N.Y. Banking Law 569 – Delinquency, collection and cancellation charges; attorney's fees
§ 569. Delinquency, collection and cancellation charges; attorney's fees. 1. A premium finance agreement may provide for the payment by the insured of a delinquency and collection charge on each instalment in default for a period of not less than five days in an amount of one dollar to a maximum not in excess of five per centum of such instalment, provided however, that when any personal, household or domestic insurance contract are listed in the agreement the charge shall not exceed five dollars and, provided that only one such delinquency and collection charge may be collected on any such instalment regardless of the period during which it remains in default and, if the default results in the cancellation of any personal, household or domestic insurance contract listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge equal to the difference between any delinquency and collection charge imposed in respect to the instalment in default and five dollars.
Terms Used In N.Y. Banking Law 569
- Contract: A legal written agreement that becomes binding when signed.
- Insured: means a person who enters into a premium finance agreement with a premium finance agency or makes and delivers a premium finance agreement to, or to the order of, an insurance agent or broker, whether or not he is insured under an insurance contract, premiums for which are advanced or to be advanced under the premium finance agreement. See N.Y. Banking Law 554
- Premium finance agency: means :
(a) a person engaged, in whole or in part, in the business of entering into premium finance agreements with insureds, including a bank if so engaged; or
(b) a person engaged, in whole or in part, in the business of acquiring premium finance agreements from insurance agents or brokers or other premium finance agencies, including a bank if so engaged and an insurance agent or broker who is licensed as a premium finance agency and who holds premium finance agreements made and delivered by insureds to him or his order. See N.Y. Banking Law 554 - Premium finance agreement: means a promissory note or other written agreement by which an insured promises or agrees to pay to, or to the order of, either a premium finance agency or an insurance agent or broker the amount advanced or to be advanced under the agreement to an authorized insurer or to an insurance agent or broker in payment of premiums on an insurance contract, together with a service charge as authorized and limited by law. See N.Y. Banking Law 554
2. A premium finance agreement may also provide for the payment of attorney's fees not exceeding twenty per centum of the amount due and payable under the agreement if it is referred for collection to an attorney not a salaried employee of the premium finance agency holding the agreement.
3. Notwithstanding the provisions of this section, a premium finance agency shall not take or receive from or charge an insured any cancellation charge or attorney's fees unless, within ten days after default in the payment of any instalment of a premium finance agreement, the agency has mailed a notice of the default to the insured at his address as shown on the agreement and to any insurance agent or broker named therein at his place of business as shown therein.