N.Y. Banking Law § 577-a: Premium finance agreements

§ 577-a. Premium finance agreements. 1. Any amount advanced by a

premium finance agency, with regard to any insurance policy issued

pursuant to any plan established under article fifty-three of the

insurance law shall be paid either by check or draft made payable to the

insurance company, or, if the company is not known, by check or draft

made payable to the entity which pursuant to the plan established under

article fifty-three of the insurance law designates which insurer shall

insure or service the risk. The check or draft shall not be made payable

to the insurance agent or broker.

2. Where insurance coverage is procured through a wholesale producer

for insurance policies financed with a premium finance agency, other

than policies subject to subdivision one of this section:

(a) Prior to or contemporaneously with the advancement of any funds to

an insurance retail producer who has procured an insurance policy

through a wholesale producer, the retail producer shall provide the

premium finance agency with the name and address of the wholesale

producer through whom coverage was procured and, if available, the

policy number of the insurance policy being financed, in writing;

(b) The premium finance agency shall notify, in writing, the wholesale

producer and the insurance company of the gross premium, the borrower's

name and address, and, if available, the policy number, within ten (10)

business days of acceptance of the agreement;

(c) Failure by the retail producer to comply with paragraph (a) of

this subdivision shall be a violation of subsection (d) of section

twenty-one hundred twenty of the insurance law, and the retail producer

shall be liable for actual damages caused by his or her failure to

disclose;

(d) For the purposes of this subdivision, a "retail insurance

producer" or "retail producer" means an insurance producer who directly

deals with an insured; a "wholesale insurance producer" or "wholesale

producer" means the producer from whom or through whom the retail

producer has procured coverage on behalf of the insured.