Chapter 1301:8-4 Finance Companies

1301:8-4-01 Definitions and general provisions.

(A) "Finance charge" as used in sections 1321.71 to 1321.84 of the Revised Code and Chapter 1301:8-4 of the Administrative Code means the finance charge rate authorized in such sections, and shall not have the meaning set forth for that term in the federal reserve board regulation Z on truth in lending, 12 C.F.R. 226.4 as amended on November 1, 2008. The acquisition charge permitted in division (C) of section 1321.79 of the Revised Code is a finance charge. Where the acquisition charge is nonrefundable it shall be treated as a finance charge for purposes of division (D) of section 1321.79 of the Revised Code.

(B) For purposes of sections 1321.71 to 1321.84 of the Revised Code and Chapter 1301:8-4 of the Administrative Code, "date of cancellation" shall mean the date specified in the notice of cancellation mailed by the licensee to the insurer. The licensee may assess a cancellation charge on or after the date of cancellation. In the event of the reinstatement of a canceled insurance policy, the licensee may assess a cancellation charge on each additional occasion that it mails a notice to the insurer.

(C)

(1) As used in sections 1321.73 and 1321.74 of the Revised Code and Chapter 1301:8-4 of the Administrative Code, "net worth" shall mean the difference between total assets and total indebtedness, as determined by generally accepted accounting principles as amended on November 1, 2008.

(2) The division may by written notice require an audited financial statement by an independent certified public accountant, the cost of which shall be paid by the licensee or applicant.

Replaces: 1301:8-4-04, 1301:8-4-11, 1301:8-4-12

Effective: 08/01/2009
R.C. 119.032 review dates: 05/24/2014
Promulgated Under: 119.03
Statutory Authority: 1321.77
Rule Amplifies: 1321.79 , 1321.73 , 1321.74
Prior Effective Dates: 7/10/1995, 6/3/2004

1301:8-4-02 Licensing.

(A) No licensee shall transact or solicit business under sections 1321.71 to 1321.84 of the Revised Code under any other name than that set forth on its license.

(B) Licenses issued under sections 1321.71 to 1321.84 of the Revised Code are not transferable and not assignable.

(C) At least thirty days prior to the effective date of an address change, each licensee shall notify the division of financial institutions of a change in the address shown on its license by filing a relocation application on a form approved by the division. A new license must be obtained prior to conducting business at the new location. If the licensee is relocating its place of business to a location outside the municipal corporation in which it is currently located, the licensee must also file a license application fee.

(D) If a renewal application together with the proper fee is not received by the superintendent by the thirtieth day of June, the license shall expire and shall not be considered renewed, and the applicant shall cease activity as an insurance premium finance lender. Provided, however, that nothing herein shall impair the ability of a person to collect on accounts lawfully entered into prior to the expiration of its license.

(E) In connection with division (C) of section 1321.74 of the Revised Code, no active licensee may establish or maintain a branch office for purposes of making loans or accepting payments without first obtaining a license for that location from the division of financial institutions.

(F) An application for approval of such a branch office shall state the proposed location, the function to be performed there and such other information which the division may require, and shall be accompanied by a license fee and, if required by the division, an investigation fee of two hundred dollars.

Effective: 08/01/2009
R.C. 119.032 review dates: 04/10/2009 and 05/24/2014
Promulgated Under: 119.03
Statutory Authority: 1321.77
Rule Amplifies: 1321.74
Prior Effective Dates: 12/1/1979, 7/10/1995, 6/3/2004

1301:8-4-03 Record keeping requirements.

(A) In connection with section 1321.76 of the Revised Code, each active licensee shall maintain required records for all premium finance agreements made pursuant to sections 1321.71 to 1321.83 of the Revised Code at either the licensed office or any other location approved in writing by the division of financial institutions.

(B) Required records shall be maintained current and shall be available at regular business hours and promptly upon demand for review by the division. The required records shall be maintained for at least two years from the final entry date on the loan account. For purposes of recordkeeping, "current" means within thirty days from the date of the occurrence of the event required to be recorded. Required records include:

(1) A copy of each premium finance agreement entered into by the licensee which shall be kept in one file by consecutive account number or contract number.

(2) A ledger record or payment history which shall be kept for each open, canceled and prepaid premium finance agreement. The ledger record or payment history shall disclose the following information:

(a) Account or contract number;

(b) Insured's name and address;

(c) Type and effective date of insurance policy;

(d) Date finance charges begin to accrue;

(e) Annual percentage rate calculated pursuant to division (A) of section 1321.71 of the Revised Code;

(f) The disclosed federal annual percentage rate as disclosed to the insured or potential insured;

(g) Acquisition charge;

(h) Amount financed;

(i) Dollar amount of finance charge;

(j) Total of payments;

(k) Terms of repayment;

(l) Delinquency charge;

(m) Cancellation charge;

(n) Check collection charge;

(o) A chronological entry of all credits, debits, payments and charges received or assessed in connection with the premium finance agreement, recorded thereon in an identifiable manner, in order to show the actual date of receipt, assessment or disbursement and the running balance due on the account after each payment.

(3) All premium finance agreements, intent notices, cancellation notices, and other notices or documents given or used in connection with such agreements, shall be identified by the account or contract number.

(4) A daily cash receipt and disbursement record, which shall include the account or contract number and the name of the insured parties, and shall document all transactions involving either the receipt or disbursement of money on the account of insured parties, as well as the actual date of any such transaction.

(5) An alphabetical index of all insured parties identified by account or contract number.

(6) A copy of due bills, receipts, invoices or other evidence relating to any check collection charge incurred during the past two years in excess of ten dollars paid by or on behalf of the insured to or through the licensee for any dishonored check, negotiable order of withdrawal, share draft or any other negotiable instrument.

(C) Other methods of recording data, keeping records and keeping books, such as electronic or computerized methods, may be used in lieu of the methods described in this rule, provided written printouts or hard copies of the required data are readily available at each licensed location in a form approved, in advance, by the division.

(D) In order to reduce the risk of consumer fraud and related harms, including identity theft, licensees shall be required to comply with the provisions of the "Fair and Accurate Credit Transactions Act of 2003," 117 Stat. 1952, 15 U.S.C. 1681w as in effect on January 1, 2008, the "Gramm-Leach-Bliley Act," 113 Stat. 1138 (1999), 15 U.S.C. 6801 as in effect on January 1, 2008, and the rules promulgated pursuant to those federal acts, including 16 C.F.R. 682, as in effect January 1, 2008, pertaining to the maintenance, security, and disposal of consumer information and records.

(E) Before ceasing to conduct or discontinuing business as a licensee, the licensee shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under this rule for the remainder of the period specified by law or in this rule, and shall notify the division in writing of the exact address where the books and records will be maintained during the required period.

(F) The division of financial institutions may suspend, revoke, or refuse to renew any license issued by the division or bring any other authorized administrative enforcement action against any person for failure to maintain records in accordance with section 1321.76 of the Revised Code or this rule.

Replaces: 1301:8-4-05, 1301:8-4-09

Effective: 08/01/2009
R.C. 119.032 review dates: 05/24/2014
Promulgated Under: 119.03
Statutory Authority: 1321.77
Rule Amplifies: 1321.76
Prior Effective Dates: 12/1/79, 7/10/1995, 6/3/2004

1301:8-4-04 Advertising.

(A) Any advertising for business subject to sections 1321.71 to 1321.84 of the Revised Code shall not be false, misleading, or deceptive.

(B) In connection with section 1321.76 of the Revised Code, every licensee shall maintain either at each licensed office or in a central location, approved by the division of financial institutions, a records file of all advertising, including newspaper, magazine, direct mailing, facsimile advertising and solicitations, roadside advertising, internet and scripts of radio and television commercials, for a period of two years from the date last disseminated. A record or other file shall be readily available for inspection by the division of financial institutions at all times. Every licensee shall notify the division of financial institutions in writing of the location of the record or file.

Replaces: 1301:8-4-06

Effective: 08/01/2009
R.C. 119.032 review dates: 05/24/2014
Promulgated Under: 119.03
Statutory Authority: 1321.77
Rule Amplifies: 1321.76
Prior Effective Dates: 7/10/1995, 6/3/2004

1301:8-4-05 Record keeping requirements. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-06 Advertising. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-07 Location of licensee's records. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-09 Receipts for dishonored check charges. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-11 Finance charge. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-12 Cancellation charge. [Rescinded].

Rescinded eff 8-1-09

1301:8-4-14 Interpretation. [Rescinded].

Rescinded eff 8-1-09