An Act To Amend the Maine Insurance Code
Maine Legislature, Session 121, LD 0667
Committee: Insurance and Financial Services
Sponsors: LaFOUNTAIN, MAYO, GLYNN, PERRY, YOUNG
Amends: 24-A MRSA §3007, 24-A MRSA §3049

Legislative Document 
No. 667 
S.P.231 
In Senate, February 11, 2003 
An Act To Amend the Maine Insurance Code 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator LaFOUNTAIN of York. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senator: MAYO of Sagadahoc, Representatives: GLYNN of South Portland, 
PERRY of Bangor, YOUNG of Limestone. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24·A MRSA §2304·A, sub·§I. as repealed and replaced by 
PL 1991, c. 377, §10, is amended to read: 
1. 
Every insurer shall file with the superintendent, except 
as 
to 
inland marine 
risks L 
which 
by general 
custom of 
the 
business are not written according to manual rates or rating 
plans, every manual rate, minimum premium, 
class rate, rating 
schedule or rating plan and every other rating rule, and every 
modification of any of the foregoing waiea that it proposes to 
use. 
Every such filing must state the effective date of the 
filingr and indicate the character and extent of the coverage 
contemplated. 
Every such filing must be made not less than 30 
days in advance of the stated effective date unless that 30-day 
requirement 
is 
waived 
by 
the 
superintendent 
in 
unusual 
circumstances based upon the complexity of the rate filing. The 
superintendent shall expedite the review and approval of such 
rate 
filings 
whenever 
possible. 
The 
effective 
date 
may 
be 
suspended by the superintendent for 
a 
period of time not to 
exceed 60 days. 
Sec. 2. 24·A MRSA §2412. sub-§2. as amended by PL 1973, c. 
585, §12, is further amended to read: 
2. 
Every 
s~ea filing saall must be made not less than 30 
days in advance of any 
s~ea delivery. At the expiration of 
s~ea 
the 30 daysL the form so filed saall-se is deemed approved unless 
prior thereto it has been affirmatively approved or disapproved 
by 
order 
of 
the 
superintendent. 
The 
superintendent 
shall 
expedite 
the 
review 
and 
approval 
of 
such 
filings 
whenever 
possible. 
Approval of 
aay--6~€a the form by the superintendent 
saall-€9astit~te constitutes a waiver of any unexpired portion of 
s~ea the waiting period. 
The superintendent may, 
in unusual 
circumstances based upon the complexity of the filing, extend by 
not more than an additional 30 days the period within which ae 
the superintendent may S9 affirmatively approve or disapprove any 
s~eh form, by giving notice to the insurer of 
s~ea the extension 
before expiration of the initial ~g-Qays 30-day period. 
At the 
expiration of aaY--&l*ea the period as so extended, 
and in the 
absence of 
s~ea prior affirmative approval or disapproval, any 
s~ea form shall-se is deemed approved. 
The superintendent may at 
any time, after hearing and for cause shown, withdraw any 
s~ea 
approval. 
Sec. 3. 24·A MRSA §3007. sub.§2, as enacted by PL 
1985, c. 
671, §2, is amended to read: 
2. 
Except as provided by subsection 8, 
no contract of 
property insurance may be cancelled by an insurer prior to the 
expiration of the policy, except for one or more of the following 
grounds: 
A. 
Nonpayment of premium; 
B. 
Fraud or material misrepresentation made by or with the 
knowledge of the named insured in obtaining the policy, in 
continuing the policy or in presenting a claim under the 
policy, or the discovery of the commission of a fraudulent 
insurance act as defined in section 2186; 
C. 
Substantial change in the risk whieh ~ 
increases the 
risk of loss after insurance coverage has· been issued or 
renewed, 
including, 
but not limited to, 
an 
increase 
in 
exposure due to regulation, legislation or court decision; 
D. 
Failure 
to 
comply 
with 
reasonable 
loss 
recommendations within a reasonable per iod of time, 
exceed 120 days; 
control 
not to 
E. 
Substantial breach of contractual duties, conditions or 
warranties; e~ 
F. 
Determination 
by 
the 
superintendent 
that 
the 
continuation of a class or block of business to which the 
policy belongs will jeopardize a company's solvency or will 
place the insurer in violation of the insurance laws of this 
State or any other stateTL 
G. 
Failure by the applicant or the insured to disclose a 
negligent act or acts, or a failure to disclose material 
facts 
that 
would, 
if 
coverage 
is 
effectuated 
without 
knowledge by the insurer, substantially alter the terms of 
the policy to be issued or renewed; 
H. 
Discovery that the insured property is unoccupied and 
that custodial care is not maintained on the property: 
I. 
The presence of a 
trampoline on the premises if the 
insured is notified that the policy will be cancelled if the 
trampoline is not removed and the trampoline, after notice, 
remains on the property 30 or more days after the date of 
notice; 
J. 
The 
presence 
of 
a 
swimming 
pool 
upon 
the 
insured 
property that is not fenced in, 
in accordance with the 
standards established in Title 22, section 1631, if the pool 
fence remains in noncompliance with those standards for 30 
days after notice by the insurer of the defective condition 
and intent to cancel the policy: 
K. 
A claims history that entails 4 losses within 5 years, 
except that those losses may not include those sustained in 
a 
catastrophic 
loss 
event 
as 
defined 
by 
an 
advisory 
insurance organization acceptable to the superintendent; 
L. 
A loss occasioned by a dog bite, unless, after notice of 
cancellation or nonrenewal is received, the insured removes 
the dog; or 
M. 
Failure to correct, within 90 days, conditions that pose 
imminent fire hazards. 
The grounds listed in paragraphs A to E saall must be contained 
in all policies issued, 
issued for delivery or renewed on or 
after the effective date of this section. 
The grounds listed in 
paragraphs 
F to M must be contained in all policies issued, 
issued for delivery or renewed on or after October 1, 
2003. 
Insurers saall have 30 days from ~ae those effective aa~e-ef-~ais 
see~ieR 
dates 
to 
notify 
insureds 
of 
these 
grounds 
for 
cancellation on policies issued or issued for delivery before ~ae 
those effective aa~e-ef-~ais-see~ieR dates. 
Sec. 4. 24-A MRSA §3007. sub-§8. as amended by PL 1991, c. 25, 
§2, is further amended to read: 
8. 
This notice does not apply to any insurance policy that 
has not been previously renewed if the policy has been in effect 
less than eG 
days at the time notice of cancellation is 
mailed or otherwise delivered, except as provided in subsection 
1, 
paragraph A and subsection 5, 
paragraphs 
A and 
C. 
This 
section does 
not 
apply 
to 
any 
policy subject to 
the 
Maine 
Property Insurance Cancellation Control 
Act, 
subchapter 
V 2· 
This section does not apply to any policy issued pursuant to any 
assigned risk plan. The superintendent may suspend, in whole or 
in part, the applicability of this section to any insurer if, ln 
the superintendent's discretion, its application will endanger 
the ability of the insurer to fulfill its contractual obligation. 
Sec. 5. 24-A MRSA §3049. sub-§§3 to 5. as enacted by PL 1973, 
c. 239, are amended to read: 
3. 
Discovery of 
fraud or material misrepresentation by 
ei~aeF anyone of the following: 
A. 
The 
insured or ais 
the 
insured's 
representative 
in 
obtaining the insurance; 
B. 
The named insured in pursuing a claim under the policy; 
or 
C. 
The 
discovery 
of 
the 
commission 
of 
a 
fraudulent 
insurance act as defined in section 2186; 
4. 
Discovery of ~Fe66±y negligent acts or omissions by the 
insured 
6~a6~aa~ia±±y--iaeFea6ia~--aay--eE--~ae--aa~aFa6--ia6~Fea 
a~aia6~ or failure to disclose material facts that would, if 
coverage 
is 
effectuated 
without 
knowledge 
by 
the 
insurer, 
substantially alter the terms of the policy to be issued or 
renewed; 
5. 
Physical changes in the insured property waiea-Fe6~±~-ia 
~ae-i?"i"~-t:-y--*<:-GfA-l:-ag--y.a4H6~raa±eT not timely disclosed to the 
insurer for hazard coverages under the policy to be issued or 
renewed; 
Sec. 6. 24-A MRSA §3049, sub-§§6 to 12 are enacted to read: 
6. 
Discovery that the insured property is unoccupied and 
that custodial care is not maintained on the property; 
7. 
The presence of a trampoline on the premises if the 
insured is notified that the policy will be cancelled if the 
trgmpQline is 
nQt 
remQved 
and 
the 
trampoline, 
after notice, 
remain:;; on the property 30 or more days after the date of notice; 
8. 
The 
presence 
of 
a 
swimming 
pool 
upon 
the 
insured 
property that is not fenced in, in accordance with the standards 
established in Title 22, section 1631, if the pool fence remains 
in noncompliance with those standards for 30 days after notice by 
the insurer Qf the defective condition and intent to cancel the 
policy; 
9. 
A claims history that entails 4 losses within 5 years, 
except thgt thQse losses may not include those sustgined in a 
cata:;;trQphic 
loss event 
as 
defined by 
an 
advisory insurance 
organization gcceptable to the superintendent; 
10. 
A loss occasiQned by a dog bite, unless, after notice 
of cancellgtion or nonrenewal 
~s received, the insured removes 
the dog; 
11. 
Failure to correct, within 90 days, 
conditions that 
po:;;e imminent fire hazards; or 
12. 
Determination 
by 
the 
superintendent 
that 
the 
continuation of a class or block of business to which the policy 
belQng:;; will jeQPgrdize a company's solvency or will place the 
insurer in violation of the insurance laws of this State or any 
other stgte. 
Sec. 7. 24·A MRSA §3049, 2nd" as amended by PL 1979, c. 663, 
§§150 and 151, is further amended to read: 
This section saa±± ~ 
not apply to any policy or coverage 
waiea that has been in effect less than 99 120 days at the time 
notice of cancellation is received by the named insured, or 99 
days 
in the case of residential property waiea that is 
expected to 
be 
continuously unoccupied 
for 
months 
in 
any 
12-month period and waiea that is other than the 
insured's 
primary residence, unless it is a 
renewal policy. 
An insured 
saa±± 
does 
not 
have 
the 
right 
to 
a 
hearing 
before 
the 
Superintendent 
of 
Insurance 
for 
the 
purpose 
of 
contesting 
cancellation of a new policy that has been in force less than 99 
days or 99 150 days in the case of residential property other 
than the insured's primary residence waiea that is expected to be 
continuously unoccupied for 3 months in any 12-month period. 
Sec. 8. 24·A MRSA §3051. as amended by PL 1979, c. 347, §12, 
is further amended to read: 
§3051. Notice of intent 
~e An insurer saa±± may not fail to renew a policy except by 
notice to the insured as provided in this subchapter. 
A notice 
of intention not to 
renew 
saa±± is not ae effective unless 
received by the named insured at least 30 days prior to the 
expiration 
date 
of 
the 
policy. 
A 
post-office 
department 
certificate of mailing to the named insured at ais the insured's 
last known address saa±l-ae is conclusive proof of receipt on the 
3rd calendar day after mailing. 
The reason saa±l must accompany 
the notice of intent not to renew, together with notification of 
the right to apply for a hearing before the Superintendent of 
Insurance within 30 days as provided. 
The reason or reasons for the intended 
saa±± !!lli..§..t accompany the notice of intent not 
nonrenewal action 
to renew and the 
reason or reasons saa±± !!l1!Jit. be explicit. 
Explanations such as 
"underwriting reasons," "underwriting experience," "loss record," 
"location of risk," "credit report" and similar insurance terms 
are not by themselves acceptable explanations of an insurer's 
intended nonrenewal of a policy insuring property of the kind 
defined in section 3048. 
The reason for nonrenewal saa±± must be 
a good faith reason rationally related to the insurability of the 
property, or that constitutes a ground for cancellation pursuant 
to section 3049. 
This section saal± does not apply: 
./ 
\ 
.... 
i 
1. 
If the insurer has manifested its willingness to renew; 
2. 
If the insured fails to pay any premium due or any 
advance premium required by the insurer for renewal. 
SUMMARY 
The 
bill 
requires 
the 
Superintendent 
of 
Insurance 
to 
expedite the review and approval of rate filings. 
It also amends 
the property cancellation and nonrenewal laws. 
It expands the 
grounds 
for 
which 
a 
contract 
of 
property 
insurance 
may 
be 
cancelled prior to the expiration of the policy to include the 
following: 
1. 
The commission of a fraudulent insurance act; 
2. 
The failure by the applicant or the insured to disclose 
a negligent act or material facts that would alter the terms of 
the pOlicy; 
3. 
The discovery that the insured's property is unoccupied 
and custodial care is not being maintained; 
4. 
The presence of 
insured is notified that 
trampoline is not removed; 
a 
trampoline on 
the policy will 
the premises 
be cancelled 
if 
if 
the 
the 
5. 
The presence of a swimming pool on the insured property 
that is not fenced in if, after notification, the noncompliance 
continues; 
6. 
A claims history that includes 4 losses wi thin 5 years, 
unless those losses include a catastrophic loss event; 
7. 
A loss occasioned by a dog bite, unless, after notice of 
cancellation, the insured removes the dog; or 
8. 
Failure to correct ln 
days 
conditions that pose 
imminent hazards.