74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
House Bill 2783
Sponsored by Representative SHIELDS; Representatives BONAMICI,
BRUUN, BUCKLEY, CAMERON, CLEM, C EDWARDS, D EDWARDS, ESQUIVEL,
GALIZIO, GARRARD, HOLVEY, KOMP, READ, RILEY, ROBLAN, SCHAUFLER
CHAPTER ................
AN ACT
Relating to termination of workers' compensation coverage;
creating new provisions; and amending ORS 656.427.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 656.427 is amended to read:
656.427. (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 { - paragraph (b) - }
{ + paragraphs (b) and (c) + } of this subsection, it is
effective at 12 midnight not less than { - 30 - } { + 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. + }
{ - (c) - } { + (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.
Enrolled House Bill 2783 (HB 2783-B) Page 1
(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.
SECTION 2. If Senate Bill 559 becomes law, ORS 656.427, as
amended by section 1 of this 2007 Act, is amended to read:
656.427. (1) An insurer that issues { - a guaranty contract
or a surety bond - } { + a workers' compensation insurance
policy or surety bond + } to an employer under this chapter may
{ - terminate liability on its contract or bond, as the case may
be, - } { + 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 { - termination - }
{ + cancellation + } in accordance with rules adopted by the
director. { - A notice of termination shall state the effective
date of termination. - } { + 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 { - terminate liability - } { + cancel a
workers' compensation insurance policy or surety bond + } under
this section as follows:
(a) If the { - termination of a guaranty contract - }
{ + 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 { - termination of a guaranty contract - }
{ + 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 { - termination of a guaranty contract - }
{ + cancellation of a workers' compensation insurance policy + }
is based on nonpayment of premium, the { - termination - }
{ + cancellation + } is effective not sooner than 10 days after
the date the notice is mailed to the employer.
(d) The { - termination - } { + 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.
Enrolled House Bill 2783 (HB 2783-B) Page 2
{ + (3) An insurer may nonrenew a workers' compensation
insurance policy by providing notice in the manner provided for
in subsection (2) of this section. + }
{ - (3) - } { + (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.
{ - (4) - } { + (5) + } { - Termination - }
{ + Cancellation of a workers' compensation insurance policy or
surety bond + } shall in no way limit liability that was incurred
under the { - guaranty contract or surety bond - } { + policy
or surety bond + } prior to the effective date of the
{ - termination - } { + cancellation + }.
{ - (5) - } { + (6) + } If, before the effective date of a
{ - termination - } { + 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 { - insure - } { + 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 { - termination - }
{ + 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 3. If Senate Bill 559 becomes law, ORS 656.427, as
amended by section 3, chapter 241, Oregon Laws 2007 (Enrolled
Senate Bill 559), is amended to read:
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:
Enrolled House Bill 2783 (HB 2783-B) Page 3
(a) If the cancellation { + of a workers' compensation
insurance policy + } is for reasons other than those set forth in
{ - paragraph (b) - } { + paragraphs (b) and (c) + } of this
subsection, it is effective at 12 midnight not less than
{ - 30 - } { + 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. + }
{ - (c) - } { + (d) + } The { - termination - } { +
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
Enrolled House Bill 2783 (HB 2783-B) Page 4
(c) The effective date of a policy for which another insurer
makes a proof of coverage filing on behalf of the employer.
SECTION 4. { + If Senate Bill 559 becomes law, the amendments
to ORS 656.427 by sections 2 and 3 of this 2007 Act become
operative on July 1, 2009. + }
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Passed by House May 9, 2007
Repassed by House June 8, 2007
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 6, 2007
...........................................................
President of Senate
Enrolled House Bill 2783 (HB 2783-B) Page 5
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled House Bill 2783 (HB 2783-B) Page 6