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This proceeding arose upon a request for hearing made by Larry & Melanie Sites (hereinafter the “Insured”) to contest the pending cancellation of automobile insurance coverage provided by State Farm Mutual Automobile Insurance Company (hereinafter the “Company”). On February 25, 2004, the Company mailed a notice of cancellation effective March 12, 2004 on policy number 012 9925-F10-19B, citing nonpayment of premium as the grounds for cancellation. Pursuant to 24-A M.R.S.A. § 2920, the Insured's hearing request was timely.

A hearing in this matter was held pursuant to 24-A M.R.S.A. § 2920 on March 31, 2004 with Connie Mayette sitting as designated hearing officer. See 24-A M.R.S.A. § 210. The purpose of the hearing was limited to establishing the existence of proof or evidence given by the Company to support its reason for policy cancellation. Nancy Corbett, Underwriting Team Leader for the Company, submitted a sworn statement on the Company’s behalf in lieu of appearance at the hearing. The Insureds did not appear or submit a statement, nor did they request that the hearing be continued to a later date.

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

1. The Company insures a vehicle for the Insureds with a current policy term of December 10, 2003 to June 10, 2004.
2. A notice of cancellation for nonpayment of premium was mailed February 25, 2004, to be effective March 12, 2004.

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, stating that no notice of cancellation for nonpayment of premium shall be effective unless deemed received under section 2915 after the premium due date. Title 24-A M.R.S.A. § 2915 states that a postal service certificate of mailing to the named insured at the insured’s last known address shall be conclusive proof of receipt on the fifth calendar day after mailing. This section also states that the reason for cancellation shall accompany the notice, together with a notice of the right to apply for a hearing before the Superintendent of Insurance within 30 days, as provided in section 2920. (emphasis added)

Ms. Corbett states in her affidavit that the Company has met the necessary grounds for cancellation of an automobile policy, citing the definition of nonpayment of premium found in 24-A M.R.S.A. § 2912 and the “delivery of notice” wording from section 2915. She submitted a copy of the cancellation notice and the Post Office Certificate of Mailing. What was not provided, however, was evidence of the preceding bill notifying the Insured of the amount and date due. As the governing statute states the notice is not effective unless deemed received after the premium due date, it is not possible to determine that the notice of cancellation is in fact valid without documentation of the date the premium had been due. Furthermore, the notice of cancellation submitted by the company does not include the statutorily required notice of the right to apply for a hearing before the Superintendent. This omission also serves to invalidate the notice.1

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 2920. The 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 State Farm Mutual Automobile Insurance Company has not established that the subject policy was appropriately cancelled or that grounds exist to do so.

INDEX OF RECORD:
Exhibit 1 – Affidavit of Nancy Corbett
Exhibit 2 – Post Office Certificate of Mailing
Exhibit 3 – Cancellation notice
Exhibit 4 – Copy of Policy

ORDER AND NOTICE OF APPEAL RIGHTS
The intended cancellation is not approved. Coverage under Policy #012 9925-F10-19B shall continue in force without lapse unless and until a subsequent valid notice of cancellation or nonrenewal is effected in accordance with applicable law.

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.

1 See Seider v. Board of Examiners of Psychologists, 710 A.2d 890 (Me. 1998). Also, Savings & Loan Assoc. of Bangor v. Tear, 435 A.2d 1083, 1086-87 (Me. 1981).

Dated May 7, 2004                                                      Alessandro A. Iuppa
                                                                                    Superintendent of Insurance

                                                                                    ____________________________________
                                                                                    By Connie Mayette, AU
                                                                                    Hearings Examiner
                                                                                    Designated Hearing Officer

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