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This proceeding arose upon a request for hearing made by Tanya Bormet (the “Insured”) to contest the pending nonrenewal of homeowners insurance coverage provided by Allstate Indemnity Company (the “Company.”) On November 16, 2004, the Company mailed a notice of nonrenewal effective January 1, 2005, on policy number 0919170625, citing “[w]e reviewed your claim history and found that you have had the following claim(s): 08/28/2003 $976.69 All Other Perils, 06/18/2004 $1,836.21 Theft on Premises” as the grounds for nonrenewal. Pursuant to 24-A M.R.S.A. § 3054, the Insured's hearing request was timely.

A hearing in this matter was held pursuant to 24-A M.R.S.A. § 3054 on December 15, 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 the proof or evidence given by the Company to support its reason for policy nonrenewal. Roger Worsman, Senior Product Consultant for the Company, submitted a sworn statement in lieu of appearance on the Company’s behalf. 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 has insured the residence for the Insured under the subject policy since January 1, 2003.
2. On June 18, 2004, personal property was stolen from the premises. The residence was locked with deadbolts at the time, and the thief gained entrance by removing a window. The Company paid $1,836.21.
3. On August 28, 2003, a large tree limb fell from the Insured’s tree, damaging her fence and trampoline. The Company paid $976.69 for replacement of the damaged property and removal of the limb. The tree has been completely removed.

ANALYSIS AND CONCLUSION OF LAW
Effective July 30, 2004, 24-A M.R.S.A. § 3051 states that "the reason for nonrenewal must be a good faith reason and related to the insurability of the property or a ground for cancellation pursuant to section 3049." If an insurer's reason for nonrenewal is not based upon a permitted cancellation ground, § 3054 requires the insurer to establish the proof or evidence that the reason is a good faith reason and related to insurability.

Mr. Worsman testified in his affidavit that the Company’s nonrenewal decision is based upon the adverse claim frequency and the Insured’s failure to exercise prudent control over the loss exposures. He submitted documentation of the claims, and stated that the tree loss was possibly caused by diseased or weakened limbs.

Ms. Bormet disputed the Company’s argument and testified that no one from the Company came to examine the tree. She stated there was no evidence that the tree was diseased, but she had removed the entire tree anyway to prevent a recurrence. She also testified that her house was securely locked at the time the break-in occurred. She argued that homeowners insurance is intended to pay for losses, and stated that the Company should not be able to nonrenew when claims occur.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 3054. 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 not established adequate grounds for policy nonrenewal.

Title 24-A, M.R.S.A. § 3051 specifically states that "loss record" by itself is not an acceptable reason for nonrenewal. A company must demonstrate a nexus or pattern to illustrate that the cause or nature of the past claims is such that similar or continued future claims are likely. Simply the fact that claims have occurred does not by itself meet this standard.

The Company provided no evidence to support its contention that the Insured failed to exercise prudent control over her loss exposures. Although the Company theorized that the tree may have been diseased or otherwise weakened, no evidence was provided to support that position. In addition, the Company did not indicate how the theft could have been prevented, as the Insured testified that her house was securely locked at the time and the Company presented no evidence demonstrating otherwise. The occurrence of claims does not automatically equate with a failure on the part of the Insured to address loss exposures.

It is clear from the Company’s testimony that the policy would not have been nonrenewed but for the sole fact that claims occurred. The Company has failed to demonstrate how the Insured’s claim history is related to the insurability of the property.

INDEX OF RECORD:
Company Exhibit 1 – Affidavit of Roger Worsman
Company Exhibit 2 – Post office certificate of mailing
Company Exhibit 3 – June 2004 loss documents
Company Exhibit 4 – August 2003 loss documents
Company Exhibit 5 – Copy of Policy

Insured Exhibit 1 – Hearing Request

ORDER AND NOTICE OF APPEAL RIGHTS
The intended nonrenewal is not approved. Allstate Indemnity Company is directed to renew Policy #0919170625 on the same terms as the expiring policy, with appropriate adjustments for changes in filed rates and forms. If a subsequent valid notice of cancellation of the policy was effected in accordance with applicable law, the order to renew the coverage is negated. If a cancellation has taken effect, the policy will instead terminate on the 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 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 December 16, 2004                                           Alessandro A. Iuppa
                                                                                    Superintendent of Insurance

                                                                                    ____________________________________
                                                                                    by Connie Mayette
                                                                                    Designated Hearing Officer

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