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COMMISSIONER OF INSURANCE
Unofficial Text (See Printed Volume). Current through date and Register shown on Title Page.

Chapter Ins 21
WORKERS COMPENSATION INSURANCE
Ins 21.01

Termination of workers compensation insurance policies.

Note: Chapter Ins 21 was created as an emergency rule effective October 1, 1986.

Ins 21.01 Termination of workers compensation insurance policies. (1) PURPOSE. In accordance with s. 631.36
(1) (c), Stats., this rule exempts workers compensation insurance,
as defined in s. Ins 6.75 (2) (k), from the requirements of s. 631.36,
Stats., and establishes specific requirements concerning termination of workers compensation insurance contracts.
(2) SCOPE. This section applies to all workers compensation
insurance policies issued in Wisconsin. Workers compensation
insurance policies may provide terms more favorable to policyholders than are required by this rule.
(3) EXEMPTION. Workers compensation insurance policies
are exempt from the requirements of s. 631.36, Stats.
(4) MIDTERM CANCELLATIONS. (a) Permissible grounds. Except as provided by par. (c), no workers compensation insurance
policy may be cancelled by the insurer prior to the expiration of
the agreed term except for failure to pay a premium due or on
grounds stated in the policy, which must be comprehended within
one of the following classes:
1. Material misrepresentation;
2. Substantial change in the risk assumed, except to the extent
that the insurer should reasonably have foreseen the change or
contemplated the risk in writing the contract; or
3. Substantial breaches of contractual duties, conditions or
warranties.
(b) Notice. No cancellation under par. (a) is effective until at
least 30 days after the 1st class mailing or delivery of a written
notice to the policyholder. The cancellation is effective whether
or not the notice has been given to the policyholder upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.
(c) New policies. Paragraphs (a) and (b) do not apply to any
workers compensation insurance policy that has not been previously renewed if the policy has been in effect less than 60 days
at the time the notice of cancellation is mailed or delivered. No
cancellation under this paragraph is effective until at least 30 days
after the 1st class mailing or delivery of a written notice to the policyholder. The cancellation is effective whether or not the notice
has been given to the policyholder upon the effective date of replacement insurance coverage obtained by the employer or of an
order exempting the employer from carrying insurance under s.
102.28 (2), Stats.
(5) ANNIVERSARY CANCELLATION. A workers compensation
policy may be issued for a term longer than one year or for an indefinite term with a clause providing for cancellation by the insurer in the manner provided in sub. (6) (a) for nonrenewals, except
the notice must be given at least 60 days prior to any anniversary
date and an insurer may not cancel a policy solely because of the
termination of an insurance marketing intermediarys contract
with the insurer unless the insurer complies with sub (7).
(6) NONRENEWAL. (a) Notice required. Subject to subs. (4)
and (5), a policyholder has a right to have the workers compensation policy renewed, on the terms then being applied by the insurer to similar risks, for an additional period of time equivalent to
the expiring term if the agreed term is one year or less, or for one

year if the term is longer than one year, unless at least 60 days prior
to the date of expiration provided in the policy a notice of intention not to renew the policy beyond the agreed expiration date is
mailed or delivered to the policyholder, or with respect to failure
timely to pay a renewal premium a notice is given, not more than
75 days nor less than 30 days prior to the due date of the premium,
which states clearly the effect of nonpayment of premium by the
due date.
(b) Prohibited nonrenewal. Notwithstanding par. (a), an insurer may not refuse to renew a workers compensation policy solely
because of the termination of an insurance marketing intermediarys contract with the insurer unless the insurer complies with
sub. (7).
(c) Exceptions. A nonrenewal of a workers compensation
policy is effective whether or not the notice has been given to the
policyholder upon the effective date of replacement insurance
coverage obtained by the employer or of an order exempting the
employer from carrying insurance under s. 102.28 (2), Stats.
(7) POLICY CANCELLATION. An insurer may refuse to renew or
may cancel a workers compensation policy under sub. (5) or (6)
solely because of the termination of an insurance marketing intermediarys contract with the insurer only if the notice of nonrenewal or cancellation contains an offer to continue or renew the policy
with the insurer if the insurer receives a written request from the
policyholder prior to the cancellation or renewal date. The insurer
shall continue or renew the policy if a timely request is received
unless the policyholder does not meet normal underwriting criteria. However, the cancellation or nonrenewal is effective whether
or not the notice contains an offer to continue or renew the policy
upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer
from carrying insurance under s. 102.28 (2), Stats.
(8) INFORMATION ABOUT GROUNDS. A notice of cancellation or
nonrenewal under sub. (4), (5) or (6) shall state with reasonable
precision the facts on which the insurers decision is based. No
such notice is effective unless it so states the facts. However, the
cancellation or nonrenewal is effective whether or not the notice
states with reasonable precision the facts [on] which the insurers
decision is based, upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting
the employer from carrying insurance under s. 102.28 (2), Stats.
(9) CANCELLATION OR NONRENEWAL NOTICE. Notice of cancellation or nonrenewal under sub. (4) (b) or (6) is not effective
unless the notice contains adequate instructions to the policyholder for obtaining insurance through the Wisconsin workers compensation insurance pool. This paragraph does not apply to workers compensation policies cancelled or nonrenewed on behalf of
the Wisconsin workers compensation insurance pool or if the
ground for cancellation or nonrenewal is nonpayment of premium
and the notice of cancellation or nonrenewal so states.
(10) CANCELLATION FOR NONPAYMENT OF PREMIUM. Subsections (8) and (9) do not apply if the ground for cancellation or nonrenewal is nonpayment of the premium and if the notice so states.
No termination of workers compensation insurance is effective
unless such termination complies with s. 102.31 (2), Stats., including the entity designated by the department of industry, labor
and human relations receiving proper notice at least 60 days prior

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Unofficial Text (See Printed Volume). Current through date and Register shown on Title Page.
to any nonrenewal under sub. (5) or (6) and at least 30 days prior
to any cancellation under sub. (4).
(11) INSURERS LIABILITY. There is no liability on the part of
and no cause of action of any nature arises against any insurer, its
authorized representatives, its agents, its employes, or any firm,
person or corporation furnishing to the insurer information relating to the reasons for cancellation or nonrenewal, for any statement made by them in complying or enabling the insurer to com-

Register, June, 1997, No. 498

ply with this section, or for the provision of information pertaining

thereto.
(12) RETURN PREMIUMS. If an insurer cancels a workers compensation policy, the insurer shall return to the insured the pro rata
unearned premium less any audit premiums which are due.
History: Cr. Register, January, 1987, No. 373, eff. 2187; cr. (4) (i), Register,
April, 1992, No. 436, eff. 5192; am. (4) (a) (intro.), renum. (4) (b), (c), (d), (f) to
(i) to be (4) (c), (5), (6) (c), (9) to (12) and am., cr. (4) (b), (6) (a) and (b), (7) and (8),
r. (4) (e), Register, August, 1995, No. 476, eff. 9195.