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This proceeding arose upon a request for hearing made by Douglas Jipson to contest the pending cancellation of automobile insurance coverage provided to him by North East Insurance Company. On November 16, 2002, the insurer mailed a notice of cancellation effective December 15, 2002 on policy number 02180011194, citing “material misrepresentation 91 Ford is titled to son Matthew” as the grounds for cancellation. Pursuant to 24-A M.R.S.A. §§ 2915 and 2920, North East Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on January 14, 2003, with Mary Ellen Albert sitting as designated hearing officer, pursuant to 24-A M.R.S.A. §§ 210 and 2920. The purpose of the hearing was limited to establishing the existence of proof or evidence given by the insurer to support its reason for policy cancellation. Staff representing North East Insurance Company appeared at the hearing. Douglas and Beverly Jipson represented themselves at the hearing.

FINDINGS OF FACT
The following facts have been proven by a preponderance of evidence submitted:

1. North East has insured the Jipson’s vehicles since November 17, 1994. The current policy term is from November 17, 2002 to November 17, 2003.
2. In June 2001, the policyholders attempted to add the 1991 Ford to the policy, which was titled to their son Matthew. They were advised by North East that only vehicles titled to them could be insured on their policy.
3. In October 2002, the policyholders again attempted to add the vehicle, which was still titled to Matthew at the time.
4. Bureau of Motor Vehicles (BMV) records indicate that the change of ownership took place December 9, 2002.

ANALYSIS AND CONCLUSION OF LAW

Title 24-A M.R.S.A. § 2914 (2) permits an insurer to cancel an automobile policy based upon fraud or material misrepresentation affecting the policy or the presentation of a claim.

Ethyl Potvin, Personal Lines Manager for North East Insurance Company, testified that in June 2001, the insureds requested that North East add the 1991 Ford to the existing policy. The company’s check of the title indicated that the vehicle was titled to the insured’s son, Matthew. North East informed the agent that it would be necessary to provide Matthew with his own policy. The agent placed Matthew with another company.

Ms. Potvin stated that on October 7, 2002, the Jipsons contacted the agency asking to add the same vehicle again on their policy. They told the agent that it was now their vehicle and Matthew was not residing in their household. Ms. Potvin further stated that on November 12, 2002, the Maine Bureau of Motor Vehicles still showed Matthew as the titled owner of the vehicle. She then informed the agency that North East would be canceling for material misrepresentation. The agent again checked with the insureds and was informed that Matthew was not residing in the household and was not the owner of the vehicle. Ms. Potvin testified that on two separate occasions she called the Jipson’s residence. On one occasion, Matthew answered the phone, and on the other occasion, she was informed that Matthew was out but returning shortly. She also added that she had checked ownership the day of this hearing, January 14, 2003, and Bureau of Motor Vehicle’s records still show Matthew as the owner of the 1991 Ford, with an application pending for the title change to Beverly and Douglas Jipson, indicating a purchase date of December 9, 2002.

Beverly Jipson testified that Douglas Jipson initially paid for the vehicle. Matthew was supposed to have paid for the vehicle once he had obtained a job. Mrs. Jipson also stated that she thought the vehicle was titled to Douglas, as he had paid for the vehicle. She felt that the dealer either assumed that Matthew was the owner and made a mistake when writing the bill of sale, or Matthew told him that he was the owner. She stated that Matthew transferred the registration for a pick up truck, that was on the policy, to the Ford. Shortly after purchasing the vehicle, Douglas discovered that the transmission needed replacing. The vehicle was in a repair shop for several months. Douglas Jipson testified that on October 4, 2002, he had the title signed over to himself and Beverly from Matthew and had full intentions of registering and insuring the vehicle in their names but because the vehicle was still not running, he did not bother. The Jipsons did submit a photocopy of the back of a title that showed the date of 10/4/02. However, the motor vehicle record provided by the insurer indicates that the transfer did not formally take place until December 9, 2002, after the cancellation notice was issued and after the hearing had been requested.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 2920. North East Insurance Company bears the burden of proof for establishing that the statutory grounds for policy cancellation exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that North East Insurance Company has established adequate grounds for policy cancellation.

INDEX OF RECORD:
Exhibit 1 – copy of cancellation notice
Exhibit 2 – proof of mailing
Exhibit 3 – policy change request dated 6/18/01
Exhibit 4 – hearing request
Exhibit 5 – copy of Doug Jipson’s check for vehicle purchase

ORDER AND NOTICE OF APPEAL RIGHTS

The intended cancellation is hereby approved. North East Insurance Company is directed to continue coverage under policy #02180011194 until May 30, 2003 at 12:01 a.m. to allow Beverly and Douglas Jipson time to obtain other coverage.

This Decision and Order is a final agency action within the meaning of the Maine Administrative Procedure Act. It is appealable to the Superior Court in the manner provided in Title 24-A M.R.S.A. § 236 and M.R. Civ. P. 80C. Any party to the hearing may initiate an appeal within 30 days after receipt of this notice. Any nonparty whose interests are substantially and directly affected may initiate an appeal within 40 days of the effective date of this Decision and Order.

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