3 AAC 07.335. Refund of unearned service charge on prepaid accounts

(a) A borrower may prepay the outstanding balance on a premium finance agreement in full at any time before the due date of the final installment. If a borrower does prepay the outstanding balance in full, the borrower is entitled to receive a refund credit of the unearned service charge on the account, computed from the date that the prepayment is received by the licensee.

(b) A refund credit of the unearned service charge made under this section must be computed by the licensee in accordance with the sum-of-the-digits method, commonly known as the Rule of 78's.

(c) The nonrefundable charge of a maximum of $10 per premium finance agreement may be excluded from the computation for a refund under this section, since interest may not be charged for that fee.

History: Eff. 4/16/2000, Register 154

Authority: AS 06.40.120

AS 06.40.180

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