SECTIONS 18560-18567 - California Statutes

FINANCIAL CODE

SECTION 18560-18567

18560. "Premium finance agency" means any industrial loan company
incorporated under this division which, by the terms of its authority
to engage in the industrial loan business, is permitted to issue or
sell investment certificates subject to the limitations set forth in
Section 18596 and its business is limited to that set forth in this
chapter.

18561. Such terms relating to insurance as are used in this chapter
shall have the meaning ascribed to them in the Insurance Code and in
the practices of the insurance business.

18562. As used in this chapter, "insured" means the person who has
purchased or arranged to purchase an insurance contract and who
enters into a premium finance agreement with a premium finance
agency.

18563. As used in this chapter, "premium financing" means the
activities of a company engaging in the business of advancing money
directly or indirectly to an insurer or producer at the request of an
insured pursuant to the terms of a premium finance agreement,
wherein the insured has assigned the unearned premiums, accrued
dividends or loss payments as security for such advancement in
payment of premiums on insurance contracts only, and acquiring
premium finance agreements, and does not include the financing of
insurance contract premiums purchased in connection with the
financing of goods and services. The amount of such advancement in
payment of premiums must bear a reasonable relationship to the
premium or premiums being financed.

18564. As used in this chapter, "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.

18565. As used in this chapter, "company" means a premium finance
agency.

18566. As used in this chapter, "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.

18567. As used in this chapter, "finance charge" means any amount
which the insured agrees to pay the company in excess of the premium
and fees charged by the insurer or producer, and exclusive of the
cost of credit life insurance and attorney fees.