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This proceeding arose upon a request for hearing made by Lynn Bell (the “Insured”) to contest the pending cancellation of automobile insurance coverage provided by MetLife Auto & Home (the “Company.”) On June 16, 2004, the Company mailed a notice of cancellation effective July 6, 2004 on policy number 6209373020 citing “As of 6/16/04, your full premium payment was not received” 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 August 18, 2004, pursuant to 24-A M.R.S.A. § 2920 with Mary Ellen Albert 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. Luke Cebula, Assistant Counsel, submitted a sworn statement on the Company’s behalf in lieu of appearing at the hearing. In lieu of appearance at the hearing, the Insured submitted a sworn statement dated May 18, 2004, prepared for an earlier hearing.

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

1. The Company provides the Insured with automobile coverage on a semi-annual policy. The subject policy term is effective February 19, 2004 though August 19, 2004, with a premium of $728.00.
2. A down-payment of $182.00 was paid on February 20, 2004. An installment of $190.00 was due March 19, 2004. Payment of $250.00 was received on March 22, 2004.
3. Due to lack of proof of eligibility, the Company removed a transfer discount on March 15, 2004, generating an additional premium amount of $149.00.
4. The next installment bill was processed March 30, 2004, for $233.00, but the exact due date is unknown. A notice of cancellation was mailed on April 30, 2004, to be effective May 20, 2004.
5. On May 27, 2004, the Company reinstated the policy without lapse. A deficit bill for $453 was sent that same day. The exact due date is unknown.
6. On June 2, 2004, the Company re-applied the transfer discount of $88 after receiving proof of prior coverage. The resulting outstanding balance was $365.00.
7. A notice of cancellation was mailed June 16, 2004, to be effective July 6, 2004, unless payment of the past due amount of $365 was received by that date. No payment was received.
8. An error in the application of transfer credit was subsequently discovered and corrected, resulting in an outstanding balance of $304.00.
9. The Insured’s hearing request indicates her belief that the $728.00 original premium was for a one-year policy, rather than a six-month policy. She indicated that the $436.00 she had paid covered her in full until August, with the remaining $296.00 to apply for the rest of the year.

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.” 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.

Mr. Cebula testified in his sworn affidavit that the policy was being cancelled for nonpayment of premium. He stated that the Insured had an outstanding balance of $365.00 on her policy as of June 16, 2004. He stated a subsequent endorsement correction credited the policy with $61.00, which resulted in a premium balance of $304.00.

In Ms. Bell’s request for the hearing, she states that the Company gave one quote and then billed for more than that original quote. She also states that she has paid $436.00 and owes $296.00 in August for the rest of the year. It is clear that the Insured is under the impression her policy is an annual policy with annual premium.

The declarations page of the policy clearly shows that it is a semi-annual policy with a semi-annual premium. The Company submitted a statement of account that shows an installment bill for $190 was mailed on February 27, 2004, and was due on March 19, 2004. The Insured made payment of $250 on March 22, 2004. The next installment bill for $233 was mailed on March 30, 2004, but there is no due date shown on the document submitted regarding the Company’s billing history. That bill was not paid and a notice of cancellation was sent effective May 20, 2004. The policy reinstated on May 27, 2004, and a deficit bill for $453 was sent to the Insured that same day. The Company subsequently credited the Insured $88 upon obtaining proof of prior coverage. Although the Company provided no evidence demonstrating the precise due date of the May 27th bill, the notice of cancellation clearly indicates that as of June 16, 2004, $350 was already “past due.” Accordingly, it can be inferred that both the March 30, 2004, and May 27th 2004, bills were due prior to the issuance of the June 16, 2004, cancellation notice. Although more credits subsequently brought the actual amount due to $304, the Insured made no effort to make any payment after March 22, 2004, towards any bill received. Accordingly, the Company has established that the Insured failed to discharge when due her obligations in connection with payment of premium on the policy as required by § 2912(3). The evidence further demonstrates that the notice of cancellation was received by the Insured after the premium due date as required by § 2914 (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 the Company has established adequate grounds for policy cancellation.

INDEX OF RECORD:
Company Exhibit 1 – Copy of Policy
Company Exhibit 2 - Copy of Cancellation Notice
Company Exhibit 3 – Post Office Certificate of Mailing
Company Exhibit 4 – Statement of Account
Company Exhibit 5 – Luke Cebula’s sworn affidavit

Insured Exhibit 1 – Request for Hearing

ORDER AND NOTICE OF APPEAL RIGHTS
The intended cancellation is hereby approved. MetLife Auto & Home is directed to continue coverage until 12:01 a.m. on November 2, 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 aggrieved nonparty whose interests are substantially and directly affected may initiate an appeal within 40 days of the date of this Decision and Order. There is no automatic stay pending appeal; application for stay may be made in the manner provided in 5 M.R.S.A. § 11004.

Dated October 18, 2004                                              Alessandro A. Iuppa
                                                                                    Superintendent of Insurance

                                                                                    ____________________________________
                                                                                    by Mary Ellen Albert
                                                                                    Designated Hearing Officer

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