20-1673. Grounds for valid
cancellation


A. No insurer may cancel an insurance policy before the expiration of the agreed
term or one year from the effective date of the policy or renewal, whichever is less, if
one of the following is true:


1. The policy has been in effect for sixty days.


2. The policy is a renewal, effective immediately.


B. Notwithstanding subsection A, an insurer may cancel a policy for either of the
following:


1. Nonpayment of a premium.


2. One of the following grounds, which must be stated in the policy:


(a) Conviction of the named insured of a crime arising out of acts increasing the
hazard insured against.


(b) Acts or omissions by the insured or his representative constituting fraud or
material misrepresentation in obtaining the policy, in continuing the policy or in
presenting a claim under the policy.


(c) A substantial change in the risk assumed, except to the extent that the insurer
should reasonably have foreseen the change or contemplated the risk in writing the
contract.


(d) A substantial breach of contractual duties or conditions.


(e) Loss of reinsurance applicable to the risk insured against, but only if the
absence of reinsurance has resulted from termination of treaty or facultative reinsurance
initiated or implemented by the reinsurer or reinsurers of the company issuing the
policy.


(f) A determination by the director of insurance that the continuation of the
policy would place the insurer in violation of the insurance laws of this state or would
jeopardize the solvency of the insurer.


(g) Acts or omissions by the insured or his representative which materially
increase the hazard insured against.