69O-163.003. Cancellation and Refund Requirements

Cancellation and refunds shall be required in accordance with the following provisions applicable to each classification, in order to best protect the borrower from loss of funds by short-rate cancellation or termination of insurance, and to further avoid duplication or overlapping of insurance coverage when the loan is prepaid, refinanced or renewed.

(1) At the time the indebtedness is discharged, any remaining insurance coverage must be promptly terminated unless the insured requests in writing that the coverage be continued, if such continuance is provided for in the policy.

(2) Upon termination of the insurance coverage, the company shall promptly return the unearned premium to the person entitled thereto.

(3) In addition to the above, a refund of 100% of any payment for insurance made in advance of a scheduled payment date subsequent to the date of termination shall be returned to the person entitled thereto.

(4) The formula to be used in computing return premiums (or unearned premiums) shall be filed with and approved by the Director. The minimum basis adopted by any company shall not be less than the Rule of 78 for declining balance only and the actuarial method, which allocates premium in proportion to the remaining insurance risk, for all other types of coverages. If the refund or credit is less than $1.00, no refund or credit is required.

Specific Authority 624.308(1), 627.678 FS. Law Implemented 624.307(1), 627.553, 627.569, 627.678(2), 627.681 FS. History–Repromulgated 12-24-74, Formerly 4-7.03, 4-7.003, Amended 2-11-03, Formerly 4-163.003.