402:81 Insurance Premium Refunds. –
I. Whenever an insurer owes a refund on an insurance premium paid, that insurer shall pay the refund within 30 days of the date when the refund becomes due.
(a) When an insurance policy is cancelled by a named insured, a refund shall be due from the company or its appointed producer upon receipt of:
(1) The original policy to be cancelled; or
(2) A signed lost policy release; or
(3) A cancellation request from the insured which has been submitted in accordance with provisions of the policy or statute.
(b) When an insurance policy is cancelled by an insurer, a refund shall become due upon the date of cancellation as stated in the notice of cancellation.
(c) For auditable policies:
(1) Audits shall be completed promptly, no more than 120 days after the expiration or cancellation of the policy, provided that there is no bona fide dispute; and
(2) If there is no bona fide dispute, the refund of gross unearned premium shall become due on the date of the completed audit or 120 days after the expiration or cancellation of the policy, whichever occurs first.
(3) Any insurer that violates this subparagraph shall be subject to the penalty provisions of RSA 402:50.
(4) In cases where the amount of refund is in bona fide dispute, the refund shall not become due until the dispute is resolved and the audit is completed. The insurer shall notify the insured in writing that there is a bona fide dispute and this notice shall toll the 120-day time period until the dispute is resolved. Upon resolution of the dispute, the insurer shall proceed to complete the audit within the time remaining in the 120-day time period.
(5) A bona fide dispute includes the insured's failure to cooperate with the audit, provided the insurer has notified the insured of:
(A) The acts or omissions that constitute the insured's failure to cooperate; and
(B) The consequences of the insured's failure to cooperate, including delay in the completion of the audit and payment of any refund due.
(d) This paragraph shall not apply to retrospectively rated policies.
(e) No refund shall be required if the return premium is $1 or less.
II. Whenever the premium refunds described in paragraph I are refunded to an authorized third party, such as an insurance producer or a party with cancellation power of attorney from the insured, the authorized third party shall credit the premium refund for the account of the named insured. In the event that crediting of return premiums to the account of the named insured results in a surplus over the amount owed the authorized third party by the named insured, the surplus shall be paid to the named insured within 10 days of receipt of the return premium, being credited to the third party, provided that no such refund shall be required if it amounts to less than $1.
III. For any refund that is not paid to the named insured within the specified period set forth in paragraph I, the party to whom the premium is owed shall be entitled to interest beginning on the first day after the expiration of the period, at a rate determined by the state treasurer pursuant to RSA 336:1, II. Any interest developed because of late refunding shall ultimately benefit only the named insured. This paragraph shall not apply to retrospectively rated policies.