An Act To Provide Fair Hearings in Health Insurance Rate Proceedings
Maine Legislature, Session 121, LD 1181
Committee: Insurance and Financial Services
Sponsors: TREAT, KANE, BROMLEY, DOUGLASS, ROTUNDO, DUPLESSIE, PIOITI
Amends: 24-A MRSA §235-A, 24-A MRSA §2736, 24-A MRSA §4222-B

Legislative Document 
No. 1181 
S.P.385 
In Senate, March 5, 2003 
An Act To Provide Fair Hearings in Health Insurance Rate 
Proceedings 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator TREAT of Kennebec. 
Cosponsored by Representative KANE of Saco and 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: BROMLEY of Cumberland, DOUGLASS of Androscoggin, ROTUNDO of 
Androscoggin, Representatives: DUPLESSIE of Westbrook, PIOITI of Unity. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec.!. 24-A MRSA §235-A is enacted to read: 
§235-A. 
Rate hearings 
A rate hearing must be conducted with respect to all filings 
of rates, rating formulas and modifications for health insurance 
policies offered by a carrier in this State in accordance with 
the requirements of this section. 
1. 
Criteria for rate hearings. 
In any filing of rates, 
rating formulas and modifications for health insurance policies 
when the requested rates or modifications exceed the Consumer 
Price Index by 100q.o or more, 
a rate hearing must be conducted 
pursuant to subsection 2. 
2. 
Hearings. 
A hearing conducted with respect to rate 
filings must be held in the manner Qrovided for in Title 5, 
chaQter 
375, 
subchaQter 
and meet 
the 
requirements 
in this 
subsection. 
A. 
The 
hearing 
must 
be 
conducted 
by 
an 
impartial 
administrative hearing officer other than the sUQerintendent 
or an emQloyee of the bureau. 
The hearing officer must have 
sufficient 
qualifications 
in 
education 
and 
Qrofessional 
eXQerience and training to Qreside over adjudicatory and 
administrative hearings. 
B. 
Actuarial staff from the bureau shall Qrovide a written 
analysis and reQort to the administrative hearing officer 
that includes at least the following: 
(1) 
An opinion as to whether the rates reguested by 
the carrier are reasonable r~Jative to the benefits and 
coverage offered; 
(2) 
Information regarding the impact of the regues ted 
rates on affordability for policyholders by age group; 
and 
(3) 
Identification of any coverage or benefit changes 
that have occurred during the 2-year Qeriod preceding 
the date of the rate request that would reduce the 
risks or costs to the carrier. 
C. 
A report submitted pursuant to paragraph B is a public 
record as defined in Title 1, section 402, subsection 3 and 
must be Qrovided to any advocacy Qanel under subsection 3 
involved in a rate hearing at least 40 days Qrior to the 
hearing and to the public no later than 30 days prior to the 
hearing. 
D. 
Notwithstanding the requirements for filing in paragraph 
C, 
if a 
hearing officer determines 
the report provided 
pursuant to paragraph B does not sufficiently address the 
information required to be provided in that report, 
the 
hearing officer may allow an extension of time for actuarial 
staff to provide additional information in the report. 
E. 
The carrier has 
the burden to prove that the rates 
requested 
are 
reasonable 
relative 
to 
the 
benefits 
and 
coverage offered. 
F. 
A hearing officer shall make a recommended decision to 
the superintendent after the hearing. 
The superintendent 
may 
accept 
the 
decision, 
accept 
the 
decision 
with 
modifications or reject the decision 
recommended 
by the 
hearing officer. 
The superintendent shall notify each party 
to the hearing of the superintendent's decision and notify 
each party of the party's right to review or appeal of the 
decision. 
3. 
Adyocacy Panel. 
When 
a 
rate 
hearing is 
required 
pursuant to subsection 1, the bureau shall impanel an advocacy 
panel to represent the interests of consumers and the public. 
The bureau may contract for the services of an advocacy panel if 
existing staff 
resources 
are 
not 
adequate 
to 
represent 
the 
interests of consumers and the public. 
The carrier making the 
rate filing shall pay the cost of participation of the advocacy 
panel. 
4. 
Rules. 
The bureau, after notice and hearing, may adopt 
rules to implement this section. 
Rules adopted pursuant to this 
section are 
routine technical 
rules 
as 
defined in Title 
5, 
chapter 375, subchapter 2-A. 
Sec. 2. 24-A MRSA §2736, sub-§2, as amended by PL 1997, c. 
344, §8, is further amended to read: 
2. 
Filing; information. 
When a filing is not accompanied 
by the information upon which the insurer supports such filing, 
or the superintendent does not have sufficient information to 
determine whether such filing meets the requirements that rates 
not 
be 
eHeessive 
unreasonable 
relative 
to 
the benefits 
and 
coverage 
offered, 
inadequate 
or 
unfairly discriminatory, 
the 
superintendent 
shall 
require 
the 
insurer 
to 
furnish 
the 
information upon which it supports the filing. 
A filing and 
supporting information are public records within the meaning of 
Title 1, 
section 402, 
subsection 
and 
become 
part of 
the 
official record of any hearing held pursuant to section 2736-A. 
Sec. 3. 24·A MRSA §2736. sub·§3. as amended by PL 
2001, c. 
432, §5, is further amended to read: 
3. 
Criteria for special rate hearings. 
Aay Notwithstanding 
the reguirements of section 235-A, 
any filing of rates, rating 
formulas and modifications for Medicare supplement contracts as 
defined in chapter 67 and for individual health plans as defined 
in section 2736-C, subsection 1, paragraph C that satisfies the 
criteria 
set 
forth 
in 
this 
subsection 
is 
subject 
to 
the 
provisions of subsection 4. 
Sec. 4. 24·A MRSA §2736. sub·§4, ~C, as enacted by PL 1997, c. 
344, §8, is amended to read: 
C. 
In any hearing conducted under this subsection, 
the 
Bureau of Insurance and any party asserting that the rates 
are 
eHeessive 
unreasonable 
relative to 
the benefits 
and 
coverage offered have the burden of establishing that the 
rates are eHeessive unreasonable relative to the benefits 
and coverage offered. 
The burden of proving that rates are 
adequate and not unfairly discriminatory remains with the 
insurer. 
Sec. 5. 24·A MRSA §2736·A, as repealed and replaced by PL 
1979, c. 558, §8, is amended to read: 
§2736-A. 
Hearing 
If at any time the superintendent has reason to believe that 
a filing does not meet the requirements that rates sRa;!,;!, not be 
eHeessive 
unreasonable 
relative to the benefits 
and 
coverage 
offered, inadequate or unfairly discriminatory or that the filing 
violates 
any 
of 
the 
provisions 
of 
chapter 
23, 
Re 
the 
superintendent shall cause a hearing to be held. 
Hearings held under this section sRa;!,;!, must conform to the 
procedural requirements set forth in 
tRe-~~-ABffi~R~6£Fa~ive 
PFeeee.'I:;l.-£€--Aetr Title 5, 
chapter 375, 
subchapter IV 
and the 
reguirements of section 235-A. 
Sec. 6. 24·A MRSA §2839. as amended by PL 1985, c. 648, §1l, 
is further amended to read: 
§2839. 
Rates filed; rate hearings 
No policy of group health insurance may be delivered in this 
State until a 
copy of the group manual rates to be used In 
calculating the premium for these policies has been filed 
Ee~ 
iaEe~ma-t.-ieRa.,l--fHu:·~eses with the superintendent. Notwithstanding 
this section. rates for group Medicare supplement. nursing home 
care or long-term care insurance contracts must be filed in 
accordance with section 2736. 
A hearing must be conducted if the 
requirements of section 235-A are met. 
Sec. 7. 24-A MRSA §4222-B. sub-§21 is enacted to read: 
21. 
Sections 235-A, 2736 and 2839, relating to rate filings 
and hearings, apply to health maintenance organizations. 
SUMMARY 
This bill requires that a hearing be held before proposed 
changes in health insurance rates that exceed the Consumer Price 
Index by 100% or more are approved. 
It also changes the standard 
of review from whether the rates are excessive to whether the 
rates are unreasonable relative to the benefits and coverage 
offered. 
The bill requires that the hearing be held before an 
impartial administrative hearing officer who is not employed by 
the Department of Professional and Financial Regulation. Bureau 
of Insurance. 
The bill also requires that actuarial staff at the 
Bureau of Insurance prepare a report for use in the hearing. 
The 
bill 
applies 
to 
both 
individual 
insurance 
policies 
and 
to 
all 
carriers. 
maintenance organizations. 
and 
group 
including 
health 
health