B. An employer shall withdraw from the Act by filing a Form 38 with the Coverage and Compliance Department as in subsection B(1), or, by notifying its insurance carrier as in subsection B(2) below.

1. (1) The employer shall complete and file with the Coverage and Compliance Department the original and one copy of a Form 38.

   1. (a) Upon receipt of a completed, signed, and notarized Form 38, the Coverage and Compliance Department will return to the employer an approved Form 38.
   2. (b) The effective date of withdrawal, sixty days from the date of filing, will appear on the form.
   3. (c) The employer shall provide notice to its employees before the effective date of withdrawal by posting the approved Form 38 conspicuously in the place of employment or by giving each employee, personally, a copy of the approved Form 38.

2. (2) If the employer elects to withdraw from the Act by notifying in writing its workers’ compensation insurance carrier, the employer’s representative shall provide notice to the Commission by taking the following action:

   1. (a) Before the effective date of the employer’s insurance policy’s cancellation, the insurance carrier shall complete and file with the Coverage and Compliance Department the original and one copy of a Form 38 signed by the employer.
   2. (b) Upon receipt of a completed, signed, and notarized Form 38, the Coverage and Compliance Department will return to the insurance carrier an approved Form 38. The insurance carrier shall give the approved Form 38 to the employer.
   3. (c) The effective date of withdrawal, sixty days from the date of filing, will appear on the form.
   4. (d) The employer shall provide notice to its employees as in B(1)(c) above.

D. A nonexempt employer, becoming exempt from the insurance provisions of this Chapter and the Act, may file an exemption with the Coverage and Compliance Department as provided below:

1. (1) File a Form 38, an attached affidavit, and supporting documentation with the Coverage and Compliance Department.
2. (2) The affidavit and supporting documentation must establish the employment and the employer are exempt from the insurance provisions of the Act.
3. (3) The form is subject to approval by the department if the supporting documentation establishes an exemption under the Act.

4. (4) It is the employer’s responsibility to assure compliance with the insurance provisions of the Act.

   1. (a) A Form 38 approved according to this Regulation creates a rebuttable presumption of exemption from the Act.
   2. (b) An exemption established by a Form 38 shall not prevent the department from investigating and, if necessary, requesting prosecution of the employer.
5. (5) The Commission may impose the maximum penalty and fine available against the employer who, although previously exempt from the Act, then operates subject to the Act and fails to comply with the insurance provisions of this Chapter and the Act.