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This proceeding arose upon a request for hearing made by Jeremy St. Peter to contest the pending cancellation of property insurance coverage issued to him by Vermont Mutual Insurance Company. On March 19, 2003, the insurer mailed notices of cancellation effective April 5, 2003 on policy number DF1 3-01-93-47 and DF1 3-02-74-10, citing nonpayment of premium as the grounds for cancellation. Pursuant to 24-A M.R.S.A. § 3007, Vermont Mutual Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing on this issue was held on May 1, 2003 with Connie Mayette sitting as designated hearing officer pursuant to Title 24-A M.R.S.A. § 3007. The purpose of the hearing was limited to establishing the existence of proof or evidence given by the insurer to support their reason for policy cancellation. Staff representing Vermont Mutual Insurance Company appeared at the hearing and submitted subsequent written testimony. Jeremy St. Peter did not appear, nor did he submit a sworn statement in lieu of appearance at the hearing.

FINDINGS OF FACT

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

1. Policy DF1 3-01-93-47 covers property in Greenwood, ME. The prior installment premium of $114 was due March 3.
2. Policy DF1 3-02-74-10 covers property in Norway, ME. The prior installment premium of $54.75 was due March 5.
3. Neither payment was received by the due date. Vermont Mutual Insurance Company issued separate notices of cancellation, mailed March 19, 2003, to take effect on April 5. No payment was received prior to that date.

ANALYSIS AND CONCLUSION OF LAW

Title 24-A M.R.S.A. § 3007(2)(A) permits an insurer to cancel a property insurance policy for nonpayment of premium, which is defined in part as “the failure or inability of the named insured to discharge any obligation in connection with the payment of premium…” 24-A M.R.S.A. § 3007(1)(C).

Timothy Gormley, Marketing Representative for Vermont Mutual, testified that the situation for both policies in question is a clear-cut example of nonpayment. He submitted rating summaries for each policy to demonstrate the derivation of the premium and showing when the quarterly installments were due. He stated that no payment was received on either policy for the March installment dates or by the cancellation date.

The Superintendent of Insurance has jurisdiction over this matter pursuant to Title 24-A M.R.S.A. § 3007. Vermont Mutual 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 Vermont Mutual Insurance Company has established adequate grounds for policy cancellation.

INDEX OF RECORD:
Exhibit 1 – Rating Equations
Exhibit 2 – DF1301 Policy Summary
Exhibit 3 – DF1302 Policy Summary
Exhibit 4 – Cancellation Notices
Exhibit 5 – Proof of Mail
Exhibit 6 – Affidavit of Donna Melendy

ORDER AND NOTICE OF APPEAL RIGHTS

The intended termination is hereby approved. Vermont Mutual Insurance Company is directed to continue coverage until May 27, 2003, to allow the policyholder 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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