MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Business and Financial Institutions

By: Senator(s) Gordon

AN ACT TO AMEND SECTION 81-21-21, MISSISSIPPI CODE OF 1972, TO REVISE THE CALCULATION OF THE UNEARNED PREMIUMS RETURNED TO PREMIUM FINANCE COMPANIES WHENEVER FINANCED INSURANCE CONTRACTS ARE CANCELLED; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 81-21-21, Mississippi Code of 1972, is amended as follows:

81-21-21. (1) Whenever a financed insurance contract is cancelled, the insurer shall return whatever gross unearned premiums are due under the insurance contract, calculated pro rata unless otherwise required by law, directly to the premium finance company for the account of the insured or insureds as soon as reasonably possible, but in no event later than thirty (30) days after the effective date of cancellation.

(2) In the event that a premium is subject to an audit to determine the final premium amount, the gross unearned premium shall be calculated upon the deposit premium and the insurer shall return whatever gross unearned premiums are due based upon that deposit to the finance company for the account of the insured.

(3) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund such excess to the insured, provided that no such refund shall be required if it amounts to less than Three Dollars ($3.00).

SECTION 2. This act shall take effect and be in force from and after July 1, 1999.