An Act To Amend the Laws Relatinq to Property and Casualty Insurance and To Authorize the Superintendent of Insurance To Establish a Mandatory Market Assistance Program Further amend the bill by striking out everything after the enacting clause and before the summary and inserting in its place the following: PART A Sec. A-I. 24-A MRSA §2304-A, sub-§I, as repealed and replaced by PL 1991, c. 377, §10, is amended to read: 1. Every insurer shall file with the superintendent, except as to inland marine risksL which by general custom of the business are not written according to manual rates or rating plans, every manual rate, m~n~mum premium, class rate, rating schedule or rating plan and every other rating rule, and every modification of any of the foregoing wa~ea that it proposes to use. EveFy-saeli The filing must state the effective date of the filingT and indicate the character and extent of the coverage contemplated. EveFy-saea The filing must be made not less than 30 days in advance of the stated effective date unless that 3D-da.y requirement is waived by the superintendent. The effective date may be suspended by the superintendent for a period of time not to exceed 60 days, except that the effective date for filings made electronically may not be suspended. Page l-LR2725(2) COMMITTEE AMENDMENT
Maine Legislature, Session 121, LD 1853
Committee Amendment CA_A_S489 (Senate)
Amends: 24-A MRSA §2304-A, 24-A MRSA §2412, 24-A MRSA §3049, 24-A MRSA §3051, 24-A MRSA §2325-B

COMMITTEE AMENDMENT "A, to S.P. 692, L.D. 1853, 
Act To Amend the Laws Relating to Property Insurance" 
Bill, "An 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Amend the Laws Relatinq to Property and Casualty 
Insurance and To Authorize the Superintendent of Insurance To 
Establish a Mandatory Market Assistance Program' 
Further amend the bill by striking out everything after the 
enacting clause and before the summary and inserting in its place 
the following: 
'PART A 
Sec. A-I. 24-A MRSA §2304-A, sub-§I, as repealed and replaced 
by PL 1991, c. 377, §10, is amended to read: 
1. 
Every insurer shall file with the superintendent, except 
as 
to 
inland marine 
risksL 
which by general 
custom of 
the 
business are not written according to manual rates or rating 
plans, every manual rate, 
m~n~mum premium, 
class rate, rating 
schedule or rating plan and every other rating rule, and every 
modification of any of the foregoing 
wa~ea that it proposes to 
use. EveFy-saeli The filing must state the effective date of the 
filingT and indicate the character and extent of the coverage 
contemplated. EveFy-saea The filing must be made not less than 30 
days in advance of the stated effective date unless that 3D-da.y 
requirement is waived by the superintendent. 
The effective date 
may be suspended by the superintendent for a period of time not 
to exceed 60 days, except that the effective date for filings 
made electronically may not be suspended. 
Page l-LR2725(2) 
COMMITTEE AMENDMENT 
.~. 
~. 
COMMITTEE AMENDMENT ·A .. to S.P. 692, L.D. 1853 
Sec. A-2. 24-A MRSA §2412, sub-§2, as amended by PL 1973, c. 
585, §12, is further amended to read: 
2. 
Every s1:lea filing saall ~ 
be made not less than 30 
days in advance of any s1:lea delivery. At the expiration of s1:lea 
the 30 daysL the form so filed saall-se is deemed approved unless 
prior thereto it has been affirmatively approved or disapproved 
by order of the superintendent. Approval of aay-s1:lea the form by 
the superintendent 
saa11-~e*ls-t.4-t.1:lte constitutes a waiver of any 
unexpired portion of s1:lea the waiting period. The superintendent 
may extend by not more than an additional 30 days the period 
within which ae the superintendent may se affirmatively approve 
or disapprove any s1:lea form, by giving notice to the insurer of 
s1:lea ~ extension before expiration of the initial 
~G--Qays 
3~-day period, except that the effective date of a filing made 
electronically for a coverage under a health, life or annuity 
product may not be extended. At the expiration of aay-s1:lea the 
period 
as 
so 
extended, 
and 
in 
the 
absence 
of 
S1:lsa 
prior 
affirmative approval or disapproval, any s1:lea form s8a1-1--ge li 
deemed 
approved. 
The 
superintendent 
may 
at 
any 
time, 
after 
hearing and for cause shown, withdraw any s1:lea approval. 
Sec. A-3. 24-A MRSA §3049, sub-§3, as enacted by PL 1973, c. 
239, is amended to read: 
3. 
Discovery of fraud or material misrepresentation by 
eitae~ anyone of the following: 
A. 
The 
insured or ais the insured's 
representative in 
obtaining the insurance: or 
B. 
The named insured in pursuing a claim under the policy: 
Sec. A-4. 24-A MRSA §3049, sub-§4, as enacted by PL 1973, c. 
239, is repealed and the following enacted in its place: 
4. 
Discovery of either: 
A. 
Negligent acts or omissions by the insured substantially 
increasing any of the hazards insured against: or 
B. 
A failure to disclose a material fact in relation to the 
application 
for 
insurance 
that 
would, 
if 
coverage 
is 
effectuated without knowledge by the insurer, substantially 
alter the terms of the policy; 
Sec. A-S. 24-A MRSA §3049, sub-§S, as enacted by PL 1973, c. 
239, is amended to read: 
COMMITTEE AMENDMENT 
~~. 
~~ 
COMMITTEE AMENDMENT ,~, to S.P. 692, L.D. 1853 
5. 
Physical changes in the insured property whieh that 
result in the property becoming uninsurableTL 
Sec. A-6. 24-A MRS A §3049, sub-§§6 to 10 are enacted to read: 
6. 
The insured property is vacant and custodial care is not 
maintained on the property: 
7. 
The presence of a trampoline on the premises if the 
insured is notified that the policy will be cancelled if the 
trampoline is not 
removed 
and the trampoline, 
after notice, 
remains on the property 30 or more days after the date of notice; 
8. 
The 
presence of 
a 
swimming 
pool 
upon 
the 
insured 
property that is not fenced in. in accordance with the standards 
established in Title 22. section 1631, if the pool remains in 
noncompliance with those standards for 30 days after notice by 
the insurer of the defective condition and intent to cancel the 
policy: 
9. 
A loss occasioned by a dog bite. unless. after notice of 
cancellation or nonrenewal is received. the insured removes the 
dog: or 
10. 
Failure 
to 
comply 
with 
reasonable 
loss 
control 
recommendations within 90 days after notice from the insurer. 
Sec. A-7. 24-A MRSA §3049,2nd" as amended by PL 1979, c. 
663, §§150 and 151 is further amended to read: 
This section sha~~ ~ 
not apply to any policy or coverage 
whieh ~ 
has been in effect less than eQ .2.Q. days at the time 
notice of cancellation is received by the named insured, or 9Q 
~ days in the case of residential property 
wh~eh ~ 
is 
expected to 
be 
continuously unoccupied for 
months 
in any 
12-month period and whieh ~ 
is other than the insured's 
primary residence, unless it is a 
renewal pOlicy. 
An insured 
sha~~ ~ 
not 
have 
the 
right 
to 
a 
hearing 
before 
the 
Superintendent 
of 
Insurance 
for 
the 
purpose 
of 
contesting 
cancellation of a new policy that has been in force less than eQ 
.2.Q. days or 9Q ~ 
days in the case of residential property other 
than the insured's primary residence whieh ~ 
is expected to be 
continuously unoccupied for 3 months in any 12-month period. 
Sec. A-S. 24-A MRSA §3051, as amended by PL 1979, c. 347. 
§12, is further amended to read: 
§305l. 
Notice of intent 
COMMITTEE AMENDMENT 
~. 
~~. 
COMMITTEE AMENDMENT "A, to S.P. 692, L.D. 1853 
Ne An insurer sha~~ 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 sha~~ ~ not se effective unless received 
by the named insured at least 30 days prior to the expiration 
date 
of 
the 
policy. 
A 
pes~-e~~ie&--aepa~~meB~ post 
office 
certificate of mailing to the named insured at his the insured's 
last known address sha~l-se is conclusive proof of receipt on the 
3rd calendar day after mailing. The reason 
sha~~ 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 within 30 days as provided. 
The reason or reasons for the intended nonrenewal action 
sha~~ must accompany the notice of intent not to renew and the 
reason or reasons 
sha~~ IDY.§..t be explicit. Explanations such as 
"underwriting reasons," "underwriting experience," "loss record, II 
"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 
sha~~ must be 
a good faith reason and rationally related to the insurability of 
the property or a ground for cancellation pursuant to section 
lQli. 
This section sha~~ ~ 
not apply: 
1. 
If the insurer has manifested its willingness to renew; 
2. 
If the insured fails to pay any premium due or any 
advance premium required by the insurer for renewal. 
Sec. A·9. 24·A MRSA §3054, as amended by PL 1989, c. 172, 
§8, is further amended to read: 
§3054. 
Bearing before Superintendent of Insurance 
ABY A named insured who has received a statement of reason 
for cancellation, or of reason for an insurer's intent not to 
renew a policy, may, within 30 days of the receipt of a statement 
of 
reason, 
request 
a 
hearing 
before 
the 
Superintendent 
of 
Insurance. The purpose of this hearing sha·H.--ee ~ limited to 
establishing the existence of the proof or evidence used by the 
insurer in its reason for cancellation or intent not to renew. 
The burden of proof of the reason for cancellation or intent not 
to renew shall-se-QpeB ~ 
the insurer. 
If an insurer's reason 
for 
nonrenewal 
is 
not 
based 
on 
a 
ground 
for 
cancellation 
permitted under section 3049, the insurer must provide proof or 
evidence that the reason for nonrenewal is a good faith reason 
and rationally related to the insurability of the property. 
A 
COMMITTEE AMENDMENT 
~co' 
~,~ 
COMMITTEE AMENDMENT ,~, to S.P. 692, L.D. 1853 
statement from the insurer that the risk does not meet the 
insurer's 
underwriting 
guidelines 
alone 
is 
not 
considered 
sufficient proof or evidence. 
The superintendent shall adopt 
rules for carrying out this section. The superintendent saall 
aave-~~~~~~-~9 may order the policy to continue in effect 
both pending and, if the superintendent finds in favor of the 
insured, subsequent to a hearing. 
If the superintendent finds in 
favor of the insurer at a hearing, the superintendent may order 
the policy to remain in force for 14 days to allow the insured to 
obtain other coverage. 
Sec. A-IO. 24-A MRSA §§3057,3058 and 3059 are enacted to read: 
S3057. 
Actions related to age of dwelling prohibited 
An insurance company authorized to transact business in this 
State may not cancel or refuse to issue or renew a property 
insurance policy subject to this subchapter solely on the basis 
of the age of the dwelling and without consideration of the 
current condition of the property. 
S3058. 
Refusal based on previous owner's losses 
An insurance company authorized to transact business in this 
State may not refuse to issue a property insurance policy subject 
to this subchapter for the sole reason that a previous owner of 
the property submitted claims for losses to the property. 
S3059. 
Insurer valuation of prOftrty: increase in premium: notice 
1. 
Increase in valuation. 
If an insurer determines that 
the stated insured value of a property covered by a 
policy 
subject to this subchapter should be increased to depict more 
accurately its current value and the increase in valuation will 
result in an 
increase in premium for 
the policy, 
then the 
increase 
in the 
stated insured value 
and 
the 
corresponding 
increase in premium may be 
implemented only at the time of 
renewal. 
2. 
Notice. 
If an insurer increases the stated insured 
value in accordance with subsection 1, then the insurer must 
provide notice to the named insured on the policy at least 30 
days prior to the effective date of the renewal policy stating 
the reason for the increase in premium and the amount of premium 
increase associated with the increase in valuation. 
The notice 
also must state that upon written request by the named insured 
the insurer will disclose the specific reasons 
and specific 
property 
characteristics 
that 
contributed 
to 
the 
resulting 
increase in stated value. 
COMMITTEE AMENDMENT 
..,co-
~-
COMMITTEE AMENDMENT 'A" to S.P. 692, L.D. 1853 
3. 
EZeJgptions. 
This section does not apply to routinely 
scheduled increases 
in valuation under 
the policy based 
on 
inflation or to increases in the stated insured value of a 
property agreed to by the insured. 
Sec. A·II. 39·A MRSA §403, sub·§4·A, as enacted by PL 2003, c. 
315, §2, is amended by amending the first paragraph to read: 
4-A. 
Group 
self-insurance 
reinsurance 
account. 
As 
an 
alternative 
to 
obtaining 
a 
reinsurance 
contract 
providing 
coverage against losses arising out of one occurrence, a group 
self-insurer 
may 
participate 
in 
a 
group 
self-insurance 
reinsurance 
account, 
referred to 
in this 
subsection as 
"an 
account," as provided in this subsection. 
More than one account 
may be established pursuant to this subsection. 
~aeR An account 
established pursuant to this subsection is-~-~-eB~ity 
aBe may be established as either an independent private entity or 
an instrumentality of the State, but the debts and liabilities of 
an account established as an instrumentality of the State are not 
debts and liabilities of the State. 
An account established as an 
instrumentality of the State within 24 months of its formation, 
with the approval of the superintendent, may transfer all of its 
assets 
and 
liabilities 
into 
an 
account 
established 
as 
an 
independent private entity. 
Sec. A·12. 39·A MRSA §403, sub·§4·A, ,,. and K, as enacted by 
PL 2003, c. 315, §2, are amended to read: 
I. 
Assets of an account's fund may be used exclusively for 
payment of expenses of the account and payment of claims 
against the account and for no other purpose, except that an 
account 
established 
as 
an 
independent 
private 
entity 
pursuant to this subsection may issue such dividends to its 
members as are approved by the superintendent. 
K. 
In the event of dissolution of an account established as 
an instrumentality of the State pursuant to this subsection, 
all 
assets 
rema~n~ng 
after 
the 
satisfaction 
of 
all 
outstanding claims must be distributed to the Treasurer of 
State to be included in the Maine Self-Insurance Guarantee 
Association. 
PARTB 
Sec. B·I. 24·A MRSA §2322·A, sub·§I, as enacted by PL 1989, c. 
797, §25 and affected by §§37 and 38, is amended to read: 
COMMITTEE AMENDMENT 
~ 
f:::J. 
~. 
COMMITTEE AMENDMENT 'A" to S.P. 692, L.D. 1853 
1. 
Notwithstanding 
section 
232l-B, 
subsection 
and 
consistent with sections 2325, 2325-A, 2325-B and 2366, insurers, 
rating organizations and advisory organizations participating in 
joint underwriting, joint reinsurance pools or residual market 
mechanisms 
may, 
in 
connection 
with 
such 
activity, 
act 
in 
cooperation with each other in the making of rates, 
rating 
systems, policy forms, underwriting rules, surveys, inspections 
and investigations, the furnishing of loss and expense statistics 
or 
other 
information, 
or 
conducting 
research. 
Joint 
underwriting, 
joint 
reinsurance 
pools 
and 
residual 
market 
mechanisms are not considered to be advisory organizations. 
Sec. B-2. 24-A MRSA §2325-B is enacted to read: 
§2325-B. 
MandatoU' property and casualty insurance market 
assistance program 
1. 
Definitions. 
As 
used in this 
section, 
unless 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
following meanings. 
the 
the 
A. 
"Basic property and casualty insurance" means policies 
that insure against loss or damage to real property that is 
used 
for 
residential 
purposes, 
is 
owner-occupied 
and 
consists of not more than 4 apartments, and that may also 
insure against loss or damage to tangible personal property 
and the legal liability of a natural person or persons for 
loss of, damage to or injury to persons or property. 
"Basic 
property 
and 
casualty 
insurance" 
may 
include 
standard 
homeowners 
package 
property 
and 
liability 
insurance, 
functional 
replacement 
homeowners 
package 
insurance, 
dwelling 
fire 
policies 
and 
extended 
coverage 
policies. 
"Basic property and casualty insurance" does not include 
automobile 
insurance, 
workers' 
compensation 
insurance or 
insurance primarily covering risks arising from the conduct 
of a commercial or industrial enterprise. 
B. 
"Governing committee" means the committee established to 
operate the program pursuant to subsection 5. 
C. 
"Member insurer" means 
an authorized insurer who is 
required to be a member of the program in accordance with 
subsection 3. 
D. 
"Modified policy form" means any new or amended policy 
form developed by member insurers for risks written through 
the program. 
COMMITTEE AMENDMENT 
~~. 
~. 
COMMITTEE AMENDMENT 'A" to S.P. 692, L.D. 1853 
E. 
"Modified rate" means any new or amended rate or rating 
rule developed by member insurers for risks written through 
the program. 
F. 
"Modified policy form and rate filing" and "modified 
filing" mean any modified policy form and modified rate 
filed with the superintendent under subsection 9. 
G. 
"Net 
direct 
premiums" 
means 
gross 
direct 
written 
premiums on basic property and casualty insurance in this 
State 
less 
return 
premiums 
upon 
cancelled 
contracts r 
irrespective of reinsurance assumed or ceded. 
H. 
"Program" 
means 
the mandatory property and casualty 
insurance 
market 
assistance 
program 
described 
in 
this 
section. 
I. 
"Underserved areas or risk types r" "underserved areas" 
and "underserved risk types" mean specific geographic areas 
or property risk types in this State that the superintendent 
designates by rule as not having reasonable access to basic 
property and casualty insurance. 
2. 
Authority to establish program. 
If the superintendent 
establishes a voluntary market assistance plan in accordance with 
section 2325-A to increase the availability of basic property and 
casualty 
insurance 
in 
this 
State 
and 
the 
superintendent 
determines after a public hearing that the number of insurers 
participating 
in 
the 
voluntary 
market 
assistance 
plan 
is 
insufficient or that a sufficient number of risks has not been 
written through the plan. then the superintendent may establish a 
mandatory 
property 
and 
casualty 
insurance 
market 
assistance 
program in accordance with this section. 
The 
superintendent 
shall 
adopt 
rules 
regarding 
the 
level 
of 
insufficient 
participation in the vOluntary market assistance plan that is 
necessary for the establishment of a program under this section. 
The 
prov~s~ons in 
the 
rules 
governing 
a 
determination 
of 
insufficient participation in the voluntary market assistance 
plan must take into account the length of time the voluntary 
market assistance plan is operational. 
3. 
MandatoU insurer participation. 
All insurers. except 
eligible surplus lines insurers. authorized to write and engaged 
in writing in this State. on a direct basis. basic property and 
casual ty insurance shall cooperate in organizing a program as 
required by subsection 4. 
Every such insurer must be a member of 
the program and remain a member as long as the insurer has net 
direct premiums on basic property and casualty insurance in this 
State. 
COMMITTEE AMENDMENT 
.. e:,. 
~. 
COMMITTEE AMENDMENT "A" to S.P. 692, L.D. 1853 
4. 
Required 
action 
W-
su.perintendent. 
If 
the 
superintendent determines 
that 
a 
program 
under 
this section 
should be established in accordance with the requirements of 
subsection 2. the superintendent shall: 
A. 
Order member insurers to cooperate in the organization 
of the program: 
B. 
Appoint 
the 
members 
of 
the 
governing committee 
in 
accordance with subsection 5: 
C. 
Order the governing committee to develop a proposed plan 
of operation for the program in accordance with subsection 
6. including a deadline for the submission of the plan: and 
D. 
Initiate rulemaking in accordance with subsection 8. 
5. 
Governing coomittee. 
The governing committee of the 
program consists of 8 members as follows: 
A. 
Five members appointed by the superintendent who are 
full-time employees of member insurers: 
B. 
Two 
members appointed by the superintendent who 
are 
licensed producers with property and casualty authority: and 
C. The superintendent or the superintendent's designee. who 
serves as an ex-officio. nonvoting member. 
The terms of members of the governing committee and process for 
filling vacancies must be established in the plan of operation 
pursuant to subsection 6. 
6. 
Plan of operation. 
The program must be operated by the 
governing committee established under subsection 5 pursuant to a 
plan of operation approved by the superintendent. 
The governing 
committee shall develop a plan of operation and submit the plan 
to 
the 
superintendent 
for 
approval. 
If 
the 
superintendent 
disapproves 
the 
proposed 
plan 
of 
operation. 
the 
governing 
committee 
must. 
within 
days. 
submit 
for 
review 
an 
appropriately revised plan of operation and. if the governing 
committee fails to submit such a plan or if the revised plan is 
also disapproved by the superintendent. the superintendent must 
develop a plan of operation consistent with this section. 
The 
governing committee may. on its own initiative or at the request 
of the superintendent. 
amend the plan of operation with the 
approval of the superintendent. 
The plan of operation must: 
COMM/rrEE AMENDMENT 
.~. 
~. 
COMMITTEE AMENDMENT 'A" to S.P. 692, L.D. 1853 
A. 
Adopt a mechanism for the equitable apportionment of 
risks 
under 
the 
program. 
including 
the 
equitable 
distribution among member insurers of applications for basic 
property and casualty insurance to cover underserved areas 
or risk types from eligible applicants who are in good faith 
entitled to but who are unable to procure basic property and 
casualty insurance through ordinary methods in the voluntary 
admitted market; 
B. 
Establish a 
methodology for 
the calculation and the 
payment of fees or commissions to producers with respect to 
eligible risks written through the program; 
C. 
Require that member insurers write basic property and 
casualty 
insurance 
for 
eligible 
applicants 
to 
cover 
underseryed areas or risk types in accordance with each 
member insurer's underwriting guidelines and rating rules 
applicable to risks written through the program to the 
extent not inconsistent with reasonable underwriting and 
rating rule limitations contained in rules adopted by the 
superintendent under sUbsection 8; 
D. 
Permit the use of rate filings and policy forms by 
member insurers. including: 
(1) The ability for member insurers to use existing 
forms and rates to write basic property and casualty 
insurance in the program: 
(2) The authority for member insurers to file modified 
policy forms 
and modified rates in accordance with 
subsection 9. including permissible surcharges on those 
policies in accordance with limits established by the 
superintendent by rule: and 
(3) The authority for the 
program to develop uniform 
policy forms 
and rates for 
use by member 
insurers 
subject to 
approval 
of 
the 
superintendent 
and 
the 
requirements of subsection 9: 
E. 
Establish a procedure for the possible future creation 
of a risk pooling arrangement or reinsurance program for the 
distribution of the losses and expenses of basic property 
and casualty insurance written through the program; 
F. 
Provide that a member insurer is entitled to receive 
credit for voluntarily writing basic property and casualty 
insurance in underserved areas or on underserved risk types 
and that the participation in the program of an insurer who 
does so must be reduced in accordance with the mechanism of 
COMMITTEE AMENDMENT 
.,e:,. 
~. 
COMMITTEE AMENDMENT ,,~, to S.P. 692, L.D. 1853 
apportionment and distribution established under paragraph A: 
G. 
Establish 
a 
grievance 
process 
for 
applicants 
for 
insurance, insureds and member insurers with the prQgram and 
aright tQ appeal thQse gr ievances to the super intendent 
after an initial decision by the gQverning committee: 
H. 
Establish prQcedures for the inspection of properties by 
Qr Qn behalf Qf member insurers: 
I. 
Establish a uniform prQcess tQ inform Qwners of prQperty 
in under served areas Qr of underseryed risk types Qf the 
specific circumstances 
and 
prQperty characteristics that 
affect 
the 
insurability 
Qf 
the 
property 
including 
recQmmendations 
for 
imprQving 
the 
insurability 
Qf 
the 
prQperty: 
J. 
Require that in order for an applicant to purchase basic 
prQperty and casualty insurance through the prQgram, 
the 
applicant 
must 
produce 
proof 
of 
declinations 
from 
authorized 
insurers 
Qther 
than 
eligible 
surplus 
lines 
insurers, to write insurance on the property. 
The plan of 
operation must allow one of the declinations to be in the 
fQrm of a cancellation Qr nQnrenewal notice unless coverage 
has been ordered to stay in effect pending the outcome of a 
hearing 
before 
the 
superintendent, 
in 
which 
case 
the 
cancellation Qr nonrenewal nQtice may only be used as a 
declination in the person's application to the prQgram if 
the decision in the hearing is in fayor of the insurer; 
K. 
Establish a finite list of reasons 
a policy issued 
thrQugh the program may be cancelled, which may include 
nQnpayment of premium, fraud or material misrepresentatiQn; 
L. 
Stipulate that cancellation of policies issued through 
the prQgram may not be effective less than 20 days after 
receipt by the insured of the nQtice of cancellation Qr, if 
the cancellation is for nonpayment of premium, may not be 
effectiye less than 10 days after receipt by the insured Qf 
the nQtice of cancellation and that a postal 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: 
M. 
Establish eligibility criteria for 
policies 
issued 
through the program, except that any eligibility criteria 
may not be inconsistent with the purposes for establishing 
the program: 
Page ll-LR2725(2) 
COMMITTEE AMENDMENT 
.Co· 
~. 
COMMITTEE AMENDMENT "A, to S.P. 692, L.D. 1853 
N. 
Establish the limits of liability a member insurer is 
required to 
assume, 
except that for 
any policy issued 
through the program, the maximum amount of coverage for a 
dwelling on a residence premises does not exceed $300,000, 
the maximum limit for any liability coverage does not exceed 
$3QQ,QQQ 
and 
any 
limits 
of 
liability 
for 
additional 
coverages, including coverage for loss or damage to other 
structures or tangible personal property or for loss of use, 
may not count toward the maximum coverage limits applicable 
to the dwelling or any liability coverage; 
O. 
Establish procedures for the efficient, economical, fair 
and nondiscriminatory administration of the program; 
P. 
Authorize 
the 
governing 
committee 
to 
assess 
member 
insurers for reasonable expenses incurred in administering 
the program; 
O. 
Establish procedures 
to 
govern 
a 
member 
insurer's 
withdrawal from the program; and 
R. 
Include 
any other procedures or operational matters 
considered necessary by the governing committee with the 
approval of the superintendent. 
7. 
Operation of 
program 
contingent 
upon 
approval. 
The 
program may not become operational until rules have been adopted 
as required by this section and the superintendent has approved 
the plan of operation in accordance with subsection 6. 
8. 
Rulemating. 
In 
accordance 
with 
subsection 
4, 
the 
superintendent 
may 
adopt 
rules 
to 
implement this section. 
Rules adopted pursuant to this subsection are routine technical 
rules under Title 5, chapter 375, subchapter 2-A. 
Rules adopted 
under this section may include; 
A. 
The designation of underserved areas or risk types; 
B. 
Reasonable 
limitations 
on 
underwriting 
guidelines 
applicable to all member insurers for the issuance of basic 
property and casualty insurance through the program: 
C. 
A writing level based on net direct premiums under which 
an insurer may 
seek to limit its participation or seek 
exemption from participation in the program; 
D. 
Maximum 
allowable 
caps 
on 
rating 
surcharges 
and 
limitations on rating rules for risks written through the 
program; 
Page l2-LR2725(2) 
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COMMITTEE AMENDMENT ,A" to S.P. 692, L.D. 1853 
E. 
The process by which the superintendent may suspend or 
terminate the program: and 
F. 
Any 
other 
provisions 
necessary 
to 
implement 
the 
reguirements of this section. 
9. 
Modified policy form 
and rate filings. 
A modified 
policy form 
and modified rate 
developed by a member insurer 
must be filed with the superintendent. 
A modified rate to be 
used in connection with an existing policy form that consists 
solely of a permissible surcharge not in excess of the maximum 
allowable cap contained in rules adopted under subsection 8 may 
be used by a member insurer immediately upon filing that modified 
rate with the superintendent. 
For any other modified filings, a 
modified policy form 
and modified rate 
must be filed with the 
superintendent not less than 30 days in advance of the stated 
effective date. 
A modified rate filing subject to the 30-day 
advance filing reguirement must include any supplementary rating 
information to be used in conjunction with a rate and, to the 
extent available, sufficient supporting information to support a 
rate. 
A modified rate may 
not be excessive, 
inadeguate or 
unfairly discriminatory with respect to risks written through the 
program. 
A modified policy form 
may only be disapproved for the 
grounds specified in section 2413. 
All modified policy form and 
rate filings are confidential until effective or approved in 
accordance with applicable law. 
10. 
IDllmnity from liability for inspections. 
There is no 
liability on the part of, and a cause of action does not arise 
against, member insurers, the program or the governing committee 
or agents or employees of any of them or the superintendent or 
the superintendent's authorized representatives with respect to 
any inspections to be undertaken by this section or for any acts 
or omissions in connection with those inspections or for any 
statements made in a 
report or communication concerning the 
insurability of the property. 
11. 
Superintendent's authority to suspend. 
In the event of 
impairment or serious financial difficulty of a member insurer ( 
the superintendent may suspend the application of the provisions 
of this section from 
applying to the 
financially distressed 
member insurer. 
12. 
E~iration of program. 
A program established by the 
superintendent pursuant to this section expires 2 years from the 
date the program becomes operational unless terminated earlier by 
the 
superintendent or 
unless, 
after 
a 
public 
hearing, 
the 
superintendent 
determines, 
based 
on 
clear 
and 
convincing 
evidence, that continued operation of the program is necessary to 
address 
the 
unavailability 
of 
basic 
property 
and 
casualty 
Page l3-LR2725(2) 
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COMMITTEE AMENDMENT "Ie to S.P. 692, L.D. 1853 
insurance for underserved areas or risk types. 
For purposes of 
this subsection. the program becomes operational on the effective 
date of the first policy issued through the program. 
If the 
superintendent finds that continued operation of the program is 
necessary. then any person insured under the program must reapply 
for 
coverage as 
new business under the program at the next 
renewal date occurring after the date of the superintendent I s 
order to continue the program. 
Any policy written through the 
program that is in force when the program is terminated continues 
in force until its stated expiration date in accordance with the 
terms and conditions of the policy and the provisions in the plan 
of operation. 
13. 
Povers of superintendent. 
In addition to any powers 
conferred upon the superintendent by this or any other law. the 
superintendent has authority to supervise the program and 
may: 
A. 
Examine and investigate the operation of the program and 
member 
insurers 
through 
free 
access 
to all the 
books. 
records. 
files. 
papers 
and 
dO~wments relating to their 
operation and may summon. qualify and examine as witnesses 
all persons having knowledge of such operations. including 
the governing committee 
and its officers. 
employees 
and 
agents: 
B. 
Require 
reports 
from 
the 
program. 
the 
governing 
committee 
and 
member 
insurers 
concerning 
risks 
insured 
through 
the 
program 
as 
the 
superintendent 
considers 
necessary: 
C. 
Approye or disapprove modified policy forms. modified 
endorsements. modified rates and modified rating and rule 
manuals for use by member insurers: and 
D. 
Suspend or terminate the program in accordance with 
subsection 12 and any process established by rule. 
14. 
Penalties for violations. 
The superintendent may take 
any action permitted under section l2-A against a member insurer 
or any other person required to be licensed under this Title who 
violates this section or any other applicable law or rule. 
15. Annual report. 
On or before March 31st of each year. 
the governing committee shall submit 
a 
report detailing the 
program's 
operations 
for 
the 
previous 
calendar 
year 
to 
the 
superintendent 
and 
the 
joint 
standing 
committee 
of 
the 
Legislature having 
jurisdiction oyer 
insurance 
and 
financial 
services matters. 
The annual report is a public record within 
the meaning of Title I. chapter 13. subchapter 1. 
Page l4-LR2725(2) 
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COMMITTEE AMENDMENT A" to S.P. 692, L.D. 1853 
16. 
Applicability 
of 
provisions. 
Insurance 
provided 
through the program is subject to all other laws relating to that 
type of insurance. except policies issued through the program are 
not subject to section 3007 or to chapter 41. subchapter 5. 
In 
the event there is a conflict between any express provision in 
this section and any other applicable law. then the provisions of 
this section control. 
Notwithstanding sections 2162 and 2303. a 
member 
insurer 
may utilize underwriting guidelines. 
modified 
policy forms. modified rates and rating rules that differ from 
its voluntary business with respect to insurance issued through 
the program. 
as long as the program underwriting guidelines, 
modified policy forms. modified rates and rating rules comply 
with this section. the plan of operation and the rules adopted by 
the superintendent.' 
SUMMARY 
The amendment replaces the bill and changes the title. 
PART A 
Part A of the amendment does the following. 
1. 
It removes 
the authority for 
the Superintendent of 
Insurance to delay the effective date of property and casualty 
insurance 
rate filings 
made 
electronically and 
requires 
the 
superintendent to approve or disapprove policy form filings made 
electronically for lines of insurance other than life. health and 
annuity. 
2. 
It 
clarifies 
the 
current 
law 
that 
permits 
the 
cancellation of homeowner's insurance on the basis of fraud or 
material misrepresentation by the named insured or the insured's 
representative. 
3. 
It adds new grounds for the cancellation of property 
insurance subject to the "Maine Property Insurance Cancellation 
Control Act," the Maine Revised Statutes, Title 24-A, chapter 41, 
subchapter 
5, 
including 
the 
presence 
of 
a 
trampoline, 
the 
presence of a 
swimming pool not properly fenced in, 
a 
loss 
occasioned by a dog bite and the fact that a property is vacant 
without adequate custodial care. 
4. 
It requires insurers to provide at least 90 days' notice 
to the 
named insured to comply with reasonable loss control 
recommendations 
before 
a 
cancellation 
notice 
or 
notice 
of 
nonrenewal may be issued. 
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COMMITTEE AMENDMENT A" to S.P. 692, L.D. 1853 
5. 
It amends the hearing section of the Maine Property 
Insurance Cancellation Control Act to clarify that an insurer 
must provide proof or evidence that its reason for nonrenewal of 
a policy is a good faith reason and rationally related to the 
insurability of the property if the reason for nonrenewal is not 
based on a statutorily permissible ground for cancellation. The 
amendment also clarifies that a statement from the insurer that a 
risk does not meet the insurer's underwriting guidelines alone is 
not considered sufficient proof or evidence of its reason for 
nonrenewal in a hearing before the Superintendent of Insurance. 
6. 
It prohibits an insurer from cancelling or refusing to 
issue or renew a property insurance policy solely on the basis of 
the age of the dwelling. 
7. 
It prohibits an insurer 
from declining 
property on the basis that a previous owner of 
submitted claims for losses to the property. 
to insure a 
the property 
8. 
It prohibits insurers from increasing the stated value 
of 
a 
property insured under a 
policy governed by the Maine 
Property Insurance Cancellation Control Act at any time other 
than at renewal. 
The amendment also requires insurers to provide 
notice 
to 
the 
named 
insured explaining the 
reason for 
any 
increase in premium associated with an increase in stated value 
and disclosing how an insured may obtain additional information 
concerning the reasons for the increase in the stated value. 
The 
amendment also clarifies that this provision does not apply to 
routinely scheduled increases in valuation or to increases in 
stated value agreed to by the insured. 
9. 
It makes 
technical 
changes 
to 
the 
laws 
governing 
workers' 
compensation group self-insurance reinsurance accounts 
related to the legal and tax status of the account. 
PART B 
Part B of the amendment authorizes the Superintendent of 
Insurance 
to 
establish 
a 
mandatory 
property 
and 
casualty 
insurance market assistance program to provide basic property and 
casualty insurance to underserved areas or risk types in Maine. 
Prior 
to 
establishing 
the 
program, 
the 
superintendent 
must 
establish a 
voluntary market assistance plan pursuant to the 
Maine Revised Statutes, Title 24-A, section 2325-A and find that 
either the number of insurers participating in the voluntary 
market assistance plan is insufficient or that a 
sufficient 
number of risks has not been written through the voluntary market 
assistance plan. 
If a 
mandatory program is established, 
any 
insurer authorized to write basic property and casualty insurance 
and actually writing such insurance in Maine must cooperate in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A" to s.P. 692, L.D. 1853 
organizing the program and remain a member of the program as long 
as that insurer has net direct premiums on basic property and 
casualty 
insurance 
in 
Maine. 
The 
bill 
authorizes 
the 
superintendent to appoint a governing committee to oversee the 
program 
and to develop 
a 
plan of operation subject to 
the 
approval 
of 
the 
superintendent. 
It 
also 
authorizes 
the 
superintendent to adopt rules to implement the requirements of 
the program, including the designation of underserved areas or 
risk 
types, 
the 
creation 
of 
reasonable 
limitations 
on 
underwriting guidelines and rates for insurance written through 
the 
program 
and 
provl.sl.ons 
to 
govern 
the 
suspension 
or 
termination of the program. 
FISCAL NOTE REQUIRED 
(See attached) 
Page l7-LR2725(2) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 03129/04 ~ae 
12lst Maine Legislature 
Office of Fiscal and Program Review 
LD 1853 
An Act To Amend the Laws Relating to Property Insurance 
LR272S(02) 
Fiscal Note for Bill as Amended by Committee Amendment 'X 
Committee: Insurance and Financial Services 
j\ 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Additional cost to the Department of Professional and Financial Regulation can be absorbed utilizing existing 
budgetary resources. 
LR2725(2) - Fiscal Note - Page 1 of 1