The overall size of the premium financial market is a very difficult decision, as there is no sector group or organization to establish statistics at the national level. Industry insiders say the market is about $40 billion in insurance premiums for non-life and accident insurance, which are funded annually, or about $158 million per business day. Phone: (877) 701-1212Email: Glenview.customerservice@afco.com Since the 1950s, 48 of the 50 states have passed laws providing legal lending powers for licensed premium finance companies. Only Arkansas and Nebraska do not have premium financing status, although the existence of status does not necessarily mean that the industry is fully regulated or sued. These statutes set requirements for licensing, capitalization, maximum rates that can be charged, cancellation requirements, administrative requirements and, in some countries, the types of forms to be used. It is equally important that the insurance industry has been amended to order insurance companies operating in that particular state to recognize the legal rights of premium finance companies and to know how, when and to whom the money should be returned in the event of policy termination. Insurance companies that do not comply may be subject to regulatory or even criminal sanctions. The credit structure was sound, but the insurance statutes of the time only required that the insurance company at the request of the insured, not the financial company, cancel and return the premium not paid to the insured, not to the financial company. The legal protection enjoyed by premium financial companies today did not exist. The interim response was a series of ancillary agreements negotiated between AFCO and hundreds of insurance companies, in which insurance companies agreed to terminate the policies if AFCO requested them and return the money to AFCO.
Hundreds of insurance companies have benefited from financing without any premium financing companies being established. Over time, the legislation filled the gaps, so that the unearned premium was sent directly to the financial company and those agreements were no longer deemed necessary.