Bowman v. State Roofing Co., 365 S.C. 112

Summary

The South Carolina Supreme Court considered whether a workers’ compensation insurer’s policy cancellation, initiated by a premium finance company, was effective under S.C. Code § 38-39-90. The court held that the cancellation notices satisfied the statutory timing requirements but that the insurer’s failure to return unearned premiums invalidated the cancellation. The court affirmed the circuit court’s judgment as modified, with the chief justice dissenting on the effect of the premium-refund requirement.

Holdings

1. The capitulation agreement did not waive the employer's claim that the carrier's cancellation of the policy was invalid.
2. Under S.C. Code Ann. § 38-39-90, the ten-day notice period is calculated from the mailing of the notice of intent, and the premium service company may request cancellation five days after that period expires; the additional two-business-day provision applies only when a governmental agency, mortgagee, or other third party is entitled to notice.
3. A premium service company cancellation is ineffective unless the insurer returns the unearned premiums required by S.C. Code Ann. § 38-39-90(e).

Questions Presented

1. Whether the employer's capitulation agreement acknowledging noncompliance with workers' compensation insurance requirements waived or resolved its claim that the policy cancellation was invalid.
2. Whether the attempted cancellations complied with the notice requirements of S.C. Code Ann. § 38-39-90.
3. Whether the insurer's failure to return unearned premiums rendered the attempted cancellations ineffective.

Disposition

affirmed