Policy cancelled or avoided
312If the policy is cancelled or avoided by the insurer, the liability of the insured on his premium note ceases from the date of such cancellation or avoidance on account of any loss that occurs thereafter, but the insured shall nevertheless be liable to pay his proportion of the losses and expenses of the insurer to the time of cancelling or avoiding the policy and, on payment of his proportion of all assessments then payable and to become payable in respect of losses and expenses sustained up to that time, shall be entitled to a return of his premium note, and a condition to this effect shall be endorsed on the policy.