Vermont Statutes Title 8 Sec. 7007
Terms Used In Vermont Statutes Title 8 Sec. 7007
- Contract: A legal written agreement that becomes binding when signed.
- Insurance premium finance agreement: means an agreement by which an insured or prospective insured promises to pay to an insurance premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or broker in payment of premiums of an insurance contract together with interest and a service charge as authorized and limited by this chapter. See
- Insurance premium finance company: means a person engaged in the business of entering into insurance premium finance agreements or acquiring insurance premium finance agreements from other insurance premium finance companies. See
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
§ 7007. Limitation on interest and other charges
(a) An insurance premium finance company shall not charge, contract for, receive, or collect an interest charge or any fee, other than as permitted by this chapter.
(b) The interest is to be computed on the balance of the premiums due (after subtracting the down payment made by the insured in accordance with the insurance premium finance agreement) from the effective date of the insurance contract, for which the premiums are being advanced, to and including the date when the final installment of the insurance premium finance agreement is payable.
(c) The interest rate shall not exceed the rates permitted by 9 V.S.A. § 41a(b)(5), or a nonrefundable charge of $15.00 per insurance premium finance agreement, whichever is greater, except as provided in this section. If the insurance policy that is the subject of the insurance premium finance agreement is for other than personal, family, or household purposes, then the parties to the contract may agree upon any rate of interest that shall be stated in the insurance premium finance agreement. The interest permitted by this subsection anticipates timely repayment in consecutive monthly installments equal in amount for a period of one year. For repayment in greater or lesser periods or in unequal, irregular, or other than monthly installments, the interest may be computed at an equivalent effective rate having due regard for the timely payments of installments.
(d) Notwithstanding the provisions of any insurance premium finance agreement, an insured may prepay the obligation in full at any time. In such event, the insured shall receive a refund credit, which refund credit shall be computed according to the actuarial method on the assumption that all payments were made as originally scheduled. Where the amount of the refund credit is less than $1.00, no refund need be made, unless specifically requested by the insured. (Added 1983, No. 77, § 1; amended 2021, No. 105 (Adj. Sess.), § 249, eff. July 1, 2022.)