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  • Acts
  • 1997
  • Chapter 174 AN ACT RELATIVE TO INSURANCE PREMIUM FINANCE LICENSEES SUBJECT TO THE JURISDICTION OF THE DIVISION OF BANKS AND THE DIVISION OF INSURANCE.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:


SECTION 1. Chapter 175 of the General Laws is hereby amended by striking out section 162B, as appearing in the 1996 Official Edition, and inserting in place thereof the following section:-

Section 162B. Insurance agents and brokers may accept payment of insurance premiums in installments to be evidenced by notes or other appropriate instruments running from the insured to the agent or broker; provided, however, that payment of insurance premiums in installments to be evidenced by notes or other appropriate instruments running from the insured to the agent or broker on contracts of insurance, which contracts are primarily for personal, family or household purposes, shall be made under rates, charges and regulations established after public hearing, as equitable and nondiscriminatory, by a board consisting of the attorney general, the insurance commissioner and the commissioner of banks or their respective designees.

For purposes of financing insurance premiums and the subsequent sale or other negotiation of any such note or instrument to a third party, insurance agents and brokers shall be considered to be sellers of insurance.

SECTION 2. Section 1 of chapter 255C of the General Laws, as so appearing, is hereby amended by inserting after the word "order", in line 16, the following words:- and any property and casualty insurance agent or broker, who provides premium financing only to his own customers for purposes of financing the payment of premiums on contracts of insurance, which contracts of insurance are exclusively limited to commercial policies.

SECTION 3. Said chapter 255C is hereby further amended by striking out section 2, as so appearing, and inserting in place thereof the following section:-

Section 2. No person, except a credit union, a bank as defined in section 1 of chapter 167, a national banking association, or a federal savings and loan association, a federal savings bank, a sales finance company as defined in section 1 of chapter 255B, and a company licensed to carry on the business of making small loans, shall engage in the business of a premium finance agency unless licensed by the commissioner, as provided in section 3; provided, however, that no property and casualty insurance agent or broker, including an insurance agent or insurance broker conducting an insurance premium financing agency business under a subsidiary or different company name, who provides premium financing only to his own customers for purposes of financing payment of premiums on contracts of insurance, which contracts of insurance are exclusively limited to commercial insurance policies, shall be required to be licensed pursuant to this section or any other section of this chapter. Such license shall allow the holder to maintain only one office from which said business may be conducted, but more than one license may be issued to any person. Any change of location of an office of a licensee shall require the prior approval of the commissioner. Such request for relocation shall be in writing setting forth the reason or reasons for the request, and shall be accompanied by a relocation investigation fee of $50. If an applicant has more than one office, he may obtain a license for each office from which he intends to conduct said business.

Approved November 26, 1997.