N.Y. Comp. Codes R. & Regs. tit. 3 § 405.1
Current through Register Vol. 46, No. 45, November 2, 2024
Section 405.1 - Books and records(a) Until payment in full, every licensee shall file each premium finance agreement or duplicate originals, thereof, and all original documents relating thereto (except those papers returned to the insured) so as to be readily available for inspection at any time. All such papers and instruments shall bear a common identifying number.(b) Every insurance premium finance agreement which originates with a broker or agent shall contain a statement of the amount of the charge under Insurance Law, section 2119, and a statement as to the services for which such charge is made. A statement that "the services for which the charge pursuant to Insurance Law, section 2119, is imposed are in connection with obtaining and servicing the policies listed hereon" will normally suffice. If such charge is not being financed, the amount thereof, if any, need not be set forth in the calculations required under Banking Law, section 567(3)(b), but may be set forth separately in the agreement with an appropriate indication that it is not being financed. An insurance premium finance agreement which does not originate with an agent or broker need not contain such statement unless the charge pursuant to Insurance Law, section 2119, is being financed. Unless such premium finance agreement contains a statement with respect to such charge, every premium finance agency, as defined in Banking Law, section 554(7), shall obtain from the insured at the time of entering into the premium finance agreement a separate statement, to be signed by the insured, stating that the insured has paid no such charge, or if such charge has been paid, the amount thereof. Nothing herein contained shall be construed to impose any duty upon a premium finance agency to verify whether a charge pursuant to Insurance Law, section 2119, has been imposed or, if so imposed the amount thereof or the reasons therefor.(c) Every licensee shall maintain a register, ledger or combination of records containing a summary of premium finance agreements acquired, other than pursuant to a pledge, which can readily show; (1) the date of acquisition;(2) the name of the insured;(3) the identifying number;(4) the principal balance;(5) the amount of service charge;(7) a distribution of proceeds showing the dates, amounts, purposes and names of the person to whom any part of the proceeds is distributed. The record shall also show the application of any part of the proceeds to an unpaid balance due on an existing premium finance agreement which is terminated by a refinance agreement. For the purpose of this Part, the time balance shall mean the sum of the principal balance plus the amount of the service charge.
(d) Every licensee shall maintain a record which will readily disclose at any time, the aggregate number and outstanding time balances of all premium finance agreements held by it, other than pursuant to a pledge.(e) Every licensee who is an insurance agent or broker and who holds a license pursuant to and restricted by Banking Law, section 566(1), shall keep a separate record which will readily disclose at all times the aggregate number and outstanding time balances of premium finance agreements reacquired by the agent or broker from a premium finance agency under an agreement, entered into as an incident to the bona fide sale or pledge thereof to the premium finance agency, to reacquire it in case of default by the insured.(f) Every licensee shall maintain an individual ledger card or appropriate combination of records with respect to each premium finance agreement showing: (1) the name and address of the insured;(2) the identifying account number;(3) the name of the producer;(4) the amount of the principal balance;(5) the date of acquisition;(6) the name or names of the insurers and the policy numbers of the related insurance contracts;(7) the date from which the service charge is payable and whether such date is the inception date of the insurance contract or the due date of the premium financed or neither;(10) schedule of required payments.(g) The ledger card shall also show all receipts setting forth their application to outstanding time balance, fines and other charges, if any, with the type of such charge clearly specified.(h) With respect to cancellation of insurance the licensee shall record the effective date of such cancellation, the date of notice to the insured and the date of notice to the insurer. There shall also be recorded the amount of return premium, if any, received and the disposition thereof.(i) In connection with the prepayment of a premium finance agreement the ledger card shall show the amount of service charge refund required to be made and the date such refund is made.(j) With respect to any premium finance agreement, whether charged off or not, upon which legal proceedings have been taken, every licensee shall clearly indicate in permanent form on the insured's ledger card or on a separate sheet or card or file bearing the identifying account number, the following: (1) the date of referral to an outside counsel for collection;(2) the date and terms of any settlement agreed upon or the results of any legal or summary action taken for or against the licensee;(3) the nature of any collection expense incurred by the licensee in connection with litigation and charged to or paid by the insured or other obligor. Records bearing any notation made in conformity with this subdivision shall be kept in a binder or file separate from other records, provided that the record as to premium finance agreement which has been paid in full, or which is current as to payments, or concerning which a decision has been officially made to abandon collection efforts of every kind, may be placed elsewhere.
N.Y. Comp. Codes R. & Regs. Tit. 3 § 405.1