An Act To Guarantee That Consumers Receive Notification of Insurance Policy Cancellation
Maine Legislature, Session 121, LD 1678
Committee: Insurance and Financial Services
Sponsors: HALL, HATCH, EARLE, TRAHAN, WALCOTT
Amends: 24-A MRSA §2739, 24-A MRSA §2809-A, 24-A MRSA §2908, 24-A MRSA §2915, 24-A MRSA §3002, 24-A MRSA §4209

Legislative Document 
No. 1678 
S.P.61O 
In Senate, December 17, 2003 
An Act To Guarantee That Consumers Receive Notification of 
Insurance Policy Cancellation 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Secretary of the Senate on December 16, 2003. Referred to the Committee 
on Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant 
to Joint Rule 218 . 
Presented by Senator HALL of Lincoln. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senator: HATCH of Somerset, Representatives: EARLE of Damariscotta, 
HATCH of Skowhegan, TRAHAN of Waldoboro, WALCOTT of Lewiston. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2739. as enacted by PL 1969, c. 132, §l, 
is repealed and the following enacted in its place: 
§2739. Lapse of policy, advance notice; limitation of action 
An individual policy of health insurance issued or delivered 
in this State, except a policy that by its terms is renewable or 
continuable with the insurer's consent, or except a policy the 
premiums for which are payable monthly or at shorter intervals, 
may not terminate or lapse for nonpayment of any premium until 
the expiration of 3 months from the due date of that premium 
unless the insurer, within not less than 10 nor more than 45 days 
prior to the due date, 
has mailed by certified mail, 
return 
receipt reg;uested, to the insured at the insured's last address 
shown by the insurer's records a notice showing the amount of the 
premium and its due date. 
If a notice is not sent, the insured 
may pay the premium in default at any time within the period of 3 
months. 
The affidavit of any officer, clerk or agent of the 
insurer, or of any other person authorized to mail the notice, 
that the notice reg;uired by this section has been duly mailed by 
the insurer in the manner reg;uired is prima facie evidence that 
the notice was duly given. 
Action may not be maintained on any 
policy to which this section applies and that has lapsed for 
nonpayment of any premium unless the action is commenced within 2 
years from the due date of the premium. 
Sec. 2. 24-A MRSA §2809-A, sub-§I-A, as amended by PL 2003, c. 
428, Pt. B, §2, is further amended to read: 
I-A. 
Notification of cancellation. 
An 
insurer 
may 
not 
cancel or refuse to renew any policy for hospital, surgical, 
dental or major medical expense insurance until the insurer has 
provided by 
~iFS~-€lass certified mail, return receipt reg;uested 
at least 10 days' prior notification according to this section. 
The notice must include the date of cancellation of coverage and, 
if applicable, the time period for exercising policy conversion 
rights. 
The notice also must include an explanation of 
any 
applicable grace period. 
Notification is not required when the 
insurer has received written notice from the group policyholder 
that replacement coverage has been obtained. 
A. 
Notice must be mailed to the group policyholder or 
subgroup sponsor. 
B-1. 
At the time of notification under paragraph A, notice 
must be mailed to the certificate holder at the last address 
provided to the insurer by the subgroup sponsor, the group 
policyholder or the certificate holder. 
If the insurer does 
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not have an address on file for the certificate holder, the 
notice must be mailed to the office of the subgroup sponsor, 
if any, or the group peliey-helae~ policyholder. 
The notice 
must also 
include information to the certificate holder 
about the availability of individual coverage as described 
in subsection I-B. 
Sec. 3. 24-A MRSA §2908, sub-§5, ,A, as amended by PL 1991, c. 
885, Pt. E, §31 and affected by §47, is further amended to read: 
A. 
Except for workers' compensation insurance, cancellation 
may not be effective prior to 10 days after receipt by the 
insured of a notice of cancellation. 
Notice must be sent to 
the insured by certified mail. 
return receipt requested. 
Notice of cancellation of workers' compensation insurance is 
subject to Title 
39-A, 
section 403, 
subsection 1. 
The 
notice must state the effective date of and the reason or 
reasons for cancellation. 
Sec. 4. 24-A MRSA §2915, as amended by PL 1989, c. 172, §4, 
is further amended to read: 
§2915. Delivery of notice 
Ne-aetiee Notice of cancellation of a policy shall-ae is not 
effective unless received by the named insured at least 20 days 
prior 
to 
the 
effective date 
of 
cancellationT 
or, 
when 
the 
cancellation is for nonpayment of premium, at least 10 days prior 
to the effective date of cancellation. 
In the event the policy 
is 
an 
automobile 
physical 
damage 
policy, 
like 
notice 
of 
cancellation shall 
must 
also 
be 
given 
to 
any 
other 
person 
mentioned in the loss payable clause. 
Notice must be sent to the 
insured by certified maiL return receipt requested. 
A postal 
service certificate of mailing to 
the 
named 
insured at the 
insured's last known address 
shal~--ae is conclusive proof of 
receipt on the 5th calendar day after mailing . 
Except for a policy whieh that has been in effect for less 
than 60 days at the time notice of cancellation is received by 
the 
named 
insured, 
the 
reason 
for 
cancellation 
sRall 
must 
accompany the notice, together with a notice of the right to 
apply for a hearing before the Superintendent of Insurance within 
days, as provided in section 2920. 
Sec. 5. 24-A MRSA §3002, sub-§l, in that part relating to General 
Conditions and Stipulations, as amended by PL 1989, c. 316, § 1, is 
further 
amended 
by 
amending 
that 
part 
relating 
to 
General 
Conditions and Stipulations in the 9th indented paragraph to read: 
Cancellation of policy. This policy saa:U may be cancelled 
at any time at the request of the insured, in which case this 
Company shall, upon demand and surrender of this policy, refund 
the excess of paid premium above the customary short rates for 
the expired time. 
This policy may be cancelled at any time by 
this Company by ~iviR~ mailing by certified mail, return receipt 
requested 
to 
the 
insured 
a 
ten 
days' 
written 
notice 
of 
cancellation with or without tender of the excess of paid premium 
above the pro rata premium for the expired time, waiea and that 
excess, 
if not tendered, 
saa±± 
must 
be 
refunded 
on 
demand. 
Notice of cancellation saa±± must state that said excess premiumL 
~if not tendered}L will be refunded on demand. 
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Sec. 6. 24·A MRSA §3007, sub.§5, ~A, as enacted by PL 1985, c. 
671, §2, is amended to read: 
A. 
To 
the extent that section 3002 
is applicable, 
the 
notice of cancellation saa±± must be given as provided for 
in that section. 
If section 
3002 r 
is 
not 
applicable, 
cancellation saa±± is not be effective prior to 10 days 
after receipt by the insured of a notice of cancellation. 
The notice saa±± must state the effective date of and the 
reason or reasons for cancellation. 
The notice must be sent 
to the insured by certified mail, return receipt requested. 
Sec. 7. 24·A MRSA §3050, as amended by PL 1989, c. 172, §7, 
is further amended to read: 
§3050. Delivery of notice 
Ne-Re~iee Notice of cancellation of a policy saa±±-be is not 
effective unless received by the named insured at least 20 days 
prior 
to 
the 
effective date 
of 
cancellationr or, 
when 
the 
cancellation is for nonpayment of premium, at least 10 days prior 
to the effective date of cancellation. 
Notice must be sent to 
the 
insured by certified mail, 
return receipt requested. 
A 
postal service certificate of mailing to the named insured at the 
insured's last known address saall--be is conclusive proof of 
receipt on the 5th calendar day after mailing. 
Except for a policy waiea that has been in effect for less 
than 60 days at the time notice of cancellation is received by 
the 
named 
insured, 
the 
reason 
for 
cancellation 
saa±± 
must 
accompany the notice, together with a notice of the right to 
apply for a hearing before the Superintendent of Insurance within 
days, as provided in section 3054. 
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Sec. 8. 24-A MRSA §4209. sub-§6, as amended by PL 2003, c. 
428, Pt. B, §3, is further amended to read: 
6. 
Notification of cancellation. 
A health maintenance 
organization may not cancel or refuse to renew any group contract 
until it has provided by 
~itst--elass certified mail, 
return 
receipt requested at least 10 days' prior notification according 
to 
this 
section. 
The 
notice 
must 
include 
the 
date 
of 
cancellation of 
coverage 
and 
the 
time 
period for 
exercising 
contract conversion rights. 
The notice also must include an 
explanation of any applicable grace period. 
Notification is not 
required when the health maintenance organization has received 
written notice from the group contract holder that replacement 
coverage has been obtained. 
A. 
Notice must be mailed to the group contract holder or 
subgroup sponsor. 
B-1. 
At the time of notification under paragraph A, notice 
must 
be mailed to 
the 
individual enrollee at the last 
address provided to the health maintenance organization by 
the 
subgroup 
sponsor, 
the group contract holder 
or 
the 
individual enrollee. 
If the health maintenance organization 
does 
not 
have 
an 
address 
on 
file 
for 
the 
individual 
enrollee, the notice must be mailed to the office of the 
subgroup sponsor, if any, or the group contract holder. 
The 
notice 
must 
also 
include 
information 
to 
the 
individual 
enrollee about the availability of individual coverage as 
described in section 2809-A, subsection I-B. 
SUMMARY 
This 
bill 
requires 
all 
insurance 
companies 
to 
send 
cancellation notices by certified mail, return receipt requested .