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This entry was published on 2014-09-22
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SECTION 569
Delinquency, collection and cancellation charges; attorney's fees
Banking (BNK) CHAPTER 2, ARTICLE 12-B
§ 569. Delinquency, collection and cancellation charges; attorney's
fees. 1. A premium finance agreement may provide for the payment by the
insured of a delinquency and collection charge on each instalment in
default for a period of not less than five days in an amount of one
dollar to a maximum not in excess of five per centum of such instalment,
provided however, that when any personal, household or domestic
insurance contract are listed in the agreement the charge shall not
exceed five dollars and, provided that only one such delinquency and
collection charge may be collected on any such instalment regardless of
the period during which it remains in default and, if the default
results in the cancellation of any personal, household or domestic
insurance contract listed in the agreement, the agreement may provide
for the payment by the insured of a cancellation charge equal to the
difference between any delinquency and collection charge imposed in
respect to the instalment in default and five dollars.

2. A premium finance agreement may also provide for the payment of
attorney's fees not exceeding twenty per centum of the amount due and
payable under the agreement if it is referred for collection to an
attorney not a salaried employee of the premium finance agency holding
the agreement.

3. Notwithstanding the provisions of this section, a premium finance
agency shall not take or receive from or charge an insured any
cancellation charge or attorney's fees unless, within ten days after
default in the payment of any instalment of a premium finance agreement,
the agency has mailed a notice of the default to the insured at his
address as shown on the agreement and to any insurance agent or broker
named therein at his place of business as shown therein.