(a) Except as provided in subsection (d) of this section, a premium finance agreement may require the insured to pay a cancellation charge if a default in paying an installment results in the cancellation of an insurance contract listed in the premium finance agreement.

(b) A cancellation charge shall be:

(1) with respect to private passenger automobile or personal fire or liability insurance, equal to the difference between a delinquency and collection charge imposed under § 23-306 of this subtitle with respect to the installment in default and:

(i) $15 for a default before or during calendar year 2014;

(ii) $16 for a default during calendar year 2015;

(iii) $17 for a default during calendar year 2016;

(iv) $18 for a default during calendar year 2017;

(v) $19 for a default during calendar year 2018; and

(vi) $20 for a default during or after calendar year 2019; and

(2) with respect to commercial automobile, fire, or liability insurance, 5% of the installment, not to exceed an amount equal to the difference between a delinquency and collection charge imposed under § 23-306 of this subtitle with respect to the installment in default and $100.

(c) A premium finance company may require the payment of a reinstatement charge that is in place of and in the same amount as the cancellation charge if, after a cancellation charge is imposed in accordance with the requirements of subsection (d) of this section, the insured pays the defaulted installment.

(d) A premium finance agreement may impose a cancellation charge:

(1) on or after the effective date stated in the notice of cancellation issued to the insurer under § 23-403 of this title; or

(2) on or after the cancellation effective date stated in the notice of intent to cancel delivered or mailed to the insured under § 23-402 of this title, if:

(i) the premium finance company has notified the insured in the notice of intent to cancel that a cancellation fee will be imposed on the cancellation effective date stated in the notice of intent to cancel; and

(ii) the notice of intent to cancel includes the following statement in 12-point or larger type: “If you do not pay the delinquent amount before the cancellation effective date stated in this notice, at any time within 30 days of the cancellation effective date, your insurance policy is subject to cancellation on the cancellation effective date. This means that if you have a loss on or after the cancellation effective date stated in this notice, you may not have coverage for the loss.”.