2015 Oregon Revised Statutes
Volume : 14 - Trade Practices, Labor and Employment
Chapter 656 - Workers’ Compensation
Section 656.427 - Termination of workers’ compensation insurance contract or surety bond liability by insurer.

(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.

[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.241 §3; 2007 c.656 §§1,2,3]