California Financial Code 18563 – As used in this chapter, “premium financing” means the activities of …
As used in this chapter, “premium financing” means the activities of a company 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 acquiring premium finance agreements, and does not include the financing of insurance contract premiums purchased in connection with the financing of goods and services. The amount of such advancement in payment of premiums must bear a reasonable relationship to the premium or premiums being financed.
(Amended by Stats. 1998, Ch. 827, Sec. 16. Effective January 1, 1999.)
Terms Used In California Financial Code 18563
- company: means a premium finance agency. See California Financial Code 18565
- Contract: A legal written agreement that becomes binding when signed.
- insured: means the person who has purchased or arranged to purchase an insurance contract and who enters into a premium finance agreement with a premium finance agency. See California Financial Code 18562
- premium finance agreement: means a loan contract, note, agreement or obligation by which an insured agrees to pay to a company in installments the principal amount advanced by the company 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, the final installment due date of the agreement not to extend beyond the term of the insurance contract included in the agreement having the latest expiration date. See California Financial Code 18564