Sec. 513a9. Premium finance agreement.

378 words·~2 min read·/il/chapter-215/act-5/513a9

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A premium finance agreement must be dated and signed by or on behalf of the named insured, and the printed portion shall be in at least 8-point type. The following items must be set forth on the first page of the accepted finance agreement:

(1)the total amount of the premiums;

(2)the amount of the down payment;

(3)the principal balance (the difference between items

(1)and (2));

(4)the amount of the finance charges expressed in dollars and as an annual percentage

rate;

(5)the balance payable by the insured (sum of items

(3)and (4));

(6)the number of installments, the due dates thereof, and the amount of each

installment expressed in dollars; and

(7)the policy numbers or binder numbers.

(b)The premium finance company is required to furnish full and complete disclosure of the terms and conditions of the premium finance agreement including, but not limited to, the specific insurance coverages financed to the named insured no later than the date that the first premium payment notice is sent to the insured.

(c)As to policies written primarily for personal, family, or household use, the premium finance company must:

(1)deliver or mail the premium check or checks in the amount of the principal balance

directly to the insurer or insurers unless the insurer or insurers have given written authority to the premium finance company to deliver the checks to the producer;

(2)issue the premium check or checks payable to the insurer, insurers, or, if the

insurer gives written authority to the premium finance company, to the producer; and

(3)properly identify the premium check or checks by policy number or binder number when

the premium is paid to the insurer or insurers.

(d)As to all other policies the premium finance company may:

(1)deliver or mail the premium check or checks in the amount of the principal balance

directly to the producer; and

(2)issue the premium check or checks payable to the producer.

(e)A premium finance company that pays the financed premium to the producer pursuant to subsection

(d)establishes the producer as the agent of the premium finance company for payment of the premium and for receipt of any return premium.