59A.11 CANCELLATION OF INSURANCE CONTRACT UPON DEFAULT.
Subdivision 1. Grant of authority.
When a premium finance agreement contains a power
of attorney or other authority enabling the insurance premium finance company to cancel any
insurance contract listed in the agreement, the insurance contract or contracts shall not be
canceled by the premium finance company unless such cancellation is effectuated in accordance
with this section.
Subd. 2. Notice required.
Not less than ten days' written notice shall be mailed to the
insured setting forth the intent of the insurance premium finance company to cancel the insurance
contract unless the default is cured prior to the date stated in the notice. The insurance agent or
insurance broker indicated on the premium finance agreement shall also be given ten days' notice
of this action in a manner agreed upon between the insurance premium finance company and
insurance agent or insurance broker.
Subd. 3. Regulation of required notice.
(a) Pursuant to the power of attorney or other
authority referred to above, the insurance premium finance company may cancel on behalf of the
insured by mailing to the insurer written notice stating when thereafter the cancellation shall be
effective, and the insurance contract shall be canceled as if such notice of cancellation had been
submitted by the insured personally, but without requiring the return of the insurance contract. In
the event that the insurer or its agent does not provide the insurance premium finance company
with a specific mailing address for the purposes of receipt of the above notice, then mailing by the
insurance premium finance company to the insurer at the address which is on file and of record
with the commissioner of commerce pursuant to the provisions of chapters 60A and 72A shall be
considered sufficient notice under this section. The notice requirements of this paragraph only
apply if an insurance premium finance company and an insurer have not agreed on a method
of providing notice of cancellation.
(b) The insurance premium finance company shall also mail a notice of cancellation to the
insured at the insured's last known address.
(c) Written notice of the cancellation must also be given to the insurance agent or insurance
broker indicated on the premium finance agreement. Written notice to the insurance agent or
broker required by this paragraph may be given in a manner agreed upon between the insurance
premium finance company, insurer, agent, or broker.
Subd. 4. Notice to third party.
Where statutory, regulatory or contractual restrictions
provide that the insurance contract may not be canceled unless notice is given to a governmental
agency, mortgagee, or other third party, the insurer shall give the prescribed notice on behalf of
itself or the insured to the governmental agency, mortgagee or other third party within ten days
after the day it receives the notice of cancellation from the premium finance company. When the
above restrictions require the continuation of insurance beyond the effective date of cancellation
specified by the premium finance company, the insurance shall be limited to the coverage to which
the restrictions relate and to the persons they are designed to protect.
History: 1974 c 353 s 11; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444; 1992
c 564 art 1 s 11; 1997 c 157 s 54,55