Montana Code 33-15-1103. Midterm cancellation
33-15-1103. Midterm cancellation. (1) An insurer may not cancel an insurance policy before either the expiration of the agreed term or 1 year from the effective date of the policy or renewal date, whichever is less, except:
Terms Used In Montana Code 33-15-1103
- Cancellation: means the decision by the insurer to terminate an insurance policy prior to the expiration of its term. See Montana Code 33-15-1102
- Contract: A legal written agreement that becomes binding when signed.
- Insurer: means an insurer authorized to transact property or casualty insurance in this state or an unauthorized insurer transacting surplus lines insurance in this state. See Montana Code 33-15-1102
- Premium: means the contractual consideration charged to an insured for insurance for a specified period of time, regardless of the timing of actual charges. See Montana Code 33-15-1102
- Renewal: means an agreement between an insurer and an insured to extend or continue an existing insurance policy for 90 days or more. See Montana Code 33-15-1102
- Statute: A law passed by a legislature.
(a)for reasons specifically allowed by statute;
(b)for failure to pay a premium when due; or
(c)on grounds stated in the policy which pertain to the following:
(i)material misrepresentation;
(ii)substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk when the contract was written;
(iii)substantial breaches of contractual duties, conditions, or warranties;
(iv)determination by the commissioner that continuation of the policy would place the insurer in violation of this code;
(v)financial impairment of the insurer; or
(vi)any other reason approved by the commissioner.
(2)Except as provided in 33-23-401, cancellation under subsection (1) is not effective until 10 days after a notice of cancellation is either delivered or mailed to the insured.
(3)Subsections (1) and (2) do not apply to a newly issued insurance policy if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. A cancellation under this subsection is not effective until 10 days after the notice is delivered or mailed to the insured.
(4)If a policy has been issued for a term longer than 1 year and if either the premium is prepaid or an agreed term is guaranteed for additional premium consideration, the insurer may not cancel the policy except:
(a)for reasons specifically allowed by statute;
(b)for failure to pay a premium when due; or
(c)on grounds stated in the policy which pertain to those grounds listed in subsection (1)(c).