Based on my experience with an albeit older Intel RAID chipset, I would expect that if a drive fails the array will then be in a "degraded" state, but should still operate. It should, in essence, still boot from the array - it isn't booting from the raw drive alone (and if I recall correctly, it cannot do so). You would not need to (and probably must not) make any BIOS setting changes, e.g. changing it from RAID to something else.
Neither is exactly correct, but (a) is closer. The BIOS still sees the remaining drive as a RAID *member* operating in "degraded" mode (i.e., its RAID-1 partner mirror is missing in action).
Assuming that the Motherboard BIOS settings are unchanged (in particular that the BIOS disk controller remains in RAID mode), and one does not mess around with the remaining drive, the motherboard will still see it as a RAID member, as will the OS. You actually have to write over the RAID meta-data to turn it back into an "ordinary" drive.
Note that there are actually two pieces of BIOS involved: the Motherboard BIOS and the RAID support BIOS.