ARTICLE 3. Provisions of Premium Finance Agreements [18605. - 18611.]

Cal. Financial Code - FIN 3.

in effect

Cal. Financial Code - FIN § 18605. Section 18605.

A premium finance agreement shall be in writing and the printed portion thereof shall be in at least eight-point type. The agreement shall set forth: 1. The names and addresses of the insured and the company, and the date of the agreement. 2. A description of the insurance contracts for which the premiums are advanced including the total amount of the premiums and fees and a specific breakdown thereof by policies and a general description of coverages. 3. The amount of the downpayment. 4. The cost, if any, for credit life insurance. 5. The principal balance. 6. The finance charges. 7. The unpaid balance. 8. The due date of the first installment. 9. The number, amount and frequency of payment of the installments. 10. A statement that the insured may prepay the full amount due and receive a refund credit of the unearned finance charge, in the manner provided by Section 18629.

Cal. Financial Code - FIN § 18606. Section 18606.

A premium finance agreement shall not be executed by or on behalf of the insured when it contains any blank space to be filled in thereafter; however, if any insurance contract, premiums for which are advanced or to be advanced under the agreement, has not been issued at the time of execution and the premium finance agreement so provides, the name of the insurer, the policy number and the due date of the first installment may be left blank and inserted later. In connection with the financing of an additional premium or policies, upon the completion of the computations necessary to determine the amount of the revised unpaid balance and the number and amount of future installment payments, the company shall mail notice of the changes to the insured at his address shown in the agreement. The notice of the revised finance agreement shall set forth: (a) The unpaid balance, as adjusted. (b) The number and frequency of each installment under the revised finance agreement. (c) The amount of each installment. (d) A statement to the insured that he may disaffirm the revised finance agreement by mailing, to the company’s office, notice of his intention to do so within 10 days of the company’s mailing of the notice of the revised finance agreement. (e) A statement to the insured that the company may, in the event he disaffirms, cancel his insurance contract or contracts as provided in Section 18608, except that the 10-day period required by that section shall be deemed to commence with the mailing of the notice of the revised finance agreement.

Cal. Financial Code - FIN § 18607. Section 18607.

Upon receipt of the loan form the company shall promptly mail to the insured at the address shown in the agreement, or deliver to the insured personally, either a notice to the effect that the application for a loan is rejected or a copy of the agreement, thereby signifying acceptance by the company, or if the agreement contained any blank space when it was executed by or on behalf of the insured and such blank space was subsequently filled in, a copy of the agreement as so filled in and the insured shall in such event have 10 days in which to disaffirm his obligation under the premium finance agreement by giving written notice thereof to the producer and the company. In the event the agreement is not disaffirmed by the insured, the agreement shall be as binding an obligation of the insured as if the agreement were complete on its face when it was executed.

Cal. Financial Code - FIN § 18608. Section 18608.

(a) A premium finance agreement may contain a power of attorney or other authority enabling the company to cancel the insurance contract or contracts listed in the agreement in the event of default in the terms thereof. (b) Upon the exercise of such a right to cancel, the company shall mail to the insured, to his or her last known address or to the address shown on the premium finance agreement at least 10 days prior to cancellation, a notice of its intent to cancel the insurance contract or contracts. (c) The liability of a company to any person or corporation upon the exercise of such a right or authority of cancellation shall be limited to the amount of the principal balance, except in the event of willful failure by the company to mail the notice required by this section.

Cal. Financial Code - FIN § 18609. Section 18609.

All statutory, regulatory and contractual restrictions providing that the insured or the insurer shall not cancel the insurance contract unless the insured or the insurer first satisfies such restrictions by giving a prescribed notice of cancellation to a governmental agency, the insurer, the insured, the holder of a security interest in the subject of the insurance, or other prescribed party, shall not be affected by the provisions of this division. However, any cancellation notice period required by such statutory, regulatory or contractual restriction shall not be cumulative to the period required by Section 18606 or 18608. If cancellation of the insurance contract is initiated by the company under the terms of this division, the insurer shall (in accordance with the requirement for a prescribed notice), on behalf of itself or the insured, give such notice to the governmental agency, the holder of a security interest in the subject of the insurance or other prescribed party; and the insurer shall determine and calculate the effective date of cancellation (in accordance with the terms of that prescribed notice) from the date it receives the notice of request for cancellation from the company. In no instance shall the effective date of cancellation be prior to that established by the company.

Cal. Financial Code - FIN § 18610. Section 18610.

The insurer within a reasonable time after the effective date of cancellation shall return whatever gross unearned premiums or accrued dividends are payable under the insurance contract to the company, which financed the insurance contract, for the benefit of the insured. Whenever any funds are received by the company which are in excess of the amount due to the company, such an excess shall be remitted promptly to the insured or to his order or to the insurance agent for the account of the insured.

Cal. Financial Code - FIN § 18611. Section 18611.

At the time of mailing the notice required by Section 18606 or 18608, the employee of the company who is doing the mailing shall prepare and sign an affidavit setting forth the following: (a) The name and address of the employee doing the mailing. (b) That the employee is over 18 years of age. (c) The date and place of deposit in the mail. (d) The addressee’s name and address as shown on the envelope mailed. (e) That the envelope weas sealed and deposited in the mail with the postage thereon fully paid. An affidavit of mailing, prepared as prescribed in this section, shall raise a rebuttable presumption that the notice was mailed to the addressee stated in the affidavit.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026