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On April 23, 2003, Jonathan Blumberg filed a Petition with the Superintendent, pursuant to 24 A M.R.S.A. §§ 229 and 2920, contesting the cancellation of his personal automobile insurance policy by North East Insurance Company for nonpayment of premium. An adjudicatory hearing was held before the Superintendent on May 13, 2003, and the cancellation of Mr. Blumberg’s policy was stayed.1 For the reasons discussed more fully below, Mr. Blumberg’s petition is denied and the cancellation may take effect in 14 days.

North East sent Mr. Blumberg an invoice warning that a payment of $37.00 was due on April 2, 2003, that Mr. Blumberg did not make that payment by the due date, and that North East then sent Mr. Blumberg a timely notice of cancellation, in compliance with the requirements of 24 A M.R.S.A. § 2915, warning that “POLICY CANCELLATION WILL TAKE EFFECT AT 12:01 A.M. ON 4/22/2003,” but offering reinstatement on condition that Mr. Blumberg “remit the Amount Due of $37.00 BEFORE 04/22/2003” (emphasis in original). Although Mr. Blumberg had a long history of late payments on this policy, causing North East to initiate the cancellation process on numerous prior occasions, Mr. Blumberg had always successfully obtained reinstatement. This time, however, Mr. Blumberg did not pay until April 22, and North East refused to reinstate the policy. This much of the factual background is undisputed.

Although Mr. Blumberg questions whether North East had the right to require him to pay this installment by April 2 under penalty of cancellation, I find that the bill was valid and that North East had the right to cancel his policy for nonpayment. It is true that as of April 2, Mr. Blumberg had already paid enough of the annual premium to cover the pro rata share for the following month, but there is nothing improper about requiring payment in advance, and it was well understood even before the April bill was issued that Mr. Blumberg was to pay $37 a month until the annual premium was paid in full. The $7 installment plan service fee and $30 minimum monthly payment were lawful charges pursuant to an approved rating plan, and I find that North East adequately explained, and that Mr. Blumberg fully understood, that the whole purpose of setting a minimum payment threshold is to override the monthly payment formula in cases where the formula would yield a smaller monthly payment.

It is clear from Mr. Blumberg’s testimony that he understood that Monday, April 21 would be his last day of coverage unless the policy was reinstated, and that he also understood that “BEFORE 04/22/2003” meant no later than the close of business on April 21. However, April 21 was Patriot’s Day, and Mr. Blumberg testified that he was surprised to discover that his bank was closed. There is no intervening event that would give rise to a policy claim, nor any other circumstantial evidence that would cast doubt on his uncontroverted and credible testimony, and I find that Mr. Blumberg made a good faith effort to pay the premium by the reinstatement deadline and that he appeared in person at the office of North East’s agent to tender payment as soon as he was able to obtain the money.

However, there was nothing deceptive or otherwise unlawful about establishing a legal holiday as the deadline for reinstatement. There was equally uncontroverted and credible testimony offered on behalf of North East that their offices and the offices of their agent were open on April 21, notwithstanding the holiday, and that they were prepared to receive payment on that date – or any earlier date – and reinstate the policy. The reinstatement terms offered by North East were relatively generous, and there was no legal obligation to offer reinstatement at all. Although many businesses, having made this offer, would have voluntarily extended the reinstatement deadline a few additional hours in the circumstances of this case, North East was within its rights in enforcing the terms of its offer and going through with the cancellation when Mr. Blumberg was unable to comply.

It is therefore ORDERED, pursuant to 24-A M.R.S.A. § 2920, that coverage on the subject policy shall terminate at 12:01 a.m. on June 26, 2003, unless the parties agree in writing to a different termination date, with the premium calculated on a pro rata basis.

This Decision and Order is a final agency action of the Superintendent of Insurance within the meaning of the Maine Administrative Procedure Act. It is appealable to the Superior Court in the manner provided in 24 A M.R.S.A. § 236 (2000) and M.R. Civ. P. 80C. Any party to the hearing may initiate an appeal within thirty days after receiving this notice. Any aggrieved non-party whose interests are substantially and directly affected by the Superintendent’s decision may initiate an appeal on or before July 22, 2003. There is no automatic stay pending appeal; application for stay may be made in the manner provided in 5 M.R.S.A. § 11004.

1 Pursuant to 24-A M.R.S.A. § 210, the Superintendent has appointed Bureau of Insurance Attorney Robert Alan Wake to serve as hearing officer, with full decisionmaking authority.

PER ORDER OF THE SUPERINTENDENT OF INSURANCE

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