Page:Parker v. Southern Farm Bureau Casualty Insurance Co.pdf/6

1078   of the trial court's ruling on this question in order to address Parker's arguments regarding his bad-faith claim. Parker's policy was for a six-month period, and the declaration sheet issued stated that the policy period was June 9, 1993, through December 9, 1993. The trial court based its award of summary judgment upon Farm Bureau's failure to comply with the notice provision of Parker's policy and with the ten-day notice required by Arkansas statute. This statutory notice requirement is found in the subchapter dealing with cancellation and nonrenewal of automobile liability, physical damage and collision policies, and provides as follows:

"No notice of cancellation to any named insured shall be effective unless mailed or delivered at least twenty (20) days prior to the effective date of cancellation, provided that, where cancellation is for nonpayment of premium, at least ten (10) days' notice of cancellation accompanied by the reason therefor shall be given."

Ark. Code Ann. § 23-89-304(a)(2) (emphasis added).

Parker's policy contained a provision entided "Cancellation," which essentially tracked the statutory notice provision, and provided as follows:

"If we cancel your policy, for non payment of premium, we will notify you in writing at least ten (10) days before the date of cancellation. If we cancel your policy for any other reason we will notify you in writing at least twenty (20) days before the date of cancellation The policy period will end of the date and time stated in the notice."

(Emphasis added.) The policy contained a further provision concerning renewal premium and policy periods:

"Your Declaration or renewal certificate will show the policy period. Unless cancelled, this policy may be renewed at our option if the required premium is paid by you and accepted by us. Failure to pay on time will end coverage. If your policy does expire and you send a later payment of the required premium, we may reinstate at our option, as of the date and time the payment is received. A new policy period is then established."

The only notice Farm Bureau sent to Parker prior to cancellation of his policy was the following "Billing Notice," sent