§ 20-1493 — Group excess liability insurance policy; premiums; cancellation; requirements

A. The group policyholder may pay the premium for a group excess liability insurance policy from monies contributed wholly by the group policyholder, wholly by the certificate holders or jointly by the group policyholder and the certificate holders.

B. The group excess liability insurance policy shall provide separate limits of coverage for each certificate holder.

C. The insurer or, if authorized by the insurer and agreed to by the insurance producer, the group policyholder's insurance producer shall deliver a copy of the group policy and any endorsement or amendment to the group policyholder. If authorized by the insurer and agreed to by the group policyholder or the group policyholder's insurance producer, the group policyholder or the group policyholder's insurance producer may send the certificate of insurance and any endorsement or amendment to the certificate holders on behalf of the insurer.

D. The certificate of insurance shall contain all material terms and conditions of coverage that are afforded to the certificate holder, including a disclosure in clear and easily understandable language of any limitation, exclusion or required underlying coverage, or a copy of the group policy shall be delivered to the certificate holder within a reasonable period of time after the certificate of insurance is delivered to the certificate holder.

E. The insurer may not disclose claims-related information about any certificate holder to the group policyholder other than the existence of a claim.

F. The following requirements apply to the cancellation, nonrenewal or conditional renewal of coverage under a group excess liability insurance policy:

1. Except as provided in paragraph 5 of this subsection, an insurer may nonrenew the group policy or any certificate of insurance issued under the policy if the insurer complies with the requirements of this article. The insurer shall send notice of nonrenewal to the group policyholder and the certificate holders at least thirty days before the effective date of the nonrenewal. If authorized by the insurer and agreed to by the group policyholder, the group policyholder may send notice of nonrenewal to the certificate holders at least thirty days before the effective date of the nonrenewal on behalf of the insurer.

2. Except as provided in paragraph 5 of this subsection, after a group policy or certificate of insurance has been in effect for sixty days, or if the group policy or certificate of insurance is a renewal, effective immediately, an insurer may cancel the group policy or any certificate of insurance issued under the policy after the effective date of the group policy or certificate of insurance based on any of the following:

(a) The nonpayment of the premium.

(b) The conviction of the group policyholder or certificate holder of a crime that arose out of acts that increased any of the hazards insured against.

(c) Any acts or omissions by the group policyholder, the group policyholder's representative or the certificate holder that constitute fraud or material misrepresentation in obtaining or continuing the group policy or certificate of insurance or in presenting a claim under the group policy or certificate of insurance.

(d) A substantial change in the risk assumed by the insurer since the group policy or certificate of insurance was issued, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract.

(e) A determination by the director that continuing the group policy or certificate of insurance would place the insurer in violation of the insurance laws of this state or would jeopardize the solvency of the insurer.

(f) The loss of reinsurance that applies to the risk insured against, but only if the absence of reinsurance resulted from the termination of treaty reinsurance or facultative reinsurance initiated or implemented by the reinsurer or reinsurers of the insurer issuing the group policy.

(g) The discovery of grossly negligent acts by the group policyholder, the group policyholder's representative or the certificate holder that materially increased any of the hazards insured against.

3. The insurer shall send notice of cancellation to the group policyholder and the certificate holders if the group policy is being canceled or to affected certificate holders if one or more certificates of insurance are being canceled at least thirty days before the effective date of the cancellation. If authorized by the insurer and agreed to by the group policyholder, the group policyholder may send notice of cancellation to the certificate holders if the group policy is being canceled or to affected certificate holders if one or more certificates of insurance are being canceled at least thirty days before the effective date of the cancellation on behalf of the insurer.

4. The group policy shall set forth the conditions and timing on which a certificate holder's coverage will terminate following the termination of a certificate holder's employment with the group policyholder.

5. An act or omission by a certificate holder may not constitute the basis for cancellation of the group policy.

6. The notice of cancellation and any refund of unearned premium may be sent separately, but both must be sent within thirty days before the effective date of the cancellation.

G. With thirty days' written notice to the insurer and each certificate holder, a group policyholder may cancel or nonrenew the group policy for any reason.

H. If a certificate holder sustains a loss that would be covered by the group policy and that occurs before the effective date of the cancellation, nonrenewal or conditional renewal of the group policy or the certificate holder's certificate of insurance, whether initiated by the insurer, group policyholder or certificate holder, the loss remains covered as provided under the group policy notwithstanding the cancellation, nonrenewal or conditional renewal.