N.Y. Banking Law § 569: Delinquency, collection and cancellation charges; attorney's fees

§ 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.