California Financial Code 18626 – A premium finance agency may, in a premium finance agreement, …
A premium finance agency may, in a premium finance agreement, contract for, charge, receive, and collect a finance charge which shall not exceed in the aggregate:
(a) Two percent per month on that part of the unpaid principal balance of any loan up to, including, but not in excess of, one thousand dollars ($1,000).
Terms Used In California Financial Code 18626
- Charges: as used in this division , include the aggregate interest, fees, bonuses, commissions, brokerage, discounts, expenses, and other forms of costs charged, contracted for, or received by an industrial loan company or any other person in connection with the investigating, arranging, negotiating, procuring, guaranteeing, making, servicing, collecting, or enforcing of a loan, or for forbearance of money, credit, goods, things in action, or any other service or services rendered. See California Financial Code 18007
- Contract: A legal written agreement that becomes binding when signed.
- premium finance agreement: means a loan contract, note, agreement or obligation by which an insured agrees to pay to a company in installments the principal amount advanced by the company to an insurer or producer in payment of premium on an insurance contract or contracts, plus charges, with the assignment as security therefor of the unearned premiums, accrued dividends or loss payments, the final installment due date of the agreement not to extend beyond the term of the insurance contract included in the agreement having the latest expiration date. See California Financial Code 18564
- principal balance: means the difference between the amount of the premium and fees charged by the insurer or producer and the downpayment on the premium. See California Financial Code 18566
- 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.
(b) One percent per month on any remainder of such unpaid principal balance in excess of one thousand dollars ($1,000).
As used in this article “consumer insurance premium finance loan” shall mean an insurance premium finance loan where the insurance policies which are security for the loan are for personal, family or household use.
(c) As an alternative to the charges authorized by subdivisions (a) and (b), a premium finance agency may contract for and receive charges at a rate not exceeding 1.6 percent per month on the unpaid principal balance.
(Amended by Stats. 1983, Ch. 356, Sec. 3.)