§885. Cancellation by the insured; surrender

A. Cancellation by the insured of any policy which by its terms may be cancelled at the insured's option or of any binder based on such policy may be effected by written notice thereof to the insurer and surrender of the policy or binder for cancellation prior to or on the effective date of such cancellation. In the event the policy or binder has been lost or destroyed and cannot be surrendered, the insurer may in lieu of such surrender accept and in good faith rely upon the insured's written statement setting forth the fact of such loss or destruction.

B. Within thirty days following such cancellation the insurer shall pay to the insured or to the person entitled thereto as shown by the insurer's records, any unearned portion of any premium paid on the policy as computed on the customary pro rata rate, unless otherwise stated in a policy that has been filed with and approved by the commissioner, and any unearned commission. If a mortgagee provided written notice to the insurer of the percentage of the premium being funded with the mortgagee's own funds, the percentage of the unearned premium attributable to the mortgagee shall be returned to the mortgagee and the percentage of the unearned premium attributable to the insured shall be returned to the insured. If no premium has been paid on the policy, the insured shall be liable to the insurer for premium for the period during which the policy was in force. Except for surplus line insurers, any assessment of a monetary penalty by an insurer against an insured as a result of the insured's cancellation prior to the expiration of any policy is prohibited. Nothing in this Section shall prohibit an insurer from calculating unearned premium based on a short-rate provision contained in any insurance policy that has been filed with and approved by the commissioner.

C. The surrender of a policy to the insurer for any cause by any person named therein as having an interest insured under the policy shall create a presumption that such surrender is agreed to by all persons so named.

D. This Section shall not apply to life insurance policies, annuity contracts, policies defined in R.S. 22:47(16)(b), or contracts provided for in Subpart C of Part IV of this Chapter.

E. With respect to the cancellation of liability automobile insurance, the office of motor vehicles shall not assess the fees set forth by R.S. 32:863(A)(3)(a) when the insured surrenders the license plate of the uninsured vehicle to the office of motor vehicles within ten calendar days from the date of notice prescribed by R.S. 32:863.2(E).

Acts 1958, No. 125; Acts 1991, No. 739, §1; Acts 1991, No. 790, §1; Acts 1997, No. 1428, §1; Redesignated from R.S. 22:637 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 169, §1; Acts 2010, No. 375, §1, eff. Jan. 1, 2011; Acts 2011, No. 21, §1; Acts 2011, No. 135, §1; Acts 2011, No. 370, §1; Acts 2017, No. 299, §1.