Code of Massachusetts Regulations 955 CMR - INSURANCE PREMIUM FINANCE AGENCY
Here’s an overview of 955 CMR – Insurance Premium Finance Agency, with a focus on Title 2.00: The Financing of Insurance Premiums:
📘 955 CMR Structure
955 CMR 1.00: Regulates hearings by the Insurance Premium Finance Board under M.G.L. c. 175, § 162B
955 CMR 2.00: Governs the actual financing of insurance premiums (mass.gov)
🔍 955 CMR 2.00: The Financing of Insurance Premiums (effective Register 1543, March 14, 2025)
Here’s a breakdown of its key sections (2.01–2.10):
2.01: Authority and Repeal
Establishes the board’s authority under M.G.L. c. 175, § 162B.
2.02: Finance Charges
Max interest: 18% per year on the unpaid financed balance, using the actuarial method.
Plus a flat administrative fee: $16 at origination (waived on refinances/prepayments) (law.cornell.edu, mass.gov).
2.03: Precomputation
Allows precomputed interest on equal monthly installments, capped by the rate in § 2.02.
Time periods are standardized: 1 month = from one date to the same date next month; days = 1/30 month (mass.gov).
2.04: Extension Charges
If the first payment is deferred past one month, a daily extension fee (1/30th of a month’s interest) may be charged.
For earlier payments, a pro‑rata credit applies (mass.gov, regulations.justia.com).
2.05: Default Charges
Default after 10 days late allows up to 5% of the installment, once per default.
If for personal/family use, capped at $5 (mass.gov).
2.06: Cancellation Charge
Charge upon policy cancellation: greater of 2% of unpaid balance or $5 (for personal/family agreements, max $5).
One-time charge, deductible from unearned premiums (mass.gov).
2.07: Prepayment of Agreements
Uses the “sum‑of‑the‑digits” refund method to rebate unused precomputed interest when paid off early.
Prepayments are aligned to nearest installment dates (mass.gov).
2.08: Merit Rating Surcharges and Credits
Defines “cash price” for auto insurance, including adjustments for merit rating (mass.gov).
2.09: Account Books
Must provide the insured with an account/coupon book and, if applicable, attached credit insurance documentation before the first payment due date (mass.gov).
2.10: Effective Date
Applies to agreements covering policies effective on or after July 2, 1984 (mass.gov).
📚 Additional Resources
PDF of 955 CMR 2.00 on MA gov site (mass.gov)
Cornell’s Legal Information Institute provides the full text and section index (law.cornell.edu)
Justia offers a version current through Register 1543 (March 14, 2025) (regulations.justia.com)
✅ In Summary
Sets a clear 18% APR cap, administrative fees, and rules for default and cancellation charges.
Provides consumer protections via caps on fees, rebate methods for prepayment, and documentation requirements.
Remains effective and enforceable under Massachusetts law today.
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