17:16D-13 - Cancellation of insurance contract upon default - New Jersey Statutes

17:16D-13.  Cancellation of insurance contract upon default
    (a) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled by the premium finance company unless such cancellation is effectuated in accordance with this section.

    (b) Not less than 10 days' written notice shall be mailed to the insured of  the intent of the premium finance company to cancel the insurance contract unless the default is cured within such 10-day period.  A copy of said notice shall also be sent to the insurance agent or insurance broker indicated on the premium finance agreement.

    (c) After expiration of such 10-day period, the premium finance company may  thereafter 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 shall be canceled 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 premium finance company shall also mail a  notice of cancellation to the insured at his last known address and to the  insurance agent or insurance broker indicated on the premium finance agreement.   The effective date of such cancellation shall not be earlier than 3 days after  the date of mailing of such notice to the insured and to the insurance agent or insurance broker.

    (d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be canceled 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 in behalf of itself or the insured to any 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 premium finance company and shall determine the effective date of cancellation taking into consideration the number of days notice required to complete the cancellation.

     L.1968, c. 221, s. 13.