(a)    The finance charge shall be computed:

(1)    on the amount of the entire premium loan advanced, including any taxes or fees that are financed under § 23–301.1 of this subtitle, after subtracting any down payment on the premium loan made by the insured;

(2)    from the inception date of the insurance contract or from the due date of the premium, disregarding any grace period or credit allowed for payment of the premium, through the date when the final installment under the premium finance agreement is payable; and

(3)    in an amount not exceeding the sum of 1.15% for each 30 days of the loan, computed in advance.

(b)    (1)    An insured shall receive a refund of a finance charge that exceeds any amount due under the premium finance agreement if:

(i)    the insurance contract is canceled; or

(ii)    the insured prepays the loan in full at any time.

(2)    The amount of the refund under paragraph (1) of this subsection may be calculated by the actuarial method.

(3)    (i)    A finance charge:

1.    is earned in 30–day increments; and

2.    in accordance with subparagraph (ii) of this paragraph, may be earned on the first day of each 30–day period.

(ii)    If a finance charge is earned on the first day of each 30–day period, the premium finance agreement shall contain a notification that the finance charge is earned on the first day of each 30–day period.

(4)    A premium finance company may not retain more of the finance charge than is earned under this section.

(c)    With respect to commercial automobile, fire, or liability insurance only, a finance charge may be imposed on any unpaid principal balance of the loan remaining after all unearned premiums have been returned if the unearned premiums are less than the unpaid principal balance due to:

(1)    an audit by the insurer resulting in additional premium;

(2)    the application of a minimum premium on a policy;

(3)    an endorsement that is made after a policy is issued and results in additional premium; or

(4)    a lawful delay in canceling an insurance policy that is beyond the control of the premium finance company.

(d)    Notwithstanding any other provision of law, a premium finance company may not use the Rule of 78s in computing a finance charge under this section.