PUBLIC LAWS
First Special Session of the 122nd

CHAPTER 114
S.P. 167 - L.D. 541

An Act To Amend the Laws Related to Cancellation and Nonrenewal of Insurance

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 24-A MRSA §2912, sub-§2, as amended by PL 1977, c. 403, §1, is further amended to read:

     2. Renewal or renew. "Renewal" or "to renew" means the issuance and delivery by an 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 renewal policy, other than a replacement policy for an unfinished term, with a term of one year or less shall be is considered written, for the purposes of this subchapter, for 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 shall be is considered written for successive policy terms of one year.

     Sec. 2. 24-A MRSA §2915, as amended by PL 1989, c. 172, §4, is further amended to read:

§2915. Delivery of notice

     No A notice of cancellation of a policy shall 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. 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 be is conclusive proof of receipt on the 5th calendar day after mailing.

     Except for a policy which 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 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 policy that are less favorable to the insured.

     Sec. 3. 24-A MRSA §3007, sub-§1, ¶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. For purposes of this section, the transfer of a policy from an insurer to an affiliate is considered a policy renewal.

     Sec. 4. 24-A MRSA §3007, sub-§5, ¶B, as enacted by PL 1985, c. 671, §2, is amended to read:

B. Nonrenewal subject to this section shall is not be effective prior to 30 days after receipt of notice written by the insured. 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. 5. 24-A MRSA §3050, as amended by PL 1989, c. 172, §7, is further amended to read:

§3050. Delivery of notice

     No A notice of cancellation of a policy shall 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 shall be is conclusive proof of receipt on the 5th calendar day after mailing.

     Except for a policy which 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 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. 6. 24-A MRSA §3051, sub-§1, as amended by PL 2003, c. 671, Pt. A, §8, is further amended to read:

     1. If the insurer has manifested its willingness to renew; or

     Sec. 7. 24-A MRSA §3051, sub-§2, as enacted by PL 1973, c. 239, is amended to read:

     2. If the insured fails to pay any premium due or any advance premium required by the insurer for renewal.; or

     Sec. 8. 24-A MRSA §3051, sub-§3 is enacted to read:

     3. If the insured has transferred a policy to an affiliate.

Effective September 17, 2005.

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