An Act To Protect the Insurable Interest of Homeowners in Multifamily Residences (AFTER DEADLINE)
Maine Legislature, Session 130, LD 1661
Committee: Health Coverage, Insurance and Financial Services
Sponsors: PERRY
Amends: 24-A MRSA §3049-A, 24-A MRSA §3050

Legislative Document
No. 1661
H.P. 1232
House of Representatives, May 5, 2021
An Act To Protect the Insurable Interest of Homeowners in 
Multifamily Residences
(AFTER DEADLINE)
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205.
Received by the Clerk of the House on May 3, 2021.  Referred to the Committee on Health 
Coverage, Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed 
pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative PERRY of Bangor.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  24-A MRSA §3049-A is enacted to read:
§3049-A.  Notification prior to cancellation, termination or lapse
1.  Notice to 3rd party.  A policy of insurance, described in section 3048, subsection 
covering a multifamily residence that is owner-occupied, that is held by a natural person 
and that has been in force for at least 90 days may not be terminated for nonpayment of 
premium unless the insurer has mailed a notice of cancellation required by section 3050 to 
all other natural persons residing within or with an ownership interest in the multifamily 
residence, referred to in this subchapter as "a necessary 3rd party."  For purposes of this 
section, "multifamily residence" includes a duplex, an apartment building or a 
condominium.  The bureau shall adopt rules to implement the notice requirements under 
this subsection.
2.  Restrictions on cancellation, termination or lapse.  Notwithstanding any 
provision of this subchapter to the contrary, an insurer shall provide restrictions on the 
cancellation, termination or lapse of policies described in subsection 1 in accordance with 
this subsection to reduce the danger that a necessary 3rd party will assume the risk of 
covering loss of or damage to a multifamily residence when a policyholder loses coverage.  
Within 90 days after cancellation, termination or lapse of coverage due to nonpayment of 
premium, a policyholder or a necessary 3rd party may request reinstatement of the policy 
on the basis of an ownership interest in the multifamily residence.  A policy reinstated 
pursuant to this subsection must cover any loss, damage or claim occurring from the date 
of the termination, cancellation or lapse and must be issued without any evidence of 
insurability.  Within 15 days after request from an insurer, a policyholder of a policy 
reinstated pursuant to this subsection or a necessary 3rd party shall pay any unpaid premium 
from the date of the last premium payment at the rate that would have been in effect had 
the policy remained in force.  If the premium is not paid as required, the policy may not be 
reinstated and the insurer is not responsible for claims incurred after the initial date of 
cancellation, termination or lapse of coverage.  If an insurer denies a request for 
reinstatement, the insurer shall notify the policyholder and any necessary 3rd party that the 
policyholder and any necessary 3rd party may request a hearing before the superintendent 
pursuant to section 3054.
3.  Rulemaking.  The bureau may adopt rules to implement the requirements of this 
section.  The rules adopted pursuant to this subsection are routine technical rules as defined 
in Title 5, chapter 375, subchapter 2-A.
Sec. 2.  24-A MRSA §3050, first ¶, as amended by PL 2007, c. 188, Pt. C, §10, is 
further amended to read:
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 policy and to any 
necessary 3rd party under section 3049-A.  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.
SUMMARY
This bill requires insurers to provide notice to individuals residing within or with an 
ownership interest in a multifamily residence in which a policyholder also resides or has 
an ownership interest prior to the lapse, cancellation or termination of the policyholder's 
property insurance policy.  The bill allows those individuals to reinstate the policyholder's 
policy to protect against loss of or damage to their multifamily residence and requires the 
Department of Professional and Financial Regulation, Bureau of Insurance to adopt routine 
technical rules.