A. The group policyholder may pay the premium for an identity theft group insurance policy from monies contributed wholly by the group policyholder, wholly by the group members or jointly by the group policyholder and the group members.

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B. The following requirements apply to the cancellation, nonrenewal or conditional renewal of coverage under an identity theft group insurance policy:

1. The policy shall be issued or renewed for a one-year policy period unless the policy provides for a longer policy period.

2. Except as provided in paragraph 3 of this subsection, an insurer may cancel the policy or any certificate issued under the policy only if the cancellation is based on one or more of the following:

(a) The nonpayment of premium if the notice of cancellation informs the group policyholder of the amount due.

(b) The conviction of a criminal offense arising out of acts increasing the hazard insured against.

(c) The discovery of fraud or material misrepresentation in obtaining the policy or in the presentation of a claim under the policy.

(d) After the policy is issued or after the last renewal date, the discovery of an act or omission or a violation of any policy condition that substantially and materially increases the hazard insured against and that occurred subsequent to the inception of the current policy period.

(e) A material change in the nature or extent of the risk that occurred after the issuance or last annual renewal anniversary date of the policy that causes the risk of loss to be substantially and materially increased beyond what was contemplated at the time the policy was issued or last renewed.

(f) A determination by the director that continuation of the present premium volume of the insurer would jeopardize that insurer’s solvency or be hazardous to the interests of the policyholders of the insurer, its creditors or the public.

3. An individual group member’s coverage under this article terminates on termination of the member’s affiliation with the group policyholder that constitutes membership in the group.

4. An act or omission by a group member does not constitute the basis for cancellation of the group policy.

5. An insurer’s cancellation, nonrenewal or conditional renewal of a group policy or any certificate issued under the policy shall set forth the specific reasons for cancellation, nonrenewal or conditional renewal and does not become effective until at least forty-five days, or twenty days if based on nonpayment of premium, after the insurer sends written notice of the cancellation, nonrenewal or conditional renewal to the group policyholder and to affected certificate holders. If authorized by the insurer, the group policyholder may send the notice to the certificate holder on behalf of the insurer.

C. A group policyholder may cancel the group policy for any reason on thirty days’ written notice to the insurer and each affected group member. A group policyholder is not required to give notice to a group member if substantially similar coverage has been obtained from another insurer without a lapse of coverage.

D. If a group member sustains a loss pursuant to a stolen identity event that occurs before the effective date of the cancellation, nonrenewal or conditional renewal of a group policy or the cancellation, nonrenewal, conditional renewal or termination of a certificate, whether initiated by the insurer, group policyholder or group member, the loss remains covered as provided under the policy notwithstanding the cancellation, nonrenewal, conditional renewal or termination.