This question was answered based upon current rules, regulations & statutes in effect on July 24, 2019
I have spoke to several CSR about the following question and seems that we have different answers.
If insured cancelled for non pay 3 years or more we (as agents) do NOT have to collect the unpaid premium.
If less than 3 years (2 years, 11 months) we do need to collect it. Is this correct.
Some agents are saying that it is more than 2 years we don’t need to collect.
Kathy Cormier: Here is the MAIP Rule:
RULE 14. DEPOSIT PREMIUM RULE
A company, its producer or any broker may require deposit premium prior to the issuance of a policy provided the per vehicle deposit does not exceed 25% for new business or 20% for renewal business of the applicable annual premium for the insurance requested in accordance with the MAIP Rules of Operation. If the applicant has been in default in the payment of any premium for automobile insurance or merit rating adjustment during the preceding 24 months which resulted in the cancellation of that policy, the applicant will be required to provide a premium deposit of 80% of the MAIP premium, or if known, 100% of the insurer’s voluntary premium.
Agent: I just want to make sure I understand this correctly. We as agents need to go back 2 years (preceeding 24 months) and collect any unpaid premium. Is that a correct interpretation?
Kathy Cormier: As agents we have always collected the unpaid premium when we re-wrote the policy. You can tell the client that they need to show you a receipt that it has been paid if you do not want to collect the payment...I would make sure to submit a copy of the receipt as proof it was paid or keep a copy in their file.
Agent: So if I have an insured that has uncollected premium from 3+ years ago. I should collect that premium? I thought we only go back 3 years anything later we don’t have to collect.
Is that incorrect?
Kathy Cormier: You need to look back 2 years (24 months).
If the applicant has been in default in the payment of any premium for automobile insurance or merit rating adjustment during the preceding 24 months which resulted in the cancellation of that policy,
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