                                 CODE OF VIRGINIA

INTEREST WITH RESPECT TO CREDIT EXTENDED OR MONEY LENT FOR PREMIUMS ON CERTAIN
POLICIES (§ 38.2-1806)

A. Any agent licensed in this Commonwealth to sell, solicit or negotiate
property and casualty insurance, mutual assessment property and casualty
insurance, or ocean marine insurance may charge interest on credit extended by
the agent to the holder of any fire, casualty, surety or marine insurance
policy, written or being serviced by or through such agent, for the premium due
on such policy. The rate of interest shall not exceed one and one-half percent
per month of the unpaid balance. However, the extension of credit or the making
of the loan shall not be in conflict with the contract between the agent and the
insurer that issues the policy.

B. A licensed insurance agent extending credit as authorized in this section
shall not be required to comply with the provisions of Chapter 47 (&#xA7;
38.2-4700 et seq.) of this title with respect to the licensing of premium
finance companies.

C. Notwithstanding the provisions of &#xA7;&#xA7; 38.2-2114 and 38.2-2212, if
any insured fails to discharge any of his obligations to a licensed insurance
agent when due in connection with the payment of any premium for a policy of
insurance, that agent may request in writing that the insurer cancel such policy
for nonpayment of premium. Within ten business days of the receipt of such
written request, which shall also state the amount owed the agent by the
policyholder, the insurer shall deliver or mail a written notice of cancellation
to the named insured at the address shown in the policy and to any mortgagee or
lienholder. This notice shall state the date on which the cancellation shall
become effective. That date shall be established by giving at least the number
of days notice prior to cancellation that are required by statute or the terms
of the policy. Except for statutory requirements and contractual obligations,
there shall be no liability on the part of the insurer for improper cancellation
under this section if the insurer (i) in good faith relies upon the request of
the agent and (ii) gives notice of cancellation in compliance with the
provisions of this section.

D. The insurance agent shall have a lien on any return premium for the policy to
the extent of the amount owed by the policyholder. Within thirty calendar days
of the mailing of the notice of cancellation, the insurer shall forward that
amount to the agent and shall forward the remainder, if any, of the return
premium to the policyholder.

HISTORY: Code 1950, § 38.1-293.1; 1970, c. 370; 1979, c. 513, § 38.1-327.7;
1980, c. 581; 1985, c. 33; 1986, c. 562; 1987, c. 521; 2001, c. 706.