§ 58‑36‑105. Certain workers' compensation insurance policy cancellations prohibited.
(a) No policy ofworkers' compensation insurance or employers' liability insurance written inconnection with a policy of workers' compensation insurance shall be cancelledby the insurer before the expiration of the term or anniversary date stated inthe policy and without the prior written consent of the insured, except for anyone of the following reasons:
(1) Nonpayment ofpremium in accordance with the policy terms.
(2) An act or omissionby the insured or the insured's representative that constitutes materialmisrepresentation or nondisclosure of a material fact in obtaining the policy,continuing the policy, or presenting a claim under the policy.
(3) Increased hazard ormaterial change in the risk assumed that could not have been reasonablycontemplated by the parties at the time of assumption of the risk.
(4) Substantial breachof contractual duties, conditions, or warranties that materially affects theinsurability of the risk.
(5) A fraudulent actagainst the company by the insured or the insured's representative thatmaterially affects the insurability of the risk.
(6) Willful failure bythe insured or the insured's representative to institute reasonable loss controlmeasures that materially affect the insurability of the risk after writtennotice by the insurer.
(7) Loss of facultativereinsurance or loss of or substantial changes in applicable reinsurance asprovided in G.S. 58‑41‑30.
(8) Conviction of theinsured of a crime arising out of acts that materially affect the insurabilityof the risk.
(9) A determination bythe Commissioner that the continuation of the policy would place the insurer inviolation of the laws of this State.
(10) The named insuredfails to meet the requirements contained in the corporate charter, articles ofincorporation, or bylaws of the insurer, when the insurer is a companyorganized for the sole purpose of providing members of an organization withinsurance coverage in this State.
(b) Any cancellationpermitted by subsection (a) of this section is not effective unless writtennotice of cancellation has been given by registered or certified mail, returnreceipt requested, to the insured not less than 15 days before the proposedeffective date of cancellation. The notice shall be given by registered orcertified mail, return receipt requested, to the insured and any other persondesignated in the policy to receive notice of cancellation at their addressesshown in the policy or, if not indicated in the policy, at their last knownaddresses. The notice shall state the precise reason for cancellation. Whenevernotice of intention to cancel is required to be given by registered orcertified mail, no cancellation by the insurer shall be effective unless anduntil such method is employed and completed. Failure to send this notice, asprovided in this section, to any other person designated in the policy toreceive notice of cancellation invalidates the cancellation only as to thatother person's interest.
(c) This section doesnot apply to any policy that has been in effect for fewer than 60 days and isnot a renewal of a policy. That policy may be cancelled for any reason bygiving at least 30 days' prior written notice of and reasons for cancellationto the insured by registered or certified mail, return receipt requested.
(d) Cancellation fornonpayment of premium is not effective if the amount due is paid before theeffective date set forth in the notice of cancellation.
(e) Copies of the noticerequired by this section shall also be sent to the agent or broker of recordthough failure to send copies of the notice to those persons shall notinvalidate the cancellation. Mailing copies of the notice by regular first‑classmail to the agent or broker of record satisfies the requirements of thissubsection. (2001‑241,s. 2.)
§ 58‑36‑105. Certain workers' compensation insurance policy cancellations prohibited.
(a) No policy ofworkers' compensation insurance or employers' liability insurance written inconnection with a policy of workers' compensation insurance shall be cancelledby the insurer before the expiration of the term or anniversary date stated inthe policy and without the prior written consent of the insured, except for anyone of the following reasons:
(1) Nonpayment ofpremium in accordance with the policy terms.
(2) An act or omissionby the insured or the insured's representative that constitutes materialmisrepresentation or nondisclosure of a material fact in obtaining the policy,continuing the policy, or presenting a claim under the policy.
(3) Increased hazard ormaterial change in the risk assumed that could not have been reasonablycontemplated by the parties at the time of assumption of the risk.
(4) Substantial breachof contractual duties, conditions, or warranties that materially affects theinsurability of the risk.
(5) A fraudulent actagainst the company by the insured or the insured's representative thatmaterially affects the insurability of the risk.
(6) Willful failure bythe insured or the insured's representative to institute reasonable loss controlmeasures that materially affect the insurability of the risk after writtennotice by the insurer.
(7) Loss of facultativereinsurance or loss of or substantial changes in applicable reinsurance asprovided in G.S. 58‑41‑30.
(8) Conviction of theinsured of a crime arising out of acts that materially affect the insurabilityof the risk.
(9) A determination bythe Commissioner that the continuation of the policy would place the insurer inviolation of the laws of this State.
(10) The named insuredfails to meet the requirements contained in the corporate charter, articles ofincorporation, or bylaws of the insurer, when the insurer is a companyorganized for the sole purpose of providing members of an organization withinsurance coverage in this State.
(b) Any cancellationpermitted by subsection (a) of this section is not effective unless writtennotice of cancellation has been given by registered or certified mail, returnreceipt requested, to the insured not less than 15 days before the proposedeffective date of cancellation. The notice shall be given by registered orcertified mail, return receipt requested, to the insured and any other persondesignated in the policy to receive notice of cancellation at their addressesshown in the policy or, if not indicated in the policy, at their last knownaddresses. The notice shall state the precise reason for cancellation. Whenevernotice of intention to cancel is required to be given by registered orcertified mail, no cancellation by the insurer shall be effective unless anduntil such method is employed and completed. Failure to send this notice, asprovided in this section, to any other person designated in the policy toreceive notice of cancellation invalidates the cancellation only as to thatother person's interest.
(c) This section doesnot apply to any policy that has been in effect for fewer than 60 days and isnot a renewal of a policy. That policy may be cancelled for any reason bygiving at least 30 days' prior written notice of and reasons for cancellationto the insured by registered or certified mail, return receipt requested.
(d) Cancellation fornonpayment of premium is not effective if the amount due is paid before theeffective date set forth in the notice of cancellation.
(e) Copies of the noticerequired by this section shall also be sent to the agent or broker of recordthough failure to send copies of the notice to those persons shall notinvalidate the cancellation. Mailing copies of the notice by regular first‑classmail to the agent or broker of record satisfies the requirements of thissubsection. (2001‑241,s. 2.)
§ 58‑36‑105. Certain workers' compensation insurance policy cancellations prohibited.
(a) No policy ofworkers' compensation insurance or employers' liability insurance written inconnection with a policy of workers' compensation insurance shall be cancelledby the insurer before the expiration of the term or anniversary date stated inthe policy and without the prior written consent of the insured, except for anyone of the following reasons:
(1) Nonpayment ofpremium in accordance with the policy terms.
(2) An act or omissionby the insured or the insured's representative that constitutes materialmisrepresentation or nondisclosure of a material fact in obtaining the policy,continuing the policy, or presenting a claim under the policy.
(3) Increased hazard ormaterial change in the risk assumed that could not have been reasonablycontemplated by the parties at the time of assumption of the risk.
(4) Substantial breachof contractual duties, conditions, or warranties that materially affects theinsurability of the risk.
(5) A fraudulent actagainst the company by the insured or the insured's representative thatmaterially affects the insurability of the risk.
(6) Willful failure bythe insured or the insured's representative to institute reasonable loss controlmeasures that materially affect the insurability of the risk after writtennotice by the insurer.
(7) Loss of facultativereinsurance or loss of or substantial changes in applicable reinsurance asprovided in G.S. 58‑41‑30.
(8) Conviction of theinsured of a crime arising out of acts that materially affect the insurabilityof the risk.
(9) A determination bythe Commissioner that the continuation of the policy would place the insurer inviolation of the laws of this State.
(10) The named insuredfails to meet the requirements contained in the corporate charter, articles ofincorporation, or bylaws of the insurer, when the insurer is a companyorganized for the sole purpose of providing members of an organization withinsurance coverage in this State.
(b) Any cancellationpermitted by subsection (a) of this section is not effective unless writtennotice of cancellation has been given by registered or certified mail, returnreceipt requested, to the insured not less than 15 days before the proposedeffective date of cancellation. The notice shall be given by registered orcertified mail, return receipt requested, to the insured and any other persondesignated in the policy to receive notice of cancellation at their addressesshown in the policy or, if not indicated in the policy, at their last knownaddresses. The notice shall state the precise reason for cancellation. Whenevernotice of intention to cancel is required to be given by registered orcertified mail, no cancellation by the insurer shall be effective unless anduntil such method is employed and completed. Failure to send this notice, asprovided in this section, to any other person designated in the policy toreceive notice of cancellation invalidates the cancellation only as to thatother person's interest.
(c) This section doesnot apply to any policy that has been in effect for fewer than 60 days and isnot a renewal of a policy. That policy may be cancelled for any reason bygiving at least 30 days' prior written notice of and reasons for cancellationto the insured by registered or certified mail, return receipt requested.
(d) Cancellation fornonpayment of premium is not effective if the amount due is paid before theeffective date set forth in the notice of cancellation.
(e) Copies of the noticerequired by this section shall also be sent to the agent or broker of recordthough failure to send copies of the notice to those persons shall notinvalidate the cancellation. Mailing copies of the notice by regular first‑classmail to the agent or broker of record satisfies the requirements of thissubsection. (2001‑241,s. 2.)
