Notification of cancellation, nonrenewal, or change in rates.

(1) Any insurer delivering or issuing an individual health insurance policy subject to this part shall give the policyholder at least 45 days’ advance written notice of cancellation, nonrenewal, or a change in rates. Such notice shall be mailed to the policyholder’s last address as shown by the records of the insurer. However, if cancellation is for nonpayment of premium, at least 10 days’ written notice accompanied by the reason therefor shall be given. Written notice of cancellation for nonpayment of premium shall not be required for health insurance policies under which premiums are payable monthly or more frequently and regularly collected by a licensed agent.

(2) In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.

(3) If the insurer fails to provide the 45 days’ notice required by this section, the coverage shall remain in effect at the existing premium until 45 days after the notice is given or until the effective date of replacement coverage obtained by the insured, whichever occurs first.