KRS 304.30-110: Cancellation of insurance contract upon default.

(1) When a premium finance agreement contains a power of attorney enabling the

premium finance company to cancel any insurance contract or contracts listed in the

agreement, the insurance contract or contracts shall not be canceled by the premium

finance compa ny unless such cancellation is effectuated in accordance with this

section.

(2) Not less than ten (10) days' written notice shall be mailed to the insured of the intent

of the premium finance company to cancel the insurance contract unless the default

is cured within such ten (10) day period.

(3) After expiration of such ten (10) day period, the premium finance company may

thereafter request in the name of the insured, cancellation of such insurance contract

or contracts by mailing to the insurer a notice o f cancellation, and the insurance

contract shall be canceled as if such notice of cancellation had been submitted by

the insured himself, but without requiring the return of the insurance contract or

contracts. The premium finance company shall also mail a notice of cancellation to

the insured at his last known address.

(4) All statutory, regulatory, and contractual restrictions providing that the insurance

contract may not be canceled unless notice is given to a governmental agency,

mortgagee, or other thi rd party shall apply where cancellation is effected under the

provisions of this section. The insurer shall give the prescribed notice in behalf of

itself or the insured to any governmental agency, mortgagee, or other third party on

or before the second bu siness day after the day it receives the notice of cancellation

from the premium finance company and shall determine the effective date of

cancellation taking into consideration the number of days' notice required to

complete the cancellation.

(5) Whenever an insurance contract is canceled in accordance with this section, the

insurer shall return whatever gross unearned premiums are due under the insurance

contract to the premium finance company effecting the cancellation for the account

of the insured or insureds.

(6) In the event that the crediting of return premiums to the account of the insured

results in a surplus over the amount due from the insured, the premium finance

company shall refund such excess to the insured provided that no such refund shall

be required if it amounts to less than one dollar ($1).