An Act
ENROLLED SENATE
BILL NO. 1627 By: Seifried of the Senate
and
Cantrell of the House
An Act relating to insurance; amending 36 O.S. 2021,
Section 3639, which relates to cancellation
requirements; providing for electronic delivery;
updating statutory language; amending 85A O.S. 2021,
Section 42, which relates to cancellation
requirements; conforming language; updating statutory
references; and providing an effective date .
SUBJECT: Electronic delivery
BE IT ENACTED BY THE PEOPLE OF THE STATE O F OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 3639, is
amended to read as follows:
Section 3639. A. The provisions of this section apply to
commercial marine policies, commercial automobile policies,
commercial property insurance policies, commercial casualty
insurance policies, and commercial fire insurance policies.
B. As used in this section:
1. “Renewal” or “to renew” means the issuance or offer of
issuance by an insurer of a policy succeeding a policy previou sly
issued and delivered by the same insurer or an insurer within the
same group of insurers, or the issuance of a certificate or notice
extending the term of an existing policy for a specified period
beyond its expiration date;
ENR. S. B. NO. 1627 Page 2
2. “Nonpayment of premium ” means the failure or inability of
the named insured to discharge any obligation in connection with the
payment of premiums on a policy of insurance subject to this
section, whether such payments are payable directly to the insurer
or its agent or indirec tly payable under a premium finance plan or
extension of credit;
3. “Cancellation” means termination of a policy at a date other
than its expiration date;
4. “Expiration date” means the date upon which coverage under a
policy ends. It also means, for a policy written for a term longer
than one (1) year or with no fixed expiration date, each annual
anniversary date of such policy; and
5. “Nonrenewal” or “refusal to renew” means termination of a
policy at its expiration date.
C. After coverage has be en in effect for more than forty -five
(45) business days or after the effective date of the renewal of a
commercial marine, commercial automobile, commercial property,
commercial casualty or commercial fire insurance policy, a notice of
cancellation shall not be issued by any licensed insurer or surplus
or excess lines insurer unless it is based on at least one of the
following reasons with at least ten (10) days days’ notice to the
insured:
1. Nonpayment of premium;
2. Discovery of fraud or material mi srepresentation in the
procurement of the insurance or with respect to any claims submitted
thereunder;
3. Discovery of willful or reckless acts or omissions on the
part of the named insured which increase any hazard insured against;
4. The occurrence of a change in the risk which substantially
increases any hazard insured against after insurance coverage has
been issued or renewed;
ENR. S. B. NO. 1627 Page 3
5. A violation of any local fire, health, safety, building, or
construction regulation or ordinance with respect to any insured
property or the occupancy thereof which substantially increases any
hazard insured against;
6. A determination by the Commissioner that the continuation of
the policy would place the insurer in violation of the insurance
laws of this state;
7. Conviction of the named insured of a crime having as one of
its necessary elements an act increasing any hazard insured against;
or
8. Loss of or substantial changes in applicable reinsurance.
D. An insurer may refuse to renew a policy if the insurer g ives
to the first-named insured at the address shown on the policy
written notice that the insurer will not renew the policy. Such
notice shall be given at least forty -five (45) days before the
expiration date. Notice may be sent by electronic means if t he
recipient consents to such method of delivery and the insurer is in
compliance with the provisions of the Uniform Electronic
Transactions Act. Electronic delivery is considered to be
equivalent to any delivery method required by law, including first-
class mail, postage prepaid, certified mail, certificate of mail, or
certificate of mailing. If notice is given by mail or sent by
electronic means, said such notice shall be deemed to have been
given on the day said the notice is mailed or sent electronically.
If the notice is mailed or sent electronically less than forty-five
(45) days before expiration, coverage shall remain in effect until
forty-five (45) days after notice is mailed or sent electronically .
Earned premium for any period of coverage that extends beyond the
expiration date shall be considered pro rata based upon the previous
year’s rate. For purposes of this section, the transfer of a
policyholder between companies within the same insurance group is
not a refusal to renew. In addition, c hanging deductibles, changes
in premium, changes in the amount of insurance, or reductions in
policy limits or coverage are not refusals to renew.
Notice of nonrenewal shall not be required if the insurer or a
company within the same insurance group has o ffered to issue a
ENR. S. B. NO. 1627 Page 4
renewal policy, or, if the named insured has obtained replacement
coverage or has agreed in writing to obtain replacement coverage.
If an insurer provides the notice required by this subsection
and thereafter the insurer extends the poli cy for ninety (90) days
or less, an additional notice of nonrenewal is not required with
respect to the extension.
E. An insurer shall give to the named insured at the mailing
address shown on the policy, written notice of premium increase,
change in deductible, reduction in limits or coverage at least
forty-five (45) days prior to the expiration date of the policy. If
the insurer fails to provide such notice, the premium, deductible,
limits and coverage provided to the named insured prior to the
change shall remain in effect until notice is given or until the
effective date of replacement coverage obtained by the named
insured, whichever first occurs. If notice is given by mail, said
such notice shall be deemed to have been given on the day said the
notice is mailed. If the insured elects not to renew, any earned
premium for the period of extension of the terminated policy shall
be calculated pro rata at the lower of the current or previous
year’s rate. If the insured accepts the renewal, the premium
increase, if any, and other changes shall be effective the day
following the prior policy ’s expiration or anniversary date.
This subsection shall not apply to:
1. Changes in a rate or plan filed with or approved by the
Insurance Commissioner or filed pur suant to the Property and
Casualty Competitive Loss Cost Rating Act and applicable to an
entire class of business; or
2. Changes based upon the altered nature of extent of the risk
insured; or
3. Changes in policy forms filed with or approved by the
Insurance Commissioner and applicable to an entire class of
business.
F. Proof of mailing of notice of cancellation, or of nonrenewal
or of premium or coverage changes, to the named insured at the
address shown in the policy, shall be sufficient proof of n otice.
ENR. S. B. NO. 1627 Page 5
SECTION 2. AMENDATORY 85A O.S. 2021, Section 42, is
amended to read as follows:
Section 42. A. Contents. Every policy or contract of
insurance issued by a carrier to an employer to secure the payment
of compensation under this act the Administrative Workers’
Compensation Act shall contain:
1. a. Provisions that identify the insured employer and
either identify each covered employee or describe
covered employees by class or type of labor performed
and the estimated numb er of employees of each such
class or type.
b. No single policy of workers ’ compensation insurance
may be issued to any group of employers who are
unaffiliated with one another in terms of ownership,
control, or right to participate in the profits of the
affiliated enterprises;
2. Provisions that insolvency or bankruptcy of the employer or
discharge therein shall not relieve the carrier from payment of
compensation for compensable injuries sustained by an employee
during the term of the policy or contrac t;
3. a. The agreement of the carrier that it shall promptly
pay to the person entitled to compensation every
installment of compensation that may be awarded or
agreed on and that this obligation shall not be
affected by any default of the employer or by any
default in the giving of any notice required by the
policy or otherwise.
b. The agreement shall be construed to be a direct
obligation by the carrier to the person entitled to
compensation, enforceable in that person ’s name; and
4. Such other provis ions as the Insurance Department allows or
requires carriers to include in workers ’ compensation policies.
B. Cancellation.
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1. An employer may cancel coverage with a carrier by giving the
carrier at least thirty (30) days ’ notice, unless a shorter peri od
is permitted under subparagraph b of this paragraph.
a. Cancellation of coverage is effective at 12:01 a.m.
thirty (30) days after the date the cancellation
notice is received by the carrier, unless a later date
is specified in the notice to the carrie r.
b. (1) An employer may cancel coverage effective less
than thirty (30) days after written notice is
received by the carrier where the employer
obtains other coverage or becomes a self -insurer.
Notice may be sent by electronic means if the
recipient consents to such method of delivery and
the insurer is in compliance with the provisions
of the Uniform Electronic Transaction s Act.
Electronic delivery is considered to be
equivalent to any delivery method required by
law, including first-class mail, postage prepaid,
certified mail, certificate of mail, or
certificate of mailing.
(2) A cancellation under this subsection is effective
immediately on the effective date of the other
coverage or on authorization as a self -insurer.
2. a. A notice of cancellatio n from the carrier shall state
the hour and date that cancellation is effective.
b. A carrier shall not cancel coverage issued to an
employer under this act the Administrative Workers’
Compensation Act before the date specified for
expiration in the polic y or contract or until at least
thirty (30) days have elapsed after a notice of
cancellation has been mailed or sent electronically to
the Commission and to the employer, or until ten (10)
days have elapsed after the notice has been mailed or
sent electronically to the employer and to the
Commission if the cancellation is for nonpayment of
premium.
ENR. S. B. NO. 1627 Page 7
c. If the employer procures other insurance within the
notice period, the effective date of the new policy
shall be the cancellation date of the old policy.
3. Cancellation of coverage by an employer or a carrier shall
in no way limit liability that was incurred under the policy or
contract before the effective date of cancellation.
C. Coverage.
1. No policy or contract of insurance shall be issued against
liability under this act the Administrative Workers’ Compensation
Act unless the policy or contract covers the entire liability of the
employer. Split coverage whereby some employees of an employer are
insured by one carrier and other employees are insure d by another
carrier, or a plan of self -insurance, is expressly prohibited except
for a policy issued covering the liability of an employer or of
multiple employers as to specific jobs, ventures, contracts, or
undertakings, but only if the policy meets wit h the reasonable
satisfaction and approval of the Insurance Commissioner that the
policy is in the best interest of the employers and the employees
concerned and does not unduly or improperly affect the continuity of
workers’ compensation coverage by serio usly and negatively affecting
other carriers and agents with outstanding policies issued to any of
the employers in issue.
2. The terms of the policy or contract shall govern any
questions of liability between the employer and the carrier.
D. Under such rules as may be adopted by the Insurance
Commissioner, and notwithstanding other provisions of this act the
Administrative Workers’ Compensation Act , he or she may certify five
or more employers as an insurance group which shall be considered an
employer for the purposes of this act the Administrative Workers’
Compensation Act.
SECTION 3. This act shall become effective November 1, 2024.
ENR. S. B. NO. 1627 Page 8
Passed the Senate the 29th day of February, 2024.
Presiding Officer of the Senate
Passed the House of Representatives the 17th day of April, 2024.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _______ __
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of _________________ _, 20 _______, at _______ o'clock _______ M.
By: _________________________________