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In RE:

Robert Baizley vs. Memberselect Insurance Company

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FINDINGS AND DECISION Hearing 2003-13168 September 15, 2003

This proceeding arose upon a request for hearing made by Robert Baizley to contest the pending cancellation of automobile insurance coverage provided by Memberselect Insurance Company. On April 30, 2003, the insurer mailed a notice of cancellation effective May 20, 2003 on policy number A18000632306, citing as the grounds for cancellation, “nonpayment of premium”. Pursuant to 24-A M.R.S.A. §§ 2915 and 2920, Memberselect Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on June 11, 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 the proof or evidence given by the insurer to support its reason for policy cancellation. Staff representing Memberselect Insurance Company submitted a sworn statement in lieu of appearing at the hearing. Robert Baizley represented himself at the hearing.

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

1. Memberselect Insurance Company insures the automobile exposure of Robert Baizley under policy # A18000632306. The policy renewed effective February 17, 2003.
2. The policy renewed with three vehicles insured: 1994 Audi at $87.00 for six months, 1999 Saab at $487.00 for six months, and a 1999 Mercedes at $603.00 for six months. The total premium for six months was $1,177.00.
3. The original premium for six months was $1,212.00. At renewal, a credit of $35.00 was applied due to policy changes per the insured’s request on January 17, 2003. Mr. Baizley requested that all coverages except the “Other Than Collision” coverage on the 1994 Audi be removed. There was a $20.00 increase in premium for the period of January 17, 2003 to February 17, 2003.
4. On January 23, 2003, the first installment invoice was mailed for $294.00 due on February 17, 2003. Payment was received on February 21, 2003. This invoice included $3.00 service fee.
5. On March 18, 2003 a second installment invoice was mailed due April 7, 2003 for $591.00. Each installment invoice included a $3.00 service fee. Payment was received on April 9, 2003 for $314.00, leaving an amount that was due.
6. On April 18, 2003, a third installment invoice was mailed due May 8, 2003 for $575.00. This also included a $3.00 service fee.
7. On April 30, 2003, Pending Cancellation Notice was mailed to be effective May 20, 2003. No payment was received so the policy cancelled effective May 20, 2003.

ANALYSIS AND CONCLUSION OF LAW

Title 24-A M.R.S.A. § 2914 (1) permits an insurer to cancel a policy for nonpayment of premium, which is defined as “failure of the named insured to discharge when due any of his obligations in connection with the payment of premium on the policy, or any installment of a premium.”

Memberselect Insurance Company has demonstrated that the premium was due on May 20, 2003. No payment was received so the policy cancelled on that date.

Mr. Baizley testified that he purchased the Mercedes in January and got a binder. He received the declaration page on January 23, showing the three insured vehicles. On or about February 14, 2003, Mr. Baizley received an invoice showing his premium was much higher, almost doubled.

Mr. Baizley testified that when he received the invoice, he contacted the AAA Call Center in Portland several times asking the reason for the increase. He stated that the person, he spoke with at the call center, told him she did not have an explanation but would find out and get back to him. He testified that he never paid the bill waiting for an explanation. At the time of the hearing, he had never received an explanation. Mr. Baizley testified that the declaration page that he had was different than that submitted by Memberselect for the hearing. Mr. Baizley had the declaration page that was effective 8/17/2002 to 2/17/2003 and the company submitted the current policy declaration page that was effective 2/17/2003 and expired 8/17/2003. Mr. Baizley also stated that his policy cancelled before the due date.

The cancellation notice submitted with Mr. Baizley’s request for the hearing shows the notice was mailed on April 30, 2003 to be effective May 20, 2003. Based on the dates of the various billing statements, the minimum amount due of $591.00 on April 7, 2003 was not fully paid. Although the cancellation notice would not be deemed received after the due date of the third invoice, the invoice due April 7, 2003 was not paid in full. The cancellation notice mailed April 30 was mailed and therefore also deemed received after the due date of April 7.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 2920. Memberselect Insurance Company bears the burden of proof for establishing that the statutory grounds for policy termination exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that Memberselect Insurance Company has established adequate grounds for policy cancellation. The cancellation notice that was issued shows the cancellation date of May 20, 2003.

INDEX OF RECORD:
Exhibit 1 - request for hearing
Exhibit 2 - copy of notice
Exhibit 3 - Robert Burke’s sworn statement
Exhibit 4 - current policy declaration page
Exhibit 5 - copy of policy
Exhibit 6 - original declaration page

ORDER AND NOTICE OF APPEAL RIGHTS

The intended cancellation is hereby approved. Memberselect Insurance Company is hereby directed to continue coverage under policy #A1800063206 until September 30, 2003 at 12:01 am to allow Mr. Baizley the opportunity 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 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.

Dated September 15, 2003

Alessandro A. Iuppa Superintendent of Insurance ____________________________________ By Mary Ellen Albert Designated Hearing Officer

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