(a) For the purpose of this section, "consumer insurance premium finance agreement" means an insurance premium finance agreement as defined in Section 27-40-1 wherein the insurance contracts which are the subject of the premium finance agreement are for personal, family, or household purposes or where the premiums for those agreements are two thousand dollars ($2,000) or less. For the purpose of this section, "commercial premium finance agreement" means any insurance premium finance agreement other than a consumer premium finance agreement.
(b) A premium finance company shall not charge, contract for, receive, or collect a service charge other than in accordance with the following provisions:
(1) The service charge is to be computed on the balance of the premium due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance for which the premiums are being advanced, to and including the date when the final installment of the premium finance agreement is payable.
(2) The service charge per consumer insurance premium finance agreement shall be a maximum of nine dollars ($9) per one hundred dollars ($100) per annum plus an additional charge, which shall not exceed $15.00 per premium finance agreement, which additional charge need not be refunded.
(3) The service charge for a commercial insurance premium finance agreement shall be as agreed to by the parties to the agreement.
(c) Notwithstanding the provisions of any premium finance agreement, any insured may prepay the obligation in full at any time. In such event he shall receive a credit or refund under the rule of 78ths or the sum of the digits principle as follows: The amount of the refund or credit shall be as great a proportion of the finance charge originally contracted for as the sum of the periodic time balances of the debt scheduled to follow the date of prepayment bears to the sum of all the periodic time balances of the debt, both sums to be determined according to the scheduled payment originally contracted for. No refund of less than $1.00 need be made. If such prepayment is made by the debtor other than on a scheduled payment date, the nearest scheduled payment date shall be used in such computation. If, in addition to the service charge, an additional charge was imposed, such additional charge need not be refunded, nor taken into consideration in computing the credit refund.