, or loss payments as security for such advancement in payment of premiums on insurance contracts only, and does not include the financing of insurance contract premiums purchased in connection with the financing of goods and services.
Premium Financing
Section § 29000
This law defines 'premium financing' as the business of lending money to an insurance company or agent on behalf of someone who is insured. This happens through a special agreement where the insured person uses unearned premiums or other insurance-related payments as security. It's important to note that this doesn't cover financing insurance costs when buying other goods or services.
premium financing advancing money insurer
Section § 29001
This law defines a "finance charge" as any extra amount the insured person agrees to pay beyond the main premium and fees set by the insurance company, not counting the cost of credit life insurance and attorney fees.
As used in this division, “finance charge” means any amount which the insured agrees to pay in excess of the premium and fees charged by the insurer or producer, and exclusive of the cost of credit life insurance and attorney fees.
finance charge insured payment insurance premium
Section § 29002
This section defines a 'premium finance agreement'. It's an arrangement where a person agrees to pay back a lender in installments for money the lender advanced to cover an insurance premium. The lender is protected by getting assigned any unearned premiums or dividends as security.
As used in this division, “premium finance agreement” means a loan contract, note, agreement, or obligation by which an insured agrees to pay to a lender in installments the principal amount advanced by the lender to an insurer or producer in payment of premium on an insurance contract or contracts, plus charges, with the assignment, as security therefor, of the unearned premiums, accrued dividends, or loss payments.
premium finance agreement insurance loan installment payments
Section § 29003
This law allows someone involved in premium financing to pay an insurance agent or broker for helping with a premium financing agreement. However, the premium financer must keep a detailed record, approved by the regulatory authority, of all payments made to agents and brokers for three years, available for inspection.
Any person engaged in premium financing may pay compensation to a licensed insurance agent or broker for arranging, directing or performing services in connection with a premium financing agreement; provided, that the premium financer shall maintain for inspection by the appropriate regulatory authority for a period of three years a statement, in a manner and form approved by the regulatory authority, setting forth the fees paid to individual insurance agents and brokers who are paid for services in connection with premium financing.
premium financing insurance agent compensation broker payment
