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James Bomba v. Countryway Insurance Company

Held February 17, 2011 – Docket No. INS-11-2008
Decision Issued: February 28, 2011

The policyholder requested a hearing to contest cancellation of a homeowners policy for several stated conditions that had been the subject of a loss control recommendation letter. The policy contract did not include “failure to comply with loss control recommendations” as a permitted ground for cancellation as the amendatory form outlining the cancellation provisions is a 1998 edition.

Held: For the insured. Bureau of Insurance Rule 355 Section 7.C. requires the insurer to prove that the stated reason is both a permitted cancellation ground under 24-A M.R.S.A. § 3049 and included as a basis for cancellation under the terms of the subject policy. The policy only reflects the original five cancellation grounds in effect in 1998, and therefore the company is unable to utilize 24-A M.R.S.A. § 3049(10), which was enacted in 2004.