(a) The Director of Administrative Services shall be notified by the insurance carrier of the cancellation of any motor vehicle liability policy of insurance at least 10 days before the effective date of such cancellation.
(b) In the absence of such notice of cancellation, the policy of insurance shall remain in full force and effect, except that any policy subsequently procured and certified shall on the effective date of its certification terminate the insurance previously certified with respect to any vehicle designated in both certificates.
(c) Upon receipt of the notice of cancellation, the license and all of the registration certificates of the person whose insurance has been canceled shall be suspended by the Director of Administrative Services and shall remain so suspended until that person files a certificate of insurance.History: 1972, PL 12-65 § 1.
As adequate safeguards exist to inform the Director of Administrative Services of the natural “termination” of insurance policies by expiration of the policy period, the legislature did not intend the statute requiring an insurer to notify the Director at least ten days prior to “cancellation” of a policy to apply to “terminations.” A.S.C.A. § of a policy to apply to “terminations.” A.S.C.A. § 22.2013. Pu’u v. Lepule, 8 A.S.R.2d 68(1988).
“Cancellation” of an insurance policy generally refers to conclusion of a policy prior to the expiration of the policy period, while "termination” refers to expiration of the policy by lapse of the policy period. A.S.C.A. § 22.2013. Pu’u v. Lepule, 8 A.S.R. 2d 68 (1988).
Statute requiring insurance carrier to notify the director of administrative services of the “cancellation” of a policy did not require such notice when the policy expired because the term of coverage ran out and the policy was not renewed. A.S.C.A. § 22.2013/ Pu’u v. Leupule, 12 A.S.R.2d 59 (1989).
“Cancellation” as used in insurance law usually refers to termination of a policy prior to the expiration of the policy period, while “termination” refers to the expiration of a policy by lapse of the policy period. A.S.C.A. § 22.2013. Pu’u v. Leupule, 12 A.S.R.2d 59 (1989).