Connecticut General Statutes 38a-170 – Cancellation of insurance contract on default of insured
(a) When an insurance premium finance agreement contains a power of attorney enabling the insurance premium finance company to cancel any insurance contract or contracts listed in the agreement on account of any default on the part of the insured, the insurance contract or contracts shall not be cancelled by the insurance premium finance company unless such cancellation is effectuated in accordance with the provisions of this section.
Terms Used In Connecticut General Statutes 38a-170
- Contract: A legal written agreement that becomes binding when signed.
- Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
- Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy. See Connecticut General Statutes 38a-1
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
(b) Not less than ten days’ written notice shall be mailed by first class mail to the insured, at his last-known address, of the intent of the insurance premium finance company to cancel the insurance contract unless the default is cured within such ten-day period.
(c) After expiration of such ten-day period, the insurance premium finance company may request, in the name of the insured, cancellation of such insurance contract or contracts by mailing to the insurer a notice of cancellation, and the insurance contract may be cancelled as if such notice of cancellation had been submitted by the insured himself, but without requiring the return of the insurance contract or contracts. The insurance premium finance company shall also mail, by first class mail, a notice of cancellation to the insured at his last-known address.
(d) All statutory, regulatory, and contractual provisions or restrictions providing that the insurance contract may not be cancelled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under the provisions of this section. The insurer shall give the prescribed notice on behalf of itself or the insured to any such governmental agency, mortgagee or other third party on or before the second business day after the day it receives the notice of cancellation from the insurance premium finance company and shall determine the effective date of cancellation taking into consideration the number of days notice required to complete the cancellation.
(e) Whenever an insurance contract is cancelled in accordance with the provisions of this section, the insurer shall return whatever gross unearned premiums are due under the insurance contract to the insurance premium finance company effecting the cancellation for crediting to the account of the insured.
(f) 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 to the insurance premium finance company, such company shall refund such excess to the insured, provided no such refund shall be required if the surplus amounts to less than one dollar.