RULE 10.11A - QUARTERLY PAYMENT PLAN
The purpose of the Quarterly Payment Plan is to provide a convenient premium payment plan with direct billing to our policyholders. This payment plan is not available for a mortgagee paying the premium for a policyholder.
1) Definitions
The terms used in this rule are defined as follows:
A. Carryover - any outstanding balance remaining at the end of the previous policy period.
B. Accumulated Credit - any credit adjustment.
C. Remaining Payments - number of quarterly payments (4) minus the number of Quarterly Premiums paid during the policy period to date.
D. Quarterly Premium (initial payment only) - sum of the policy period premium divided by 4, less any Accumulated Credit.
E. Quarterly Premium (subsequent payments only) - total outstanding balance divided by the number of Remaining Payments less any Accumulated Credit.
F. Payment Plan Deposit - 1 Quarterly Premium plus the Service Charge (See Section 2 below) plus any Carryover.
G. Service Charge - The charge to the policyholder for making payments under the Quarterly Payment Plan.
H. Minimum Payment - Quarterly Premium plus the Service Charge.
I. Received - Date postmarked by the Post Office or registered in a Company Branch Office.
2) Service Charge
The Service Charge is $5 per payment. The Service Charge is considered as a premium in our Financial Statement for tax purposes.
3) General Rules
A. Minimum Quarterly Premium
The minimum Quarterly Premium is $25 except for the last remaining payment. If the last remaining payment is less than $10, that amount will be included in the previous Quarterly Premium.
B. Acceptance of Credit Cards
Payments by credit cards are acceptable for payments under the Quarterly Payment Plan.
C. Postdated Checks
Postdated checks are not acceptable for payments under the Quarterly Payment Plan.
D. Payment Notices
Payment Notices will be mailed to the policyholder and will include the following information:
a. Remaining Balance
b. Minimum Payment
c. Service Charge included in Minimum Payment
d. Date Due
4) Establishing Quarterly Payment Plan
A. New Business
The applicant pays the Payment Plan Deposit (New Business/Rewrites) with the application and 1 Quarterly Payment each quarter thereafter until the premium is paid in full. The policyholder may, at their option, prepay any portion of the remaining balance. The minimum Payment Plan Deposit is $25. The Quarterly Premium and the corresponding Minimum Payment will be adjusted to include policy changes as they occur. Credits will be applied immediately and debits will be spread among the Remaining Payments.
B. Existing Business
The insured pays the Payment Plan Deposit (Existing Business) on a renewal billing and 1 Quarterly Payment each quarter thereafter until the premium is paid in full. The policyholder may, at their option, prepay one or more Quarterly Premiums. The minimum Payment Plan Deposit is $25.
The Quarterly Premium and the corresponding Minimum Payment will be adjusted to include policy changes as they occur. Credits will be applied immediately and debits will be spread among the Remaining Payments.
5) Cancellation for Non-Payment of Premium
The payment of premium is due by the date indicated on the Payment Notice. If payment is not received by the date due, a 10 day Notice of Cancellation for non-payment of the Quarterly Premium will be sent to the policyholder. Full payment of the amount shown on the Notice of Cancellation must be received by the date indicated on the notice or the policy is lapsed and coverage is terminated.
All earned premium is calculated on a pro-rata basis.
