California Financial Code 18628 – The finance charge may be computed from the effective date of the …
The finance charge may be computed from the effective date of the insurance coverage, provided that the company shall pay the premium due the insurer, either:
(a) Within 30 days from the effective date of the insurance coverage; or
Terms Used In California Financial Code 18628
- company: means a premium finance agency. See California Financial Code 18565
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- finance charge: means any amount which the insured agrees to pay the company 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. See California Financial Code 18567
- 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
(b) Within 30 days after the receipt by the company of a proper premium finance agreement; or
(c) Within 15 days after the company has mailed to the insured, notice of a revised finance agreement pursuant to Section 18606 whichever is later.
If the conditions of subdivision (a), (b), or (c) are not met the finance charge shall be computed from the date the proceeds of the loan are forwarded to the insurer. In the event the company receives a proper premium finance agreement later than 60 days from the effective date of the policy financed, a proportioned adjustment of the finance charge shall be made after such 60-day period.
(Added by Stats. 1976, Ch. 964.)