Kansas Statutes 40-282. Extension of credit to policyholder by insurance agent; conditions; request for cancellation of insurance for nonpayment of policyholder’s account; exceptions
(a) Any insurance agent, as defined in Kan. Stat. Ann. § 40-239, and amendments thereto, may extend credit to policyholders in connection with the issuance or servicing of policies procured or negotiated by such agent but any such credit so extended shall satisfy one of the following conditions, unless otherwise authorized by law:
(1) If credit is extended to policyholders for a period of not more than 30 days from the date the premium is due, and such credit is not evidenced by a written instrument, there shall be no interest charged for such credit; or
Terms Used In Kansas Statutes 40-282
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- insurance company: shall mean and include all corporations, companies, associations, societies, fraternal benefit societies, reciprocal exchanges, persons or partnerships writing contracts of insurance, indemnity or suretyship in this state upon any type of risk or loss except insurance companies transacting business pursuant to the provisions of Kan. See Kansas Statutes 40-222c
- Lien: A claim against real or personal property in satisfaction of a debt.
- Month: means a calendar month, unless otherwise expressed. See Kansas Statutes 77-201
(2) if credit is extended to policyholders for a period of more than 30 days from the date the premium is due, and such credit is not evidenced by a written instrument, interest may be charged for credit extended after 30 days at a rate not exceeding 1 1/2% per month on the unpaid balance; or
(3) if the extension of credit to a policyholder is evidenced by a written instrument setting forth the terms, and signed by the policyholder, any interest charged for such credit shall be clearly stated in the instrument but it shall not exceed the legal rate of interest authorized in Kan. Stat. Ann. § 16-207, and amendments thereto.
(b) Any insurance agent extending credit to policyholders as provided in subsection (a)(1) or (2) of this section may request the company to cancel such insurance according to the terms of the policies for nonpayment of the policyholders’ accounts, except as provided in Kan. Stat. Ann. § 40-277, and amendments thereto, and except for policies paid by an escrow agent, or paid direct by an insured to an insurance company, or where the insured specified that payment apply to a specific policy and all premiums due on that policy have been paid, or where the unearned premium is collateral for a loan under Kan. Stat. Ann. § 40-2601et seq., and amendments thereto.
The insurance agent shall notify the policyholder of the requested cancellation in writing at the time the request is made to the insurance company.
Such insurance agent shall have a lien on any return premium for all policies of the same policyholder to the extent of amounts owed by the policyholder.