Licensing Requirements

• Section 48.56.030 of the Insurance Premium Finance Company Act covers the need for licensing. The state commissioner is responsible for issuing licenses, and you must have a license to engage in the business of insurance premium financing. You must use the official application forms supplied by the commissioner when applying for a license. At the commissioner's request, you may have to submit your fingerprints to the Washington state patrol or the F.B.I., or any other government agency authorized to conduct criminal record background checks. You must renew your license each year on May 1 and pay a fee of $100. Conducting insurance premium finance business without a license is a misdemeanor.
  
  

Records

• If you are engaged in insurance premium finance business, you must keep a record of all your transactions relating to premium finance. The commissioner has the right to exam your records and the you must take the record of your transactions to the commissioner's office for examination if requested. You have to keep all transaction records for a minimum of three years following the date of the last transaction entry. Section 48.56.060 of the act, which governs transaction records, states that you may keep your transaction records in photographic form.
  
  

Service Charge

• An insurance premium finance company can only make service charges in accordance with the contents of section 48.56.090 of the act. This section states that the maximum service charge a company can make is $10 per $100 per year of the agreement. This charge must be calculated from the outstanding balance of the payments due, starting from the date that insurance coverage begins to the date when the final payment is made, in accordance with the terms of the finance agreement.
  
  

Cancellation Of Contract

• If the insured cancels an insurance contract, the insurer must return the unearned premiums to the insurance premium finance company. Unearned premiums refer to the amount paid in advance for insurance coverage that is no longer required by the insured party. The insurance premium finance company can use this amount to cover the amount due to settle the amount that the insured party still has to pay, according to the finance agreement. According to section 48.56.120 of the act, if a surplus remains, the insurance premium finance company must return this to the insured party, unless it amounts to less than $1.