§ 2232.38. Cancellation.

OPTIONAL UNIFORM PROVISIONS

The insurer may cancel this policy at any time by written notice delivered to the employer, or mailed to his last address as shown on the records of the insurer, stating when, not less than 31 days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the employer may cancel this policy at any time by written notice delivered or mailed to the insurer, effective on receipt or on such later date as may be specified in the notice. In the event of such cancellation by either the insurer or the employer, the insurer shall promptly return on a prorata basis the unearned premium paid, if any, and the employer shall promptly pay on prorata basis the earned premium which has not been paid. (In computing the prorata premium to be returned by the insurer or to be paid by the insurer or to be paid by the employer, any discounts in premium or premium rate actually allowed to the employer because of the longer periods for which premiums, at the time of the cancellation, had been paid or agreed to be paid shall be disregarded, and the prorata return or payment of premium will be computed upon the basis of the insurer's regular and customary premium or premium rate for the coverage of this policy.) Such cancellation shall be without prejudice to any claim originating prior to the effective date of such cancellation.

Instructions

1. The insurer may, at its option, omit the phrase “after the policy has been continued beyond its original term” after the “and” following the first semicolon.

2. Any provision of the policy by which the insurer is given the right to terminate coverage or increase premiums affects rights under the policy substantially similar to cancellation, and any such provision which results in the insurer having the right to terminate coverage or increase premium on less than 31 days written notice delivered or mailed to the employer at his last address as it appears on the records of the insurer is less favorable than this uniform provision and is a violation of Section 2232.6 of this article. However, termination of the entire policy or increase of premium negotiated by the mutual agreement, express or implied, of the parties terminates the entire contract including the “Cancellation” uniform provision, or modifies a provision of the policy without reference to cancellation or threat thereof. Such results may in fact be so accomplished notwithstanding the provisions of the policy relating to cancellation by the unilateral acts of the insurer or the employer. A policy provision relating to termination at a premium due date by mutual consent, irrespective of notice, or whereby the insurer gives advance consent to such a termination by the employer is not inconsistent with this uniform provision. (Ins. C. 10369.9.)

3. The insurer may, at its option, include or omit the next to the last sentence enclosed in parentheses.