MISSISSIPPI LEGISLATURE
2004 Regular Session
To: Banking and Financial Services
By: Representative Guice
AN ACT TO AMEND SECTION 81-21-13, MISSISSIPPI CODE OF 1972, TO REVISE THE CONTENTS OF A PREMIUM FINANCE AGREEMENT; TO AMEND SECTION 81-21-15, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT AN INSURED SHALL RECEIVE A REFUND OF THE UNEARNED FINANCE CHARGE UPON CANCELLATION OF THE CONTRACT; TO AMEND SECTION 81-21-21, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE PREMIUM FINANCE COMPANY SHALL RETURN UNEARNED PREMIUMS TO THE ACCOUNT OF THE INSURED WHENEVER A FINANCED INSURANCE CONTRACT IS CANCELLED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 81-21-13, Mississippi Code of 1972, is amended as follows:
81-21-13. A premium finance agreement shall:
(a) Be dated and signed by or on behalf of the insured, and the printed portion thereof shall be in at least eight-point type;
(b) Contain the name and place of business of the insurance agent or broker negotiating the related insurance contract, the name and residence or place of business of the insured, the name and place of business of the premium finance company, a brief description of the insurance contracts involved and the amount of the premium; and
(c) Set forth the following items, where applicable:
(i) The total amount of the premium, less an itemized listing of any nonrefundable charges;
(ii) The amount of the down payment;
(iii) The principal balance, which is the difference between the amounts stated under subparagraphs (i) and (ii) of this paragraph;
(iv) The amount of the interest and the annual percentage rate;
(v) The balance payable by the insured, meaning the sum of amounts stated under subparagraphs (iii) and (iv) of this paragraph; and
(vi) The number of installments required, the amount of each installment expressed in dollars and the due date or period thereof.
SECTION 2. Section 81-21-15, Mississippi Code of 1972, is amended as follows:
81-21-15. (1) A premium finance company shall not charge, contract for, receive or collect any interest or service charge other than as permitted in this section.
(2) 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 premium finance agreement, from the effective date of the insurance contract or as otherwise agreed to by the parties, for which the premiums are being advanced, to the date when the final installment of the premium finance agreement is payable.
(3) Notwithstanding any provision of law to the contrary, for any loan or extension of credit in an amount of Ten Thousand Dollars ($10,000.00) or less, made by a licensee under this chapter, the licensee may contract for and receive any finance charge agreed to in writing by the licensee and the insured, not to exceed twenty-four percent (24%) per annum on the unpaid balance; * * * however, if the loan or extension of credit is in an amount more than Ten Thousand Dollars ($10,000.00), the licensee may contract for and receive any finance charge agreed to in writing by the licensee and the insured.
(4) Notwithstanding the provisions of any premium finance agreement, any insured shall receive a refund of the unearned finance charge, based on the Rule of 78's, upon the voluntary prepayment of the obligation in full or upon the cancellation of such contract. Where the amount of the refund credit is less than Three Dollars ($3.00), no refund need be made.
SECTION 3. Section 81-21-21, Mississippi Code of 1972, is amended as follows:
81-21-21. (1) Whenever a financed insurance contract is cancelled, the premium finance company shall return whatever gross unearned premiums are due under the insurance contract, calculated pro rata unless otherwise required by law, directly to 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) If 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 premium finance company shall return whatever gross unearned premiums are due based upon that deposit to * * * the account of the insured.
(3) If 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 4. This act shall take effect and be in force from and after its passage.