An Act To Amend the Laws Related to Cancellation and N onrenewal of Insurance
Maine Legislature, Session 122, LD 0541
Committee: Insurance and Financial Services
Sponsors: MAYO, FISCHER, SULLIVAN, BRAUTIGAM, LINDELL, MARRACHE, PERRY
Amends: 24-A MRSA §2902, 24-A MRSA §2912, 24-A MRSA §2915

Legislative Document 
No. 541 
S.P. 167 
In Senate, February 1,2005 
An Act To Amend the Laws Related to Cancellation and 
N onrenewal of Insurance 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MAYO of Sagadahoc. 
Cosponsored by Representative FISCHER of Presque Isle and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senator: SULLIVAN of York, Representatives: BRAUTIGAM of Falmouth, LINDELL of 
Frankfort, MARRACHE of Waterville, McKANE of Newcastle, PERRY of Calais. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2902, sub-§ 1, as amended by PL 1975, c. 
437, §l, is further amended to read: 
1. 
He A policy insuring against liability arl.sl.ng out of 
the ownership, maintenance or use of any motor vehicle shall may 
not be delivered or issued for delivery in this State with 
respect to any such vehicle registered or principally garaged in 
this State, unless coverage is provided eheFeiB in that policy or 
supplemental eheFeee to that policy for the protection of persons 
insured eheFeQBSeF under that policy who are legally entitled to 
recover 
damages 
from 
owners 
or 
operators 
of 
uninsured, 
underinsured or hit-and-run motor vehicles, for bodily injury, 
sickness 
or 
disease, 
including 
death, 
resulting 
from 
the 
ownership, maintenance or use of such an uninsured, under insured 
or hit-and-run motor vehicle. A policy may limit coverage under 
this section to insured persons as defined in that policy. 
The 
coverage heFeiB required under this subsection may be referred to 
as 
"uninsured vehicle 
coverage." 
For 
the 
purposes 
of 
this 
section, "underinsured motor vehicle" means a motor vehicle for 
which coverage is provided, but in amounts less than the minimum 
limits for bodily injury liability insurance provided for under 
the motorist's financial responsibility laws of this State or 
less than the limits of the injured party's uninsured vehicle 
coverage. 
Sec. 2. 
24-A MRSA §2912, sub-§2, as amended by PL 1977, c. 
403, §l, is further amended to read: 
2. 
Renewa1 or renew. "Renewal" or "to renew" means the 
issuance and delivery by an insurer or an affiliate of an insurer 
of a policy replacing at the end of the previous policy term a 
policy previously issued and delivered by ehe same that insurer 
or affiliated insurer, 
or the issuance 
and delivery of 
a 
certificate or notice extending the coverage of the policy beyond 
its original term. Any renewal policy, other than a replacement 
policy for an unfinished term, with a term of one year or less 
shall se is considered written, 
for 
the purposes of this 
subchapter, for a term of one year. 
Any policy written for 
fixed expiration date 
successive policy terms 
a term longer than one year or with no 
shall se is considered written for 
of one year. 
Sec. 3. 24-A MRSA §2915, as amended by PL 1989, c. 172, §4, 
is further amended to read: 
§2915. De1ivery of notice 
Page l-LR1704(1) 
He 
'A 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 cancellation, 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. A postal service certificate of mailing to 
the named insured at the insured's last known address shall 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 shall 
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. 
Notwithstanding sections 
2914 
and 
2916-11., 
a 
notice of 
nonrenewal is not required if a policyholder is notified by the 
insurer that the policy is being transferred to an affiliate of 
that insurer for future coverage. 
Sec. 4. 24-A MRS A §3007, sub-§l, <J[E, as enacted by PL 1985, c. 
671, §2, is amended to read: 
E. 
"Renewal" or "to renew" means the issuance of, or the 
offer to issue by an insurer or an affiliate of an insurer, 
a policy succeeding a policy previously issued and delivered 
by the same insurer or an affiliated insurer or the issuance 
of 
a 
certificate or notice extending the terms of an 
existing policy for a specified period beyond its expiration 
date. 
Sec. 5. 24-A MRS A §3050, as amended by PL 1989, c. 172, §7, 
is further amended to read: 
§3050. Delivery of notice 
He 
'A notice of cancellation of a policy saall Be is not 
effective unless received by the named insured at least 20 days 
prior 
to 
the effective date of 
cancellation, 
or, 
when 
the 
cancellation is for nonpayment of premium, at least 10 days prior 
to 
the 
effective 
date 
of 
cancellation. 
A 
postal 
service 
certificate of mailing to the named insured at the insured's last 
known address saall 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 ssa!! 
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. 
Notwithstanding 
sections 
3049 
and 
3051, 
a 
notice 
of 
nonrenewal is not reguired if a policyholder is notified by the 
insurer that the policy is being transferred to an affiliate of 
that insurer for future coverage. 
SUMMARY 
This bill amends uninsured vehicle coverage requirements to 
clarify that an insurance policy may define the scope of coverage 
of the policy. 
This legislation is required as 
a result of 
Butterfield v. Norfolk and Dedham Mutual Fire Insurance Company, 
2004 ME 124 and adopts the position of the dissenting opinion in 
that case. 
This bill also clarifies that. a transfer of a policy from an 
insurer to an affiliate, with notice, is not a cancellation or a 
nonrenewal of the policy since coverage is in fact being renewed.