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This proceeding arose upon a request for hearing made by Randy Goldsmith (the “Insured”) to request the pending nonrenewal of automobile insurance coverage provided by North East Insurance Company (the “Company”). On March 12, 2004, the Company mailed a notice of nonrenewal effective April 23, 2004, on policy number 02180084702 citing “Matthew in household has 3 speedings 09/01, 04/03 and 12/03. Has three accidents 04/01, 06/01 and 12/02” as the grounds for nonrenewal. Pursuant to Title 24-A M.R.S.A. § 2920, the Insured's hearing request was made within the statutory time period.

A hearing in this matter was held on May 5, 2004, pursuant to Title 24-A M.R.S.A. § 2920 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 nonrenewal. Ethel Potvin, Personal Lines Manager for the Company, appeared at the hearing on the Company’s behalf. The Insured represented himself at the hearing.

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

1. The Company has insured the Insured since April 23, 2003. The application listed one vehicle and the Insured as the only driver. [Exhibit 1]
2. An underwriting review discovered Matthew Goldsmith’s (the “Son”) driver’s license record with the same address as the Insured. Due to his record of three accidents and one speeding conviction, the Company notified the Insured that the policy would be cancelled during the underwriting period unless a Named Driver Exclusion listing the Son was signed and added to the policy. The Exclusion was subsequently signed and added to the policy.
3. The Company’s underwriting guidelines permit utilization of a Named Driver Exclusion if the number of vehicles does not exceed the number of drivers. The addition of a second vehicle without an additional listed driver on February 13, 2004, triggered a review of the policy.
4. The Son’s driver’s license record reveals the addition of two speeding convictions since the policy was issued. Both violations involved a vehicle owned by the Insured; one violation involved a vehicle insured under the policy. The Son has a total of three speeding convictions incurred during the 36 months preceding the yearly anniversary date of the policy. The convictions occurred on October 9, 2001, May 12, 2003 and February 3, 2004.
5. The Son did not live in the Insured’s household during the past year. The Son only recently changed the address on his driver’s license to reflect his own address.
6. The Son does not own a vehicle.

ANALYSIS AND CONCLUSION OF LAW

Title 24-A, M.R.S.A. §2916-A permits an insurer to nonrenew an automobile insurance policy if specified convictions or accidents have occurred during the 36-month period preceding the yearly anniversary date of the policy. Section 2916-A(1)(D) permits nonrenewal when a named insured or any operator who either resides in the same household or customarily operates an automobile insured under the policy is convicted of operating a motor vehicle in excess of the speed limit on three or more occasions.

Ms. Potvin testified that a CLUE report obtained during the application process in April 2003 showed that the Son lived in the same household as the Insured. In addition, the report identified the Son as the driver in a December 30, 2002, accident while operating a vehicle insured by the Insured. Ms. Potvin stated the Company agreed to continue coverage with a signed Named Driver Exclusion Endorsement as long as the remaining underwriting requirements were met. She further testified that the Son’s motor vehicle record was re-ordered and reviewed after a second vehicle was added to the policy. She noted that the new motor vehicle record showed that the Son had incurred two additional speeding violations. She stated that the Company contacted the Bureau of Motor Vehicles to obtain information on the vehicles being operated by the Son at the time the violations occurred. She testified that one speeding conviction incurred as a result of a violation on April 9, 2003, involved the 96 Subaru previously owned by the Insured. She added that this was also the vehicle involved in the December 30, 2002, accident. On December 22, 2003, she stated that the Son was also stopped for speeding while operating the 99 Mazda insured under this policy, and he presented the Company’s insurance ID card as evidence of insurance. Ms. Potvin testified that the Company would still have to defend its Insured for an accident caused by the Son, despite the existence of the exclusion.

Mr. Goldsmith did not deny his son’s use of his vehicle but testified he knew he would be personally responsible for an accident if one occurred. He stated he was not aware that the Company would have to be involved if an accident occurred while his Son was driving a vehicle insured under the policy. He testified that he believed that his Son’s record should not be considered in the Company’s decision not to renew the policy since his Son was excluded from coverage, but he added that he did not know the second vehicle mattered to the Company. He also testified that his Son had lived in several different places over the past year but not with him. The Insured did not dispute the facts presented by the Company, but he stated that he can now prove Matthew does not live with him since Matthew changed the address on his driver’s license. He further argued that only those people living in his household need to be declared. He advised that Matthew does not have his own vehicle.

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 nonrenewal exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that the Company has established adequate grounds for policy nonrenewal.

Although the Insured testified that his Son is not a resident of the household, he did not dispute the Company’s assertion that his Son is a customary operator of a vehicle insured under the policy. The Company demonstrated two separate instances in which the Son incurred moving violations while driving a vehicle owned by the Insured, and one instance involved a vehicle insured under the policy. The Company has further demonstrated that the Son was involved in an accident while operating a vehicle owned by the Insured. Taken as a whole, the evidence demonstrates that the Son’s use of the Insured’s vehicles is sufficiently frequent to indicate that he “customarily operates an automobile insured under the policy” within the meaning of the statute. As the Son has incurred three speeding convictions meeting the standards of 24-A M.R.S.A. § 2916-A(1)(D), the nonrenewal of this policy meets statutory requirements.

Order and Notice of Appeal Rights

The intended nonrenewal is hereby approved. North East Insurance Company is directed to continue coverage pursuant to 24-A M.R.S.A. § 2920 until 12:01 a.m. on August 20, 2004 to provide an opportunity for 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 date of this Decision and Order.

Dated August 5, 2004                                                  Alessandro A. Iuppa
                                                                                    Superintendent of Insurance

                                                                                    ____________________________________
                                                                                    by Connie Mayette, AU
                                                                                    Hearings Examiner
                                                                                    Designated Hearing Officer

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