N.Y. Banking Law 577-A – Premium finance agreements
§ 577-a. Premium finance agreements. 1. Any amount advanced by a premium finance agency, with regard to any insurance policy issued pursuant to any plan established under Article 53 of the insurance law shall be paid either by check or draft made payable to the insurance company, or, if the company is not known, by check or draft made payable to the entity which pursuant to the plan established under Article 53 of the insurance law designates which insurer shall insure or service the risk. The check or draft shall not be made payable to the insurance agent or broker.
Terms Used In N.Y. Banking Law 577-A
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- 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
2. Where insurance coverage is procured through a wholesale producer for insurance policies financed with a premium finance agency, other than policies subject to subdivision one of this section:
(a) Prior to or contemporaneously with the advancement of any funds to an insurance retail producer who has procured an insurance policy through a wholesale producer, the retail producer shall provide the premium finance agency with the name and address of the wholesale producer through whom coverage was procured and, if available, the policy number of the insurance policy being financed, in writing;
(b) The premium finance agency shall notify, in writing, the wholesale producer and the insurance company of the gross premium, the borrower's name and address, and, if available, the policy number, within ten (10) business days of acceptance of the agreement;
(c) Failure by the retail producer to comply with paragraph (a) of this subdivision shall be a violation of subsection (d) of § 2120 of the insurance law, and the retail producer shall be liable for actual damages caused by his or her failure to disclose;
(d) For the purposes of this subdivision, a "retail insurance producer" or "retail producer" means an insurance producer who directly deals with an insured; a "wholesale insurance producer" or "wholesale producer" means the producer from whom or through whom the retail producer has procured coverage on behalf of the insured.