It is enacted by the General Assembly as follows:

SECTION 1. Chapter 27-29 of the General Laws entitled "Unfair Competition and Practices" is hereby amended by adding thereto the following section:

{ADD 27-29-14. Payment of premium -- Cancellation. -- ADD} {ADD Notwithstanding the provisions of chapter 27-40, private passenger motor vehicle insurance policyholders on twelve (12) month policies shall have the option of paying any policy premiums in installment payments provided that the insurance may require a payment of fifteen percent (15%) of the annual premium at time of issuance with the balance to be paid in nine (9) subsequent equal monthly installments thereafter. The insurer may levy a service charge of up to three dollars ($3.00) per installment against those policyholders who choose this option. ADD}

SECTION 2. This act shall take effect January 1, 1995.