Section 3.23.315. Refund on prepayment.

	(a)  A borrower may prepay the outstanding balance due under a premium finance agreement or agreement to extend credit in full at any time before the due date of the final payment, and is entitled to receive a refund credit of interest, computed from the date the prepayment is received by the licensee. A refund must be computed on the total amount of precomputed charges, except that the nonrefundable charge of a maximum of $10 per premium finance agreement or agreement to extend credit must be excluded from the refund computation since interest may not be calculated on that charge.  
	(b)  If a premium finance agreement or agreement to extend credit is terminated because of a borrower's default, the borrower is entitled to receive a refund credit of interest as though a prepayment had occurred. A refund credit allowed by this subsection must be computed from the date of cancellation of the insurance policy for which the premium loan was made.  
	(c)  A refund credit of interest must be computed in accordance with the sum-of-the-digits method, commonly known as the Rule of 78's.  

Authorities

21.06.090;21.36.490;01.05.031;21.36.122;44.62.125

Notes

Authority

AS 21.06.090 AS 21.36.490 Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031, renumbered former AS 21.36.122 as AS 21.36.490. As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125(b)(6), to the authority citation that follows 3 AAC 23.315, so that the citation to former AS 21.36.122 now refers to the renumbered statute, AS 21.36.490.

History

Eff. 3/11/98, Register 145

References

3.23.315