Procedures Related to Premium Financing
- Safety will only accept premium that is financed by companies that are licensed by the Massachusetts Division of Banks or are otherwise qualified to engage in the business of a premium finance agency, as provided by M.G.L. c. 255C, §2.
- One policy cannot be financed by more than one premium finance agency.
- Producers may only finance existing coverage. Financing for anticipated coverage (e.g., comprehensive and collision coverage added after preinspection requirements have been fulfilled) is prohibited.
- Safety recommends that when a policy is financed, the most effective means to ensure compliance with Massachusetts law by producers, the premium finance agency, and Safety is to have the premium finance agency finance 100% of the total policy premium. Hence, down payments will be paid to the premium finance agency and the premium finance agency will remit 100% of the premium to Safety.
- Producers must immediately notify Safety and submit a Finance Company Form for all policies that are financed for both new business and renewals. The Finance Company Form can be accessed electronically or can be obtained by calling Billing at (800) 951-2100 x5147.
- Other than the original down payment, producers are not authorized to collect premium finance agency payments for Safety’s policyholders.
- The premium finance agency must mail a copy of the cancellation notice to Safety at the same time that the cancellation notice is delivered to the policyholder. Safety will not process premium finance agency cancellation notices that are received after the cancellation effective date.
- As provided by M.G.L. c. 255C, § 21, if the premium finance agency wants to rescind a pending cancellation notice, then it must do so in writing. Safety must receive that written notice on or before the date on which the policy’s cancellation will be effective. We will not process a request for rescission that is verbally requested by a producer or premium finance agency. Safety reserves the right to return written rescission requests to the premium finance agency if such rescission notices are received late.
Comprehensive procedures can be obtained by calling Safety at
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