Wyoming Property Study Guide

Wyoming’s property law is short on residual-market machinery and long on termination procedure. It has no FAIR plan, no numeric declination count for surplus lines, and a cancellation notice period longer than the one most national material teaches. Learn the four grounds, the three numbers and the two negatives and this part of the exam is largely done.

Mid-term cancellation: four grounds, two clocks, one window

W.S. 26-35-202 permits mid-term cancellation of a property or casualty policy on exactly four grounds:

1. Failure to pay a premium when due;
2. “Material misrepresentation of fact which if known to the company would have caused the company not to issue the policy”;
3. “Substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change”;
4. “Substantial breaches of contractual duties, conditions or warranties.”

The notice is 10 days for nonpayment and 45 days for any other ground. That 45 is the number to carry — most states use 10 or 30 for non-payment grounds, and Wyoming is meaningfully longer.

And none of it applies inside the first 60 days. The statute exempts “any insurance policy which has been in effect for less than sixty (60) days and is not a renewal of a previously existing policy for a term longer than sixty (60) days.” Inside that window the insurer is not confined to the four grounds.

Nonrenewal — 45 days, and a 90 that belongs to one line

W.S. 26-35-203 requires written notice not less than 45 days before expiration or the anniversary date — “except, if the policy is a professional health care malpractice liability policy not less than ninety (90) days.”

Read the exception narrowly. The 90 days attaches only to professional health care malpractice liability policies. It is not a general Wyoming figure, and stating it as one is a common error.

The notice “shall state the precise reason for nonrenewal,” must follow the notice procedures in W.S. 26-35-101, and — the sanction that gives the section force — “any nonrenewal attempted which is not in compliance with this section is ineffective.” Insurers are protected from liability for reasons stated in good faith.

Note the scope. W.S. 26-35-201 applies this article to “all property and casualty insurance as defined in W.S. 26-5-104 and 26-5-106, except… binders and other temporary contracts.” It is not a personal-lines-only article.

There is no property FAIR plan

Wyoming’s residual-market authority sits in a chapter whose name gives nothing away — W.S. 26-14-112, “Joint underwriting; pool and residual market activities,” inside the Rates and Rating Organizations chapter. And it is enabling framework only:

• insurers participating in joint underwriting, pools or residual market mechanisms may act in cooperation on rates, forms, surveys, inspections, statistics and research, and such mechanisms “shall not be deemed rate advisory organizations”;
• every pool must file its constitution, articles, agreement, bylaws and rules, and name a Wyoming resident agent for service;
• any residual market mechanism, plan or implementing agreement must be submitted in writing to the commissioner for approval;
• the commissioner may review operations and order discontinuance of anything unfair, unreasonable, anti-competitive or inconsistent.

It names no plan and creates none. There is no Wyoming FAIR plan and no property placement facility; hard-to-place property risk goes to the surplus lines market.

An automobile residual market does exist — the Commissioner’s rule §14-6 requires an insurer cancelling or nonrenewing an auto liability policy to notify the policyholder of possible eligibility through “the automobile assigned risk plan or Wyoming automobile insurance plan” — the rule names both, disjunctively. Property has no counterpart.

Surplus lines — and the number Wyoming does not set

Wyoming puts the diligent-effort requirement in the code, at W.S. 26-11-104. The condition for export is that the full amount of insurance required is “not procurable, after diligent effort has been made by the insurance producer to do so, from among the admitted insurers authorized to transact and actually writing that kind and type of insurance in this state.”

Two things to notice. The search runs among carriers actually writing that kind and type — not every admitted carrier on a list. And the broker must verify that “a properly conducted diligent effort search was performed and documented as prescribed by the commissioner.”

Wyoming sets no number of declinations. The statute states a process-and-documentation standard, not a count. The “three declinations” rule that appears throughout national study material is not Wyoming law, and supplying it is a fabrication rather than a simplification.

The rest of the regime, in numbers: the export list mechanism at W.S. 26-11-106, where the commissioner may by order after notice and a hearing declare a coverage eligible for export generally on finding no reasonable or adequate admitted market. A resident broker must hold a current property and casualty producer licence, pass an examination, and establish and continuously maintain an office in this state (26-11-112(f)). The tax is 3 percent of gross premiums less return premiums (26-11-118), with delinquency interest at 9 percent per year, compounded annually (26-11-119). And the affidavit report is due on or before February 15, May 15, August 15 and November 15 each year, covering the preceding calendar quarter and including a statement of the diligent efforts made and their results (26-11-117).