§ 3428. Cancellation of insurance contracts; return premiums; financed
insurance premiums. (a) Except as provided in subsection (e) of this
section, whenever an insurance contract made or issued in this state is
cancelled or otherwise terminated by the insured before the expiration
thereof in accordance with the terms of such contract, the earned
premium to be retained by the insurer shall be determined by the
applicable rate filing, if any, otherwise in accordance with the
provisions of such contract.

(b) No authorized insurer or its agent may knowingly accept payment of
premiums, for an insurance contract made or issued in this state,
advanced under a premium finance agreement as defined in section five
hundred fifty-four of the banking law by or for any person, firm,
corporation or association who is not authorized either to engage in the
business of a premium finance agency or to make loans for the purpose of
financing insurance premiums in accordance with the banking law, or to
include an amount for insurance in a retail instalment contract or
obligation in accordance with the personal property law.

(c) No authorized insurer shall honor a power of attorney or other
authority to cancel an insurance contract executed by an insured in
connection with insurance premium financing, except in accordance with
section five hundred seventy-six of the banking law. Voluntary
advancement of a premium to the insurer by an agent or broker, where no
additional charge over and above the premium has been imposed upon the
insured and the insured has not signed a note or other obligation to pay
the premium shall not be construed to be within the meaning of insurance
premium finance agreement as defined in article twelve-b of the banking
law.

(d) Whenever an insurance contract the premiums for which are advanced
under a premium finance agreement as defined in section five hundred
fifty-four of the banking law, is cancelled, the insurer or insurers
within a reasonable time not to exceed sixty days after the effective
date of the cancellation shall return whatever gross unearned premiums
are due under the insurance contract or contracts to the bank, lending
institution, premium finance agency or sales finance company, for the
benefit of the insured.

(e) Whenever an insurance contract, issued by or on behalf of an
authorized insurer or insurers, the premiums for which are advanced
under a premium finance agreement as defined in section five hundred
fifty-four of the banking law, is cancelled, upon such cancellation the
authorized insurer or insurers shall return the gross unearned premiums
due under the insurance contract or contracts, on a pro rata basis to
the bank, lending institution, premium finance agency or premium finance
company, for the benefit of the insured, provided, however, that such
authorized insurer or insurers shall be entitled to retain a minimum
earned premium on the policy of ten percent of the gross premium or
sixty dollars, whichever is greater.