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This proceeding arose upon a request for hearing made by Anna Ryerson (the “Insured”) to request the pending cancellation of automobile insurance coverage provided by Vermont Accident Insurance Company (the “Company.”) On May 11, 2004, the Company mailed a notice of cancellation effective May 29, 2004, on policy number B453192-4 citing “non-payment of premium” as the grounds for cancellation. Pursuant to 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 June 30, 2004, pursuant to 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 cancellation. Carla Aversa, Customer Service Manager for the Company, submitted a sworn statement on the Company’s behalf in lieu of appearance at the hearing. The Insured represented herself at the hearing.

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

1. The Company insures four vehicles for the Insured. The subject policy renewed effective March 20, 2004, for a one year term.
2. Payments are made on a monthly basis with the payment due on the second day of each month.
3. As a result of coverage changes, the monthly premium installment dropped to $377.18 as demonstrated by a bill due April 2, 2004. After a credit was applied for earlier changes, the amount due in April was $89.17. That amount was timely paid.
4. The next installment was due May 2, 2004, in the amount of $377.18. A notice of cancellation notice for non-payment of premium was mailed May 11, 2004, requiring payment of the $377.18 by May 29, 2004 to avoid cancellation. No payment was received.

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." (Emphasis added.) See 24-A M.R.S.A. § 2912(3). Section § 2914(1) further states that no cancellation for nonpayment of premium shall be effective unless deemed received after the premium due date.

Ms. Aversa submitted a copy of the cancellation notice and post office certificate of mailing. She stated in her affidavit that the cancellation notice was in compliance with the Maine Automobile Insurance Cancellation Control Act. The cancellation notice indicates the original premium due date was May 2, 2004, and the postal documentation indicates the cancellation notice was mailed to the Insured’s address on May 11, 2004.

Mrs. Ryerson testified that she did not receive a bill in mid-April to be due the beginning of May, nor did she receive the cancellation notice. She stated that the billing amounts have been erratic since she added a new vehicle in December. She recounted several changes she made to her vehicle coverage since the beginning of the year. She submitted copies of the four prior bills to demonstrate that none were for the same amount. She stated that she continually called the agency to determine the correct amount owed for the prior bills. The documents also demonstrate that the Company consistently sent bills in the middle of the month, with a due date of the second of the following month. Mrs. Ryerson testified that the last payment she made was due April 2, 2004.

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 the Company has established adequate grounds for policy cancellation.

The policy renewal declarations page states that the premiums are billed monthly, and the Insured acknowledged her understanding that bills are due at the beginning of each month. The cancellation notice states that the missed premium was due on May 2, 2004. The Insured successfully made payment due on April 2, 2004, and presented evidence of four recent premium bills all due by the second day of the month. All bills presented were issued at least two weeks prior to the due date stated on the bill. Although the Insured claimed that she never received a bill for her May payment, the documentation accompanying the Insured’s hearing request indicates that she waited until June 2, 2004, an entire month after the usual due date of her premiums, to inquire after the missing bill. I find that based upon the Insured’s prior billing history, the Insured reasonably should have known that a payment was due on May 2, 2004, and she should have made earlier efforts to contact the Company in the event that she did not receive a bill. The monthly premium installment of $377.18 was also not unknown to the Insured as demonstrated by her receipt of the April bill. Accordingly, the Insured failed to “discharge when due any of [her] obligations in connection with the payment of premium on the policy” thus meeting the definition of “nonpayment of premium” under § 2912(3). Although the Insured also maintains that she did not receive the cancellation notice at issue, the postal service certificate of mailing submitted by the Company documents that the cancellation notice was mailed to the Insured’s correct address on May 11. Therefore, the cancellation notice is deemed received after the premium due date of May 2. See 24-A M.R.S.A. § 2915 (“A postal 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.”) Accordingly, based upon the evidence presented, the cancellation action meets the requirements of 24-A M.R.S.A. § 2914.

INDEX OF RECORD:
Company Exhibit 1 – Affidavit of Carla Aversa
Company Exhibit 2 – Post Office Certificate of Mailing
Company Exhibit 3 – Copy of Policy
Company Exhibit 4 – Cancellation Notice

Insured Exhibit 1 – February 2003 letter
Insured Exhibit 2 – Hearing Request
Insured Exhibit 3 – Bill due January 2, 2004
Insured Exhibit 4 – Bill due February 2, 2004
Insured Exhibit 5 – Bill due March 2, 2004
Insured Exhibit 6 – Bill due April 2, 2004

ORDER AND NOTICE OF APPEAL RIGHTS
The intended cancellation is hereby approved. Vermont Accident Insurance Company is directed to continue coverage until 12:01 a.m. on September 8, 2004 unless a subsequent valid notice of cancellation has been effected in accordance with applicable law. If a subsequent cancellation has taken effect, the policy terminates on the earlier date stated in the subsequent cancellation notice.

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 24, 2004                                                Alessandro A. Iuppa
                                                                                    Superintendent of Insurance

                                                                                    ____________________________________
                                                                                    by Connie Mayette
                                                                                    Designated Hearing Officer

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