GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION
CHAPTER 121
The General Assembly of North Carolina enacts:
Section 1. G.S. 58-35-85 reads as rewritten:
"§ 58-35-85. Procedure for cancellation of insurance contract upon default; return of unearned premiums; collection of cash surrender value.
When an insurance premium finance agreement contains a power
of attorney or other authority enabling the insurance premium finance company
to cancel any insurance contract or contracts listed in the agreement, the
insurance contract or contracts shall not be cancelled unless such the
cancellation is effectuated in accordance with the following provisions:
(1) Not less than 10 days'
written notice be mailed to the last known address of the insured or insureds
shown on the insurance premium finance agreement of the intent of the insurance
premium finance company to cancel his or their insurance contract or contracts
unless the defaulted installment payment is received. A notice thereof shall
also be mailed sent to the insurance agent.
(2) After expiration of such
the period, the insurance premium finance company shall mail send
the insurer a request for cancellation, including a copy of the power of
attorney, cancellation and shall mail a copy of the request for
cancellation to the insured at his last known address as shown on the insurance
premium finance agreement. The premium finance company shall include a
copy of the power of attorney with the request for cancellation if the insurer
has not already received a copy of the power of attorney with the application.
(3) Upon receipt of a copy
of such the request for cancellation notice by the insurer, the
insurance contract shall be cancelled with the same force and effect as if the
aforesaid request for cancellation had been submitted by the insured himself,
without requiring the return of the insurance contract or contracts.
(4) All statutory,
regulatory, and contractual restrictions providing that the insured may not
cancel his insurance contract unless he first satisfies such the restrictions
by giving a prescribed notice to a governmental agency, the insurance carrier,
an individual, or a person designated to receive such the notice
for said governmental agency, insurance carrier, or individual shall apply
where cancellation is effected under the provisions of this section.
(5) Whenever an insurance
contract is cancelled in accordance with this section, the insurer shall
promptly return whatever gross unearned premiums are due under the contract to
the insurance premium finance company effecting the cancellation for the
benefit of the insured or insureds. Whenever the return premium is in excess of
the amount due the insurance premium finance company by the insured under the
agreement, such the excess shall be remitted promptly to the
order of the insured, subject to the minimum service charge provided for in
this Article.
(6) The provisions of this section relating to request for cancellation by the insurance premium finance company of an insurance contract and the return by an insurer of unearned premiums to the insurance premium finance company, also apply to the surrender by the insurance premium finance company of an insurance contract providing life insurance and the payment by the insurer of the cash value of the contract to the insurance premium finance company, except that the insurer may require the surrender of the insurance contract."
Sec. 2. This act becomes effective October 1, 1995.
In the General Assembly read three times and ratified this the 29th day of May, 1995.
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Dennis A. Wicker
President of the Senate
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Harold J. Brubaker
Speaker of the House of Representatives