(1) An insurer that issues a guaranty contract or a surety bond to an employer under this chapter may terminate liability on its contract or bond, as the case may be, by giving the employer and the Director of the Department of Consumer and Business Services notice of termination in accordance with rules adopted by the director. A notice of termination shall state the effective date of termination.
(2) An insurer may terminate liability under this section as follows:
(a) If the termination of a guaranty contract is for reasons other than those set forth in paragraphs (b) and (c) of this subsection, it is effective at 12 midnight not less than 45 days after the date the notice is mailed to the employer.
(b) If the termination of a guaranty contract is based on the insurer’s decision not to offer insurance to employers within a specific premium category, it is effective not sooner than 90 days after the date the notice is mailed to the employer.
(c) If the termination of a guaranty contract is based on nonpayment of premium, the termination is effective not sooner than 10 days after the date the notice is mailed to the employer.
(d) The termination of a surety bond is effective at 12 midnight not less than 30 days after the date the notice is received by the director.
(3) Notice to the employer under this section shall be given by mail, addressed to the employer at the last-known address of the employer. If the employer is a partnership, notice may be given to any of the partners. If the employer is a limited liability company, notice may be given to any manager, or in a member managed limited liability company, to any of the members. If the employer is a corporation, notice may be given to any agent or officer of the corporation under whom legal process may be served.
(4) Termination shall in no way limit liability that was incurred under the guaranty contract or surety bond prior to the effective date of the termination.
(5) If, before the effective date of a termination under this section, the employer gives notice to the insurer that it has not obtained coverage from another insurer and intends to become insured under the assigned risk plan established under ORS 656.730, the insurer shall insure that continuing coverage is provided to the employer under the plan without further application by the employer, transferring the risk to the plan as of the effective date of termination. If the insurer is a servicing carrier under the plan, it shall continue to provide coverage for the employer as a servicing carrier, at least until another servicing carrier is provided for the employer in the normal course of administering the plan. If the insurer is not a servicing carrier, it shall apply to the plan for coverage on the employer’s behalf. Nothing in this section is intended to limit the authority of administrators of the plan to require the employer to provide deposits or to make payments consistent with plan requirements. However, the rules of the plan shall allow any deposit requirements imposed by the plan to be deferred for as long as one year. [1975 c.556 §32; 1981 c.854 §30; 1981 c.874 §5; 1981 c.876 §6; 1985 c.212 §8; 1990 c.1 §1; 1995 c.93 §36; 1995 c.332 §46a; 2003 c.170 §5; 2007 c.656 §1]
Note: The amendments to 656.427 by section 3, chapter 241, Oregon Laws 2007, and sections 2 and 3, chapter 656, Oregon Laws 2007, become operative July 1, 2009. See section 31, chapter 241, Oregon Laws 2007, and section 4, chapter 656, Oregon Laws 2007. The text that is operative on and after July 1, 2009, is set forth for the user’s convenience.
656.427. (1) An insurer that issues a workers’ compensation insurance policy or surety bond to an employer under this chapter may cancel the policy or surety bond prior to the expiration date of the policy or surety bond by giving the employer and the Director of the Department of Consumer and Business Services notice of cancellation in accordance with rules adopted by the director. Notice required under this section must be provided to the director within 10 calendar days after the effective date of the cancellation provided in the notice given to the employer.
(2) An insurer may cancel a workers’ compensation insurance policy or surety bond under this section as follows:
(a) If the cancellation of a workers’ compensation insurance policy is for reasons other than those set forth in paragraphs (b) and (c) of this subsection, it is effective at 12 midnight not less than 45 days after the date the notice is mailed to the employer.
(b) If the cancellation of a workers’ compensation insurance policy is based on the insurer’s decision not to offer insurance to employers within a specific premium category, it is effective not sooner than 90 days after the date the notice is mailed to the employer.
(c) If the cancellation of a workers’ compensation insurance policy is based on nonpayment of premium, the cancellation is effective not sooner than 10 days after the date the notice is mailed to the employer.
(d) The cancellation of a surety bond is effective at 12 midnight not less than 30 days after the date the notice is received by the director.
(3) An insurer may nonrenew a workers’ compensation insurance policy by providing notice in the manner provided for in subsection (2) of this section.
(4) Notice to the employer under this section shall be given by mail, addressed to the employer at the last-known address of the employer. If the employer is a partnership, notice may be given to any of the partners. If the employer is a limited liability company, notice may be given to any manager, or in a member managed limited liability company, to any of the members. If the employer is a corporation, notice may be given to any agent or officer of the corporation under whom legal process may be served.
(5) Cancellation of a workers’ compensation insurance policy or surety bond shall in no way limit liability that was incurred under the policy or surety bond prior to the effective date of the cancellation.
(6) If, before the effective date of a cancellation under this section, the employer gives notice to the insurer that it has not obtained coverage from another insurer and intends to become insured under the assigned risk plan established under ORS 656.730, the insurer shall ensure that continuing coverage is provided to the employer under the plan without further application by the employer, transferring the risk to the plan as of the effective date of cancellation. If the insurer is a servicing carrier under the plan, it shall continue to provide coverage for the employer as a servicing carrier, at least until another servicing carrier is provided for the employer in the normal course of administering the plan. If the insurer is not a servicing carrier, it shall apply to the plan for coverage on the employer’s behalf. Nothing in this section is intended to limit the authority of administrators of the plan to require the employer to provide deposits or to make payments consistent with plan requirements. However, the rules of the plan shall allow any deposit requirements imposed by the plan to be deferred for as long as one year.
(7) The cancellation of a workers’ compensation insurance policy under this section is effective on the earliest of:
(a) The expiration of the term of the policy;
(b) The effective date of a cancellation under subsection (2) of this section; or
(c) The effective date of a policy for which another insurer makes a proof of coverage filing on behalf of the employer.
Section: Previous 656.420 656.421 656.422 656.423 656.424 656.425 656.426 656.427 656.428 656.429 656.430 656.431 656.432 656.434 656.440 NextLast modified: August 7, 2008