An Act To Clarify and Update the Laws Related to Property and Casualty Insurance
Maine Legislature, Session 123, LD 1502
Committee: Insurance and Financial Services
Sponsors: PRIEST, SNOWE-MELLO, CANAVAN, RICHARDSON, SAVAGE
Amends: 24-A MRSA §2303, 24-A MRSA §2304-A, 24-A MRSA §2908, 24-A MRSA §2912, 24-A MRSA §291, 24-A MRSA §2916-A, 24-A MRSA §3007, 24-A MRSA §3050, 24-A MRSA §3051

Legislative Document 
No. 1502 
H.P.1052 
House of Representatives, March 19,2007 
An Act To Clarify and Update the Laws Related to Property and 
Casualty Insurance 
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
7Y/~/J7.~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative PRIEST of Brunswick. 
Cosponsored by Senator SNOWE-MELLO of Androscoggin and 
Representatives: CANAVAN of Waterville, RICHARDSON of Warren, SAVAGE of 
Falmouth. 
Printed on rrcyded paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2303, sub-§3-A, as enacted by PL 1989, c. 797, §6 and 
affected by §§37 and 38, is repealed. 
PARTB 
Sec. B-1. 24-A MRSA §2304-A, sub-§l, as amended by PL 2003, c. 671, Pt. A, 
§ 1, is further amended to read: 
1. 
Every insurer shall file with the superintendent, except as to inland marine risks, 
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 that it 
proposes to use. The filing must state the effective date of the filing and indicate the 
character and extent of the coverage contemplated. The filing must be made not less than 
days in advance of the stated effective date unless that 30-day requirement is waived 
by the superintendent. The effective date may be suspended by the superintendent for a 
period of time not to exceed 60 days, except that the effective date for filings made 
electronically may not be suspended. Filings made electronically must be acted on no 
later than 30 days from receipt unless an extension is requested by the filer. 
PART C 
Sec. C-1. 24-A MRS A §2908, sub-§l, ~E, as enacted by PL 1985, c. 671, §1, is 
amended to read: 
E. 
"Renewal" or "to renew" means the issuance of, or the offer to issue by an 
insurer, a policy succeeding a policy previously issued and delivered by the same 
insurer or an affiliate ofthe insurer or the issuance of a certificate or notice extending 
the terms of an existing policy for a specified period beyond its expiration date. For 
the purposes of this section, the transfer of a policy from an insurer to an affiliate is 
considered a policy renewal. 
Sec. C-2. 24-A MRSA §2908, sub-§5, ~ 
is enacted to read: 
D. 
For policies providing automobile physical damage coverage, like notice of 
cancellation or nonrenewal must also be given to any party named in a loss payable 
clause. 
Sec. C-3. 24-A MRSA §2912, sub-§l, as enacted by PL 1973, c. 339, § 1, is 
amended to read: 
1. Policy. "Policy" means an automobile insurance policy providing bodily injury 
liability, property damage liability, medical payments, uninsured motorist coverage, 
physical damage coverage, or any combination thereof, delivery delivered or issued for 
delivery in this State, insuring a single individual or one or more related individuals 
resident in the same household, as named insured and insuring vehicles of the following 
types only: 
A. 
Motor vehicles of the private passenger or station wagon type whieh that are not 
used as public conveyances nor rented to others; and 
B. 
Any other 4-wheel motor vehicles with a load capacity of 1,500 pounds or less 
whieh that are not used in the business or professions of the insured. 
Sec. C-4. 24-A MRSA §2912, sub-§2, as amended by PL 2005, c. 114, §1, is 
further amended to read: 
2. Renewal or renew. "Renewal" or "to renew" means the issuance and delivery by 
lOan insurer of a policy replacing at the end of the previous policy term a policy previously 
issued and delivered by the same insurer, or the issuance and delivery of a certificate or 
notice extending the coverage of the policy beyond its original term. Any rene'Nal policy 
\'lith a term of one year or less, other than a replacement policy for an unfinished term, 
with a term of one year or less is considered written, for the purposes of this 
subchapter,fur a term of one year. For purposes of this subchapter, the transfer of a 
policy from an insurer to an affiliate is considered a policy renewal. 
Any policy written for a term longer than one year or with no fixed expiration date is 
considered written for successive policy terms of one year for the purposes of this 
subchapter. 
Sec. C-S. 24-A MRSA §291S, as amended by PL 2005, c. 114, §2, is further 
amended to read: 
§2915. Delivery of notice 
A notice of cancellation of a policy 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-aH provides automobile physical damage peHsy 
coverage, like notice of cancellation must also be given to any other person lli!!1Y 
mentioned in the loss payable clause. A postal service certificate of mailing to the named 
insured at the insured's last known address is conclusive proof of receipt on the 5th 
calendar day after mailing. 
Except for a policy 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 must 
accompany the notice, together with a notice of the right to apply for a hearing before the 
Superintendent of Insurance superintendent within 30 days, as provided in section 2920. 
Prior to the date of renewal of a policy that has been transferred by an insurer to an 
affiliate, the insured must receive notice of any changes to the terms of the polic)' that are 
less fa"orable to the insured. 
Sec. C-6. 24-A MRSA §2916-A, first~, as enacted by PL 1979, c. 336, §1, is 
amended to read: 
Ne A notice of nonrenewa1 shall may not be issued, unless it is based upon a reason 
for which the policy could have been cancelled or unless it is based upon one or more of 
the following grounds whieh that occurred during the 36-month period preceding the 
yearly anniversary date of the policy. A nonrenewal is effective only on the policy's 
yearly anniversary date. 
Sec. C-7. 24-A MRS A §2917, as amended by PL 1979, c. 347, §§5 and 6, is 
further amended to read: 
§2917. Notice of intent 
Ne An insurer shall 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 shall ~ not Be effective 
unless received by the named insured at least 30 days prior to the expiration date of the 
policy. 
In the event the policy provides automobile physical damage coverage, like 
notice of intention not to renew must be given to any party named in the loss payable 
clause. A post office post office department certificate of mailing to the named insured at 
his the insured's last known address shall be ~ conclusive proof of receipt on the 3rd 
calendar day after mailing. 
The reason or reasons for the intended nonrenewal action shall must accompany the 
notice of intent not to renew and the reason or reasons shall must be explicit. 
Explanations such as "underwriting reasons," "underwriting experience," "loss record," 
"driving experience," "credit report," and similar insurance terms are not by themselves 
acceptable explanations of an insurer's intended nonrenewal of an automobile insurance 
policy. A notice of a right to apply for a hearing before the Superintendent of Insurance 
superintendent within 30 days as provided herein shall in this section must accompany 
the notice of intent not to renew. 
This section shall does not apply: 
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.,.~ 
3. If the insurer has transferred a policy to an affiliate. Prior to the date of renewal of 
a policy that has been transferred by an insurer to an affiliate, the insured must receive 
notice of any changes to the terms of the policy that are less favorable to the insured. 
Sec. C-S. 24-A MRSA §3007, suh-§S, as amended by PL 1991, c. 25, §2, is 
further amended to read: 
8. 
This netiee section does not apply to any insurance policy that has not been 
previously renewed if the policy has been in effect less than 60 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 msunmce Cancellation Control Act, subchapter ¥ 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, in the superintendent's discretion, its application will endanger the ability of the 
insurer to fulfill its contractual obligation. 
Sec. C-9. 24-A MRS A §3049, sub-§l, as amended by PL 1979, c. 347, §8, is 
further amended to read: 
1. 
Nonpayment of premium, including nonpayment of any additional premiums, 
calculated in accordance with the current rating manuel manual of the insurer, justified by 
a physical change in the insured property or a change in its occupancy or use. We A 
notice of cancellation for nonpayment of premium shall be is not effective unless deemed 
received under section 3050 after the premium due date; 
Sec. C-IO. 24-A MRSA §3050, as amended by PL 2005, c. 114, §5, is further 
amended to read: 
§30S0. Delivery of notice 
A notice of cancellation of a policy 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. Like notice must also be given to any party named as mortgagee on the 
~ 
A postal service certificate of mailing to the named insured at the insured's last 
known address is conclusive proof of receipt on the 5th calendar day after mailing. 
Except for a policy that has been in effect for less than W 90 days at the time notice 
of cancellation is received by the named insured, the reason for cancellation must 
accompany the notice, together with a notice of the right to apply for a hearing before the 
Superintendent of Insurance superintendent within 30 days, as provided in section 3054. 
Prior to the date of renewal of a policy that has been transferred by an insurer to an 
affiliate, the insured must receive notice of any changes to the terms of the policy that are 
less favorable to the insured. 
Sec. C-l1. 24-A MRSA §3051, as amended by PL 2005, c. 114, §§6 to 8, is 
further amended to read: 
§30S1. Notice of intent 
An insurer 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 is not effective unless received by 
the named insured at least 30 days prior to the expiration date of the policy. Like notice 
must also be given to any party named as mortgagee on the policy. 
A post office 
certificate of mailing to the named insured at the insured's last known address is 
conclusive proof of receipt on the 3rd calendar day after mailing. The reason 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 superintendent within 30 days 
as provided. 
The reason or reasons for the intended nonrenewal action must accompany the notice 
of intent not to renew and the reason or reasons must 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 must be a good faith reason and related to the 
insurability of the property or a ground for cancellation pursuant to section 3049. 
This section does not apply: 
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; or 
3. 
If the insured insurer has transferred a policy to an affiliate. 
Prior to the date of renewal of a policy that has been transferred by an insurer to an 
affiliate, the insured must receive notice of any changes to the terms of the policy that are 
less favorable to the insured. 
SUMMARY 
Part A corrects a redundancy made by prior revisions to the rate-making law. 
Part B amends the rate-filing law to require the Department of Professional and 
Financial Regulation, Bureau of Insurance to act on electronic filings within 30 days. 
Part C makes a variety of changes to the cancellation statutes. 
It amends the 
definition of "renewal" in the casualty insurance laws by adding language concerning 
affiliates that the Legislature added to the property insurance law in 2005. It adds to the 
laws governing cancellation of commercial policies covering physical damage the Maine 
Automobile Insurance Cancellation Control Act's requirement that the loss payee receive 
notice of cancellation or nonrenewal. 
It amends the Maine Automobile Insurance 
Cancellation Control Act to correct a typographical error in the definition of "policy" and 
to improve clarity by moving affiliate language from the statute governing cancellation to 
the statute governing notice of intent not to renew. Part C also corrects technical errors in 
the property insurance law. 
It also amends laws governing property insurance 
cancellation control to be consistent in excepting policies that have been in effect for less 
than 90 days, to add to personal policies the requirement that a mortgagee receive notice 
of cancellation, to move a provision concerning affiliate renewal from the statute 
governing delivery of cancellation notice to the statute governing notice of intention not 
to renew.