Virginia Code 38.2-1806: Interest with respect to credit extended or money lent for premiums on certain policies.
A. Any agent licensed in this Commonwealth to sell, solicit or negotiate property and casualty insurance, mutual assessment property and casualty insurance, or ocean marine insurance may charge interest on credit extended by the agent to the holder of any fire, casualty, surety or marine insurance policy, written or being serviced by or through such agent, for the premium due on such policy. The rate of interest shall not exceed one and one-half percent per month of the unpaid balance. However, the extension of credit or the making of the loan shall not be in conflict with the contract between the agent and the insurer that issues the policy.
Terms Used In Virginia Code 38.2-1806
- Contract: A legal written agreement that becomes binding when signed.
- in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Virginia Code 1-257
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Lien: A claim against real or personal property in satisfaction of a debt.
- Month: means a calendar month and "year" means a calendar year. See Virginia Code 1-223
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Solicit: means attempting to sell insurance or asking or urging a person to apply for a particular class of insurance from one or more insurers. See Virginia Code 38.2-1800
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
- Statute: A law passed by a legislature.
B. A licensed insurance agent extending credit as authorized in this section shall not be required to comply with the provisions of Chapter 47 (§ 38.2-4700 et seq.) of this title with respect to the licensing of premium finance companies.
C. Notwithstanding the provisions of §§ 38.2-2114 and 38.2-2212, if any insured fails to discharge any of his obligations to a licensed insurance agent when due in connection with the payment of any premium for a policy of insurance, that agent may request in writing that the insurer cancel such policy for nonpayment of premium. Within ten business days of the receipt of such written request, which shall also state the amount owed the agent by the policyholder, the insurer shall deliver or mail a written notice of cancellation to the named insured at the address shown in the policy and to any mortgagee or lienholder. This notice shall state the date on which the cancellation shall become effective. That date shall be established by giving at least the number of days notice prior to cancellation that are required by statute or the terms of the policy. Except for statutory requirements and contractual obligations, there shall be no liability on the part of the insurer for improper cancellation under this section if the insurer (i) in good faith relies upon the request of the agent and (ii) gives notice of cancellation in compliance with the provisions of this section.
D. The insurance agent shall have a lien on any return premium for the policy to the extent of the amount owed by the policyholder. Within thirty calendar days of the mailing of the notice of cancellation, the insurer shall forward that amount to the agent and shall forward the remainder, if any, of the return premium to the policyholder.
Code 1950, § 38.1-293.1; 1970, c. 370; 1979, c. 513, § 38.1-327.7; 1980, c. 581; 1985, c. 33; 1986, c. 562; 1987, c. 521; 2001, c. 706.