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This proceeding arose upon a request for hearing made by Bruce Farnham to contest the pending nonrenewal of homeowners insurance coverage provided by Teachers Insurance Company. On June 10, 2003, the insurer mailed a notice of nonrenewal effective August 1, 2003 on policy number 18 000083134, citing “increase in hazard due to chimney leaning and missing some mortar. Back side of dwelling has severely peeling paint” as the grounds for nonrenewal. Pursuant to 24-A M.R.S.A. §§ 3051 and 3054, Teachers Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on July 22, 2003 with Mary Ellen Albert sitting as designated hearing officer, pursuant to 24-A M.R.S.A. §§ 210 and 3054. The purpose of the hearing was limited to establishing the existence of the proof or evidence given by the insurer to support its reason for policy nonrenewal. Staff representing Teachers Insurance Company submitted a sworn statement in lieu of appearing at the hearing. Bruce Farnham represented himself at the hearing.

FINDINGS OF FACT
The following facts have been proven by a preponderance of evidence submitted:

1. Teachers Insurance Company has insured the subject property for approximately 15 years.
2. An on-site inspection was completed on March 11, 2003.

ANALYSIS AND CONCLUSION OF LAW

Title 24-A M.R.S.A. § 3051 states that the reason for nonrenewal must be a good faith reason rationally related to the insurability of the property, and 24-A M.R.S.A. § 3054 requires the insurer to establish the proof or evidence of its reason for nonrenewal.

Dawn Fry, Policyholder Compliance Services Administrator I, stated in her affidavit that the inspector who conducted the inspection on March 11, 2003 stated that the chimney was leaning and needed tuck-pointing and the backside of the home had badly peeling paint. She also indicated that the home was underinsured. A review of the inspection report was conducted on May 21, 2003 and the company advised their agent that action would be taken on this policy based on the listed adverse conditions. Ms. Fry also stated that if repairs were made by the renewal date, Teachers would continue the insurance and increase the value on the dwelling.

Mr. Farnham testified that he is in the process of siding the home and only has one small section that is not completed. He further stated that he felt he had not been given enough time to complete repairs from the time he received the notice before the nonrenewal date. Mr. Farnham testified that he has spoken with a contractor concerning the repair to the chimney and has received a quote for the repairs.

Ms. Fry failed to submit any evidence supporting the decision to nonrenew Mr. Farnham’s policy. She refers to the inspection report in her affidavit. However, the company did not submit the inspection report or any photos as evidence.

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 3054. Teachers Insurance Company bears the burden of proof for establishing that the statutory grounds for policy nonrenewal exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that Teachers Insurance Company has not established adequate grounds for policy nonrenewal.

INDEX OF RECORD:
Exhibit 1 - request for hearing
Exhibit 2 - copy of notice
Exhibit 3 - sworn affidavit of Dawn Fry

ORDER AND NOTICE OF APPEAL RIGHTS

The intended nonrenewal is hereby not approved. Teachers Insurance Company is directed to renew policy # 18-000083134 on the same terms as the expiring policy.

This Decision and Order is a final agency action within the meaning of the Maine Administrative Procedure Act. It is appealable to the Superior Court in the manner provided in 24-A M.R.S.A. § 236 and M.R. Civ. P. 80C. Any party to the hearing may initiate an appeal within 30 days after receipt of this notice. Any nonparty whose interests are substantially and directly affected may initiate an appeal within 40 days of the effective date of this Decision and Order.

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