An Act To Give Consumers the Option To Buy Cheaper Individual Health Insurance and Have Better Choices from Other States
Maine Legislature, Session 122, LD 0294
Committee: Insurance and Financial Services
Sponsors: GLYNN, WESTON, LINDELL, VAUGHAN
Amends: 24-A MRSA §405, 24-A MRSA §1420-M

Legislative Document 
No. 294 
H.P.219 
House of Representatives, January 18,2005 
An Act To Give Consumers the Option To Buy Cheaper Individual 
Health Insurance and Have Better Choices from Other States 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
!r/~ 
/J7.1ll~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative GLYNN of South Portland. 
Cosponsored by Senator WESTON of Waldo and 
Representatives: LINDELL of Frankfort, VAUGHAN of Durham. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §405. sub-§6. as enac ted by PL 1969, c. 13 2, 
§l, is amended to read: 
6. 
Any suit or action by the duly constituted receiver, 
rehabilitator or liquidator of the insurer, or of the insurer's 
assignee or successor, under laws similar to those contained in 
chapter 
(delinquency 
proceedings; 
rehabilitation 
and 
liquidation)T~ 
Sec. 2. 24-A MRSA §405, sub-§7 is enacted to read: 
7. 
TranSQ.kti.Q.nlL-_P~L$..\.1-"m_J;,~Q __ iD9,.iyid\.1al 
heal th 
insuraJJ~~e. 
covering residents of this State written by a foreign insurer or 
health maintenance organization duly authorized or qualified to 
transact such insurance in the state or country of its domicile 
if the superintendent certifies that the 
foreign insurer or 
health maintenance organization meets the requirements of section 
405-A. 
Sec.3. 24-A MRSA §§405-A and 405-B are enacted to read: 
§405-A. 
Certificatio~{-I2Iejgn insurers or health maintenance 
organizations to transact individual health insurance 
To qualify under 
thi~_~ectt~ilLgJld section 405, subsection 7, 
a 
foreign insurer or health maintenance organization may not 
transact individual health insurance in this State by mail, the 
Internet or otherwise unless the superintendent has 
issued a 
certification that the requirements of this section have been met 
as follows: 
1.. 
Certificate of authority 
from state or 
country of 
domicile. 
The foreign insurer or health maintenance organization 
holds a valid certificate of authority to transact individual 
health insurance in the state or country of its domicile; 
2. 
COIgpliance with laws of state or cOuntry of domicile. 
Any 
policy, 
contract 
or 
certificate 
of 
individual 
health 
insurance offered for sale in this State by a foreign insurer or 
health maintenance 
organization 
complies 
with 
the 
applicable 
individual health insurance laws in the state or country of its 
domicile and the policy is actively marketed in that state; 
3. 
Minimva--.&yxp-lJlL.Jm~~JYJJeY.eJs. 
The foreign insurer 
or health m~e.J).j~nce organi_~tiQn maintains minimum capital and 
surplus 
requirements 
and 
maintains 
reserves 
as 
required 
by 
Page l-LR0427(1) 
~~tion 410; chapter 11; section 4204, subsection 2-A, paragraph 
D; and section 4204-A as applicable; 
4. 
Disclosure ~d rel!9.Iting. 
The foreign insurer or health 
maintenance organization meets the requirements of section 4302 
for reporting plan information with respect to individual health 
plans offered for sale in this State and discloses to prospective 
enrollees how the health plans differ from individual health 
plans offered by domestic insurers in a format approved by the 
superintendent within 
days of the effective date of this 
section. Health plan policies and applications for coverage must 
contain the following disclosure statement or a 
substantially 
similar statement: "This policy is issued by a foreign insurer or 
heal th maintenance organization and is governed by the laws and 
regulations 
of 
the 
State 
of 
(foreign 
insurer 
or 
health 
maintenance organization's state of domicile). This policy might 
not be subject to all the insurance laws and rules of the State 
of Maine, including coverage of certain health care services or 
bendits mandated by Maine law. 
Befor_~urchasing this polin...-
you should carefully review the terms and conditions of coverage 
under this policy, including any exclusions or limitations of 
coverage"; 
5. 
Grie~ce pro~dy~es. The 
foreign 
insurer 
or 
health 
maintenance organization meets the requirements of section 4303, 
subsection 
for grievance procedures with respect to health 
plans offered for sale in this State; 
6. Unfair 
t~ade practices. The provisions in chapter 
apply to the foreign insurer or health maintenance organization; 
7. Premium ~~~~~ __ a~~~~~~~t~~ The foreign insurer or health 
maintenance organization is subject to applicable premium and 
other 
taxes 
or 
assessments 
imposed 
on 
insurers 
transacting 
individual health insurance in this State pursuant to this Title 
and Title 36; 
8. 
Service of process. 
The 
foreign 
insurer 
or 
health 
maintenance 
organization 
designates 
an 
agent 
for 
receiving 
service of legal documents and process in the manner provided in 
this Title; 
~~IDPliance wit;Jl~QJI-X~gg~s. 
The foreig..n insurer or 
pealth maintenance organization complies with lawful orders from 
courts 
of 
competent 
jurisdiction 
issued 
on 
a 
vOluntary 
dissolution proceeding or in 
response 
to 
a 
petition for 
an 
injunction 
by 
the 
superintendent 
asserting that 
the 
foreign 
insurer or health maintenance organization is in a 
hazardous 
financial condition; and 
10. 
Participation 
in 
guaranty 
association. 
The 
foreign 
~nsurer or health maintenance organization participates in an 
insurance insolvency guaranty association to which a 
domestic 
insurer 
or 
health 
maintenance 
organization 
that 
transacts 
individual health insurance is required to belong in accordance 
with this Title. 
Except 
as 
expressly 
provided 
in 
this 
section, 
the 
requirements of this Title do not apply to a foreign insurer or 
health maintenance 
organization permitted 
to 
transact health 
insurance under this section and section 405. 
§405-B. 
Domest.~.ig]J.~rs; individual health insurance approved 
in other states 
Notwithstanding any other provision of this Title except as 
expressly provided, 
a 
domestic 
insurer or health maintenance 
organization may offer for sale in this State an individual 
health plan duly authorized for sale in another state by a parent 
or subsidiary of the domestic insurer if: 
1. 
Certificate 
of 
a~QIity from 
stat~ or 
co~~y--9~ 
doaicile. The parent or subsidiary of the domestic insurer or 
health maintenance organization holds 
a 
valid certificate of 
authority to transact individual health insurance in the state or 
country of its domicile; 
2. Compliance with laws of state or country of domicile. Any 
policy, contract or certificate of individual health insurance 
offered for sale in this State by a domestic insurer or health 
maintenance organization complies with the applicable individual 
health insurance laws in the state or country of domicile of the 
parent or subsidiary and the policy is actively marketed in that 
state; 
3. Disclosure and reporting. The domestic insurer or health 
maintenance organization meets the requirements of section 4302 
for reporting plan information with respect to individual health 
plans offered for sale in this State and discloses to prospective 
enrollees 
how 
the 
individual health plans 
of 
the 
parent or 
subsidiary 
differ 
from 
individual 
health 
plans 
offered 
by 
domestic insurers in a 
format approved by the superintendent 
within 90 days of the effective date of this section. Health plan 
policies and applications for coverage must contain the following 
disclosure statement or a substantially similar statement: "This 
policy is issued by a 
domestic insurer or health maintenance 
QJ:.g Q.J)j~ at i on bJl~i s ----9"Q'Le-±:.IH~.Q __ .QL~~--19.}'L~qn.d r ul~ s~_tJ1L-~t£t~ 
of (state of domicile of parent or subsidiary of domestic), which 
is the state of 
domici~~~arent or subsidiary of the 
domestic insurer or health maintenance organization. 
This policy 
might not be subject to all the insurance laws and rules of the 
State 
of 
Maine, 
including 
coverage 
of 
certain health 
care 
services or benefits mandated by Maine law. 
Before purchasing 
this policy, you should carefully review the terms and conditions 
of 
coverage 
under 
this 
policy, 
including 
any 
exclusions 
or 
limi tations of cover~5L'Lan9 
~I~_V!:lP~~R-:(~c.t:td"'y.J::~J~_._1')1~ll1estic insurer or health 
maintenance organization meets the requirements of section 4303, 
subsection 4 
for grievance 
proce~res with respect to health 
plans offered for sale in this Stat~ 
Sec. 4. 24-A MRSA §1420-M. sub-§l, as enacted by PL 2001, c. 
259, §24, is amended to read: 
1. 
Appointment. 
An insurance producer may not act as an 
agent of an insurer unless the insurance producer becomes 
an 
appointed agent of that insurer. 
An insurance producer may not 
act 
as 
an agent of 
a 
foreign insurer or health maintenance 
organization certified to transact individual health insurance 
Qursuant 
t~~~ction 405-A 
unle~s the producer holds 
a 
valid 
producer license from the state or country of domicile of the 
foreign insurer or health maintenance organization. 
An insurance 
producer who is not acting as 
an agent of an insurer is not 
required to become appointed. 
Sec. 5. Effective date. 
This Act takes effect January 1, 2006. 
SUMMARY 
Beginning January 1, 
2006, this bill permits out-of-state 
health insurers, which are referred to as foreign insurers in the 
Maine Insurance Code, to offer their individual health plans for 
sale in this State if certain requirements of Maine law are met, 
incl uding minimum capi tal and surpl us and reserve requi rements, 
disclosure and reporting requirements and grievance procedures. 
It also permits Maine health insurers to offer individual health 
plans of out-of -state parent or subsidiary heal th insurers if 
similar requirements are met. If out-of-state health plans are 
offered 
for 
sale 
in 
this 
State, 
the 
bill 
requires 
that 
prospective enrollees be provided adequate disclosure of how the 
plans differ from Maine health plans in a format approved by the 
Superintendent of Insurance. 
The bill also prohibits an insurance producer from holding 
an appointment to sell out-of-state health plans to residents in 
this 
State 
unless 
the 
producer 
also holds 
a 
valid producer 
license in the state of domicile for that health insurer.