OFFICE OF THE INSURANCE COMMISSIONER
MARYLAND INSURANCE ADMINISTRATION
ADMINISTRATION, ex rel
G.R.M. AND M.M.M.
v. Case No. MIA-2009-08-020
* * *
MEMORANDUM AND ORDER
Pursuant to § 27- 613(d) of the Insurance Article of the Annotated Code of Maryland, the
Maryland Insurance Commissioner finds that GEICO Indemnity Insurance Company (GEICO)
provided Complainants with proper notice of cancellation.'
STATEMENT OF THE CASE
Complainants, G.R.M. and M.M.M. (Mr. and Mrs. M.), filed a complaint with the
Maryland Insurance Administration ("MIA") received on April 6, 2009 asserting that GEICO
had erred in the cancellation of their automobile policy for non-payment of premium. (MIA Ex.
1.) The MIA conducted an investigation and in a decision dated July 1, 2009, the MIA found
that GEICO did not violate Maryland law in its handling of the cancellation. (MIA Exs. 2-6.)
Complainants filed an appeal on July 22, 2009. (MIA Ex. 7.)
This case is governed by the contested case provision of the Administrative Procedure
Act, the hearing provisions of Maryland's insurance law, and the procedural rules for MIA
Unless otherwise indicated, all references are to the Insurance Article of the Annotated Code of Maryland.
hearings. Ma CODE ANN., STATE Gov'T ART., §§ 10-201 — 10-226; MD. CODE ANN., INS. ART.,
§§ 2-21-, 2-213; COMAR 31.02.01.
The issue in this case iss whether GEICO violated § 27-613 when it cancelled
Complainants' automobile insurance policy for nonpayment of premiums.
SUMMARY OF THE EVIDENCE
A hearing was held at the MIA on March 8, 2010. Complainants were represented by
Anne M. Miller, Esq. GEICO was represented by Timothy B. Mullen, Esq.
The witnesses were, Alice May Hinkle, GEICO Underwriting Specialist and
Complainant, Mrs. M. Mr. M. was unable to attend the hearing because he was out of town on
business. (T. 34.)
MIA Exhibits (Pre-marked)
1 Complaint letter from Complainant's counsel to MIA dated 04/03/09
2 Letter from MIA to GEICO dated 04/15/09
3 Letter and Document Packet from GEICO received on 05/05/09
4 Letter from MIA to GEICO dated 05/26/09
5 Letter and Document Packet from GEICO to MIA received on 06/08/09
6 Letter from MIA to Complainants counsel dated 07/01/09
7 Letter from Complainants counsel to MIA dated 06/22/09
8 Letter from MIA to Complainants counsel and GEICO dated 08/10/09
Hearing Officer Exhibits (Pre-marked)
1 Notice of Hearing dated 08/19/09
2 Facsimile letter received on 10/08/09 from Anne M. Miller, Esq.
3 Letter to parties dated 10/14/09 granting postponement
4 Letter received 10/19/09 from Timothy B. Mullen, Esq. filing Entry of Appearance
5 Letter to parties dated 11/05/09 requesting hearing date
6 Notice of Hearing dated 11/09/09
7 Subpoena to Timothy B. Mullen, Esq. dated 12/01/09 from Anne M. Miller, Esq.
8 Letter from MIA dated 01/27/10 to parties regarding postponement
9 Notice of Hearing dated 02/24/10
1 Notice of Cancellation for Nonpayment of Premium dated 12/29/08
2 Certificate of Mailing dated 12/29/09
3 GEICO Courtesy Renewal Reminder dated 11/10/08
4 GEICO Bill dated 12/10/08
1 Letter from GEICO to Complainants dated 01/21/09 denying claim
FINDING OF FACT
These findings of fact are based upon the testimony provided at the hearing and upon a
complete and thorough review of the transcript and all exhibits and documentation provided by
the parties. To the extent that there are any facts in dispute, the following facts are found, by a
preponderance of the evidence, to be true. Citations to particular parts of the record are for ease
of reference and are not intended to exclude and do not exclude reliance on the entire record.
On October 6, 2008, Complainants purchase GEICO automobile insurance policy no.
4126-96-75-06 from the period of November 28, 2008 through May 28, 2009. (MIA Ex. 1.)
Complainants received an initial bill with a due date of November 28, 2008 with a payment due
of $625.95. (MIA Ex. 3.) The bill listed a Payment Schedule that states,
Nov-28-08 $ 625.95
Dec-28-08 $ 625.95
Jan-28-09 $ 625.95
Feb-28-09 $ 625.95
On November 10, 2008, GEICO issued a Renewal Reminder for the November 28, 2008
payment. (MIA Ex. 3.) GEICO received payment from Complainants on November 29, 2008.
(MIA Exs. 1, 3.)
GEICO issued its next bill dated December 10, 2008 also in the amount of $625.95 with a
due date of December 28, 2009. (GEICO Ex. 3; MIA Ex. 3.) On December 29, 2008, GEICO
issued a Notice of Cancellation for Nonpayment of Premium. Id. The Notice states, "As of
12:01 local time Jan-13-09 your policy will cancel due to nonpayment of your premium. Keep
your policy active by submitting a payment of the past-due amount of $625.95 prior to the
cancellation effective date." (GEICO Ex. 1; MIA Ex. 3.) GEICO has evidence of a certificate of
mailing to Complainants at their correct address dated December 29, 2008 from the United
States Postal Service in Glen Allen, Virginia. (GEICO Ex. 2; MIA Ex. 3.) Plaintiff stipulates
that GEICO sent the notice in a timely fashion. (T. 8-10.)
Complainants did not make their December 28, 2008 payment and their policy lapsed on
January 13, 2009 as noted in the Notice of Cancellation. (Complainant's Ex. 1.) Subsequently,
on January 19, 2009, Mrs. M. was involved in a motor vehicle accident and she contacted
GEICO to make a claim. (MIA Ex. 1.) GEICO denied the claim because Complainant's
insurance coverage was not in effect at the time of the accident. (Complainant's Ex. 1.)
Section 27-613(d) states that, "[alt least 10 days before the date an insurer proposes to
cancel a policy for nonpayment of premium, the insurer shall send to the insured, by certificate
of mail, a written notice of intention to cancel for nonpayment of premium." (Emphasis added.)
In the complaint filed with the MIA, Complainants contended that, "GEICO did not provide
written notice to their insured that they proposed to cancel their policy for nonpayment of
premium pursuant to MD Insurance Art. §27-613(d)." (MIA Ex. 1.) However, during the
hearing Complainants stipulated that GEICO did mail a timely written notice to Complainants
regarding the proposed cancellation of their policy for nonpayment of premium. (GEICO Ex. 1,
2; T. 8-10.) Furthermore, there is no dispute that Complainants did not pay the premium due and
owing on January 13, 2009 in a timely manner. (T. 36.)
The issue in this case is limited to whether the insurer complied with § 27-613(d) of the
Insurance Article when it cancelled Complainants policy for nonpayment of premium.
Complainants argue that evidence of mailing the required notice, which is present and stipulated
to in the instant case, creates a presumption of delivery, which can be rebutted by evidence that
delivery did not occur. (T. 46-48.) Complainants rely on the case of Rockwood Casualty
Insurance Co. v. Uninsured Employers' Fund, 385 Md. 99 (2005) to support their position. (T.
45-46.) The Rockwood case involved cancellation of a worker's compensation policy and an
interpretation of a statutory provision that required an insurer to serve the employer with notice
of cancelation either by personal service or by certified mail. 385 Md. at 109.
The statute at issue in Rockwood, § 19-406, and § 27-613(d) have an important
difference; one that was highlighted by the Rockwood court. Section 19-406,
requires the insurer to serve the employer with notice and gives the insurer two ways to
accomplish service: personal service or service by certified mail...The term implies
actual receipt. If the Legislature intended some lesser standard, it could have just
required the insurer to send or mail the notice to the employer by regular mail
Id. (Emphasis in the original.) In § 27-613(d), the Legislature did intend "some lesser standard "
The insurance company, is required only to send the cancellation notice. See, Centre Insurance
Company v. J.T. W., 397 Md. 71, 83-84 (2007). The Maryland Court of Appeals has held that an
insurer has met its obligation under Title 27 of the Insurance Article to notify an insurer of
cancellation by mailing of the notice to the insured's address. Anderson v. General Casualty
Insurance Co., 402 Md. 236, 246 (2007). There is no dispute that GEICO did meet its statutory
obligation of mailing as required by § 27-613(d).
Even if the statute requires evidence of delivery (which it does not), the record in this
case is devoid of sufficient or credible evidence that Complainants did not receive the
cancellation notice. While Mrs. M. testified that Complainants did not receive the notice of
cancellation, she conceded that she does not handle the bills and was unaware of when the
payments were due. (T. 35-36, 38.) She also testified that because of Mr. M.'s work he was
often gone from the home for weeks at a time. (T. 36.) Mrs. M. did provide some testimony
about mail delivery issues in their neighborhood. (T. 33, 39-40.) However, that testimony was
vague and must be balanced against the Complainants' history of late payment, which led to
prior cancellations of their policy. (T. 15-17.) There is not sufficient evidence in the record to
conclude that delivery did not occur in this case.
CONCLUSION OF LAW.
The record in this case supports a finding that GEICO complied with the provisions of §
27-613(d) when it cancelled Complainants automobile insurance policy for failure to pay
It is therefore ORDERED this 31 51 day of March, 2010, that the decision of the Maryland
Insurance Administration is hereby AFFIRMED
Signature on file with original
REN STA r HORNIG