A premium finance company must register with the Commissioner before engaging in business as a premium finance company in the State. An insurer or insurance producer must register with the Commissioner before engaging in the business of financing premiums in the State.

To engage in business as a premium finance company in the State, each premium finance company shall elect to: maintain a net worth of at least $250,000 calculated under generally accepted accounting principles; file with the Commissioner an irrevocable letter of credit in the amount of $50,000 issued by a financial institution; deposit with the State Treasurer cash in the amount of $50,000; or file with the Commissioner a bond that: is in favor of the State; is in the penal sum of $50,000; is executed by an authorized surety insurer; and is conditioned that the premium finance company will account for and pay over to the person entitled to receive it all money belonging to the person that comes into the possession of the premium finance company, including unearned premiums due to an insured and unearned commissions due to an insurer. A bond shall remain in force until the surety insurer is released from liability by the Commissioner or until the bond is canceled by the surety insurer. The total liability of the surety insurer under a bond may not exceed the penal sum of the bond. The surety insurer may cancel a bond after filing written notice with the Commissioner at least 30 days before the effective date of the cancellation. A cancellation under this paragraph does not affect any liability that accrued before the cancellation. After notification of the cancellation of the bond, the premium finance company shall act promptly to replace the bond. If the premium finance company fails to act promptly to replace the bond, the Commissioner shall deny, suspend, revoke, or refuse to renew the registration of the premium finance company until the required bond is filed. If, at any time, the premium finance company fails to comply with subsection (a) of this section, the Commissioner shall deny, suspend, revoke, or refuse to renew the registration of the premium finance company until the premium finance company complies with subsection (a) of this section.

An applicant for initial registration shall: file with the Commissioner: an application on the form that the Commissioner requires; in the case of a corporation or limited liability company, a certificate of good standing issued by the State Department of Assessments and Taxation; evidence of compliance with § 23-202 of this subtitle; the form of the premium finance agreement to be used; and the finance charge, initial service fee, and all other fees and charges to be applied; and pay to the Commissioner an application fee of $250. The registration application shall include the following information: the name, business address, and telephone number of the premium finance company; and the name and business address of each officer, director, principal, and partner of the premium finance company. A registration application may require the applicant to disclose the identity, trade names, and names of managers and owners of the applicant.

When an applicant complies with the filing requirements and pays the registration fee to the Commissioner in accordance with § 23-203 of this subtitle, the Commissioner shall determine whether the applicant meets the requirements of this title. The Commissioner shall deny registration to an applicant if the Commissioner determines that the applicant has submitted an incomplete registration. The Commissioner shall register each applicant that meets the requirements of this title.

A registration expires on the first July 1 after its effective date unless it is renewed as provided in this section. Before a registration expires, the registrant may renew it for an additional 1-year term if the registrant: files with the Commissioner: a renewal application on the form that the Commissioner requires; in the case of a corporation or limited liability company, a certificate of good standing issued by the State Department of Assessments and Taxation; and evidence of compliance with § 23-202 of this subtitle; and pays to the Commissioner a renewal fee of $50. The Commissioner shall renew the registration of each registrant that meets the requirements of this section.

The Commissioner shall require a premium finance company to report, on forms provided by the Commissioner, changes in officers, directors, owners, trade names, principals, partners, business addresses, and telephone numbers within 30 days after a change occurs. A premium finance company shall file all changes to: the form of the premium finance agreement used by the premium finance company; and the finance charge, initial service fee, and any other fees and charges applied by the premium finance company. A premium finance company may not use a premium finance agreement form or apply a fee or charge unless the filing required under paragraph (1) of this subsection is approved by the Commissioner. A premium finance company shall disclose to the Commissioner, on written request, the method or formula used to calculate the finance charges and amount of refund on cancellation of the insurance contract.

Each premium finance company: shall maintain records of its premium finance transactions for at least 3 years after making the final entry with respect to a premium finance agreement; shall allow the Commissioner to examine the records; and may keep the records in photographic, imaging, microfilm, microfiche, electronic data processing, computer, or facsimile form.

Subject to the hearing provisions of Title 2 of this article, the Commissioner may deny a registration to an applicant or suspend, revoke, or refuse to renew the registration of a registrant if the Commissioner finds that the applicant or registrant has: failed to comply with a lawful requirement of the Commissioner under this title; violated a provision of this title; made a material misstatement in the application for registration; engaged in fraudulent or dishonest practices; or demonstrated incompetency or untrustworthiness to engage in the business of a premium finance company. Instead of or in addition to suspending, revoking, or refusing to renew a registration, the Commissioner may: impose on the registrant a penalty of not less than $25 but not exceeding $1,000 for each violation of this article, up to a maximum of $20,000 in the event of multiple violations; or require that restitution be made by a registrant that violates this title to a person that has suffered financial injury as a result of a violation of this title. For purposes of this subsection, restitution means the sum of money that, if paid to a person that suffers financial injury as a result of violation of this title, will restore the person to the same financial position the person would have been in had the violation not occurred. A premium finance company that delegates administration of a premium finance agreement to a third party is responsible for a violation of any provision of this title by the third party in the administration of the premium finance agreement, regardless of the delegation. For purposes of this subsection, the following acts by an insurance producer in relation to a premium finance agreement are not considered to be the administration of the premium finance agreement: signing a premium finance agreement; accepting payments; or issuing receipts.

A registrant may surrender a registration by delivering to the Commissioner written notice of the surrender. Surrender of a registration does not affect the registrant’s civil or criminal liability for acts committed before the surrender.

Suspension, revocation, or surrender of a registration does not affect the obligation of an insured under a lawful premium finance agreement previously acquired or held by the registrant.