Maryland Insurance Commissioner Ralph Tyler has issued cease and desist orders to nine premium finance companies which he says are collecting illegally high interest rates on insurance policies.
The orders call for compliance with the law that finance charges cannot exceed 1.15 percent for each 30 days, charged in advance.
“The law is clear,” Tyler said. “All of the (premium finance companies) covered by the order unlawfully collect interest amounts in excess of the 1.15 percent.”
The companies that have been issued cease and desist orders are among the largest premium finance companies placingbusiness with Maryland Automobile Insurance Fund. Those finance companies are:
— Agency Services Inc. of Linthicum
— Central Acceptance Co. Inc. of Baltimore
— Gebco Insurance Associates Inc. ( T/A Crown Premium Funding Company) of Baltimore
— H&S Finance Co. Inc. of Baltimore
— Insurance Billing Services Baltimore
— Insurance Payment Plan Inc. of Baltimore
— Premium Finance of America Inc. Owings Mills
— Senate Acceptance Corp. of Laurel
— U.S. Capital Associates of Greenbelt
The cease and desist order demands that the practice ends and that any affected premium finance agreements be resubmitted to the insurance administration.
Tyler also said that two of the companies – Insurance Billing Services and U.S. Capital Associates – charge and collect interest even when no policy is issued. “It is outrageous and unlawful to impose a finance charge when nothing is financed,” Tyler said.
For the two premium finance companies that were also cited for charging interest on policies that were never issued, Tyler has ordered these companies to refund this money to all affected consumers plus 6 percent interest.
Source: Maryland Insurance Administration
Was this article valuable?
Here are more articles you may enjoy.