(a) A premium finance agreement must

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Terms Used In Alaska Statutes 06.40.110

  • Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
  • premium finance agreement: means an agreement by which a borrower or prospective borrower promises to pay to a licensee or to its assignee the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or broker in payment of premiums on an insurance policy sold in this state or covering risks located in this state together with a service charge, and as a security for it the premium finance company receives an assignment of the unearned premium. See Alaska Statutes 06.40.190
(1) be dated, signed by the borrower, and the printed portion of it shall be in at least eight-point type;
(2) contain the name and place of business of the insurance agent negotiating the related insurance policy, the name and residence or the place of business of the borrower as specified by the borrower, the name and place of business of the licensee to which payments are to be made, an identification of the insurance policy involved, and the amount of the premium charged for it; and
(3) set out the following items where applicable:

(A) the total amount of the premiums;
(B) the amount of the down payment;
(C) the principal balance (the difference between (A) and (B) of this paragraph);
(D) the annual percentage rate of interest; and
(E) the number of payments required, the amount of each payment expressed in dollars, and the due date or period of it.
(b) The items set out in (a)(3) of this section do not need to be stated in the sequence or order in which they appear in (a) of this section, and additional items may be included to explain the computations made in determining the amount to be paid by the insured.
(c) The repayment schedule relating to dwelling fire, homeowner, private passenger automobile, boats not used for commercial purposes, owner-occupied mobile homes, and fire insurance policies covering owner-occupied multiple unit dwellings for four families or less shall be such that the total amount due the licensee at any time does not exceed the unearned premium on the policy being financed at that time. A deficiency balance may not be established or collected from the borrower. This section does not preclude the licensee from establishing or collecting a deficiency balance to the extent the insurer offsets unearned premiums on the policy financed by premiums earned by reason of endorsements to that same policy not paid for by the insured or financed by the licensee.
(d) The licensee or the insurance agent shall deliver to the borrower, or mail to the borrower at the address shown in the agreement, a complete copy of the agreement.
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