An Act To Clarify and Update the Laws Related to Property and Casualty Insurance

PART A

Sec. A-1. 24-A MRSA §2303, sub-§3-A,  as enacted by PL 1989, c. 797, §6 and affected by §§37 and 38, is repealed.

PART B

Sec. B-1. 24-A MRSA §2304-A, sub-§1,  as amended by PL 2003, c. 671, Pt. A, §1, is further amended to read:

PART C

Sec. C-1. 24-A MRSA §2908, sub-§1, ¶E,  as enacted by PL 1985, c. 671, §1, is amended to read:

Sec. C-2. 24-A MRSA §2908, sub-§5, ¶D  is enacted to read:

Sec. C-3. 24-A MRSA §2912, sub-§1,  as enacted by PL 1973, c. 339, §1, is amended to read:

Sec. C-4. 24-A MRSA §2912, sub-§2,  as amended by PL 2005, c. 114, §1, is further amended to read:

Sec. C-5. 24-A MRSA §2915,  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 an provides automobile physical damage policy coverage, like notice of cancellation must also be given to any other person party 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 policy that are less favorable to the insured.

Sec. C-6. 24-A MRSA §2916-A, first ¶,  as enacted by PL 1979, c. 336, §1, is amended to read:

No A notice of nonrenewal 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 which 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 MRSA §2917,   as amended by PL 1979, c. 347, §§5 and 6, is further amended to read:

§ 2917. Notice of intent

No 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 is 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 is 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:

Sec. C-8. 24-A MRSA §3007, sub-§8,  as amended by PL 1991, c. 25, §2, is further amended to read:

Sec. C-9. 24-A MRSA §3049, sub-§1,  as amended by PL 1979, c. 347, §8, is further amended to read:

Sec. C-10. 24-A MRSA §3050,  as amended by PL 2005, c. 114, §5, is further amended to read:

§ 3050. 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 policy. 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 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-11. 24-A MRSA §3051,  as amended by PL 2005, c. 114, §§6 to 8, is further amended to read:

§ 3051. 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:

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.