An Act To Amend the Maine Insurance Guaranty Association Act
Maine Legislature, Session 122, LD 1801
Committee: Insurance and Financial Services
Sponsors: SULLIVAN, PERRY, GLYNN, PILON, VAUGHAN
Amends: 24-A MRSA §4438, 24-A MRSA §4448, 24-A MRSA §4453

Legislative Document 
No. 1801 
S.P.718 
In Senate, December 30, 2005 
An Act To Amend the Maine Insurance Guaranty Association Act 
Approved for introduction by a majority ofthe Legislative Council pursuant to Joint Rule 
203. 
Received by the Secretary of the Senate on December 28, 2005. Referred to the Committee 
on Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant 
to Joint Rule 218. 
Presented by Senator SULLIVAN of York. 
Cosponsored by Representative PERRY of Calais and 
JOY J. O'BRIEN 
Secretary ofthe Senate 
Representatives: GLYNN of South Portland, McKANE of Newcastle, PILON of Sa co, 
VAUGHAN of Durham. 
Printed on recyc led paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §4438, sub-§I, ,C, as amended by PL 1995, c. 
289, §15, is further amended to read: 
C. 
Allocate claims paid and expenses incurred among the 3 
accounts separately; and assess member insurers separately 
for each account in amounts necessary to pay: 
(1) 
The obligations of the association under paragraph 
A, subsequent to an insolvency, the obligations of the 
accounts for shortfalls under section 4440-A, and for 
preinsolvency assessments, if required by section 4440, 
subsection 3, paragraph B, and the obligations of the 
association under paragraph A-I; 
(2) 
The expenses of handling covered claims subsequent 
to an insolvency; 
(3) 
The cost of examinations under section 4445 and 
audits under section 4453; and 
(4) 
Other expenses authorized by this subchapter; 
Sec. 2. 24-A MRSA §4448, as amended by PL 1973, c. 585, §12, 
is further amended to read: 
§4448. Immunity 
There saaH·-ee is no liability on the part of and no cause 
of action of any nature 
saa~~ mgy arise against any member 
insurer, the association or its agents or employees, the board of 
directorsT or the superintendent or ais the superintendent's 
representatives for any action taken or any failure to act by 
them in the performance of their powers and duties under this 
subchapter. 
This section provides no immunity for disclosing or 
furnishing false information with malice or willful intent to 
injure any person. 
Sec. 3. 24-A MRSA §4453 is enacted to read: 
§4453. 
Audits of association 
The 
association 
is 
subject 
to 
audit 
b.y 
the 
Workers' 
Compensation 
Board, 
created by Title 
39-A. 
section 
and 
referred to in this section as "the board," as provided in this 
section. 
1. 
Audit l)y bQMd. 
The board !1lay audit a claim arising 
under a workers' compensation policy that covers an individual in 
the State to determine whether the association: 
• 
A. 
Has paid covered claims in a reasonably timely manner 
after the association has received information adequate to 
determine 
that 
the 
claims 
are 
within 
the 
association's 
obligations under this subchapter; 
B. 
Is unreasonably contesting claims that are within the 
association's statutory payment obligations; and 
C. 
Has 
complied with reporting requirements established 
pursuant to subsection 2. 
2. 
Annual rep~rting regyir~t. Subject to the applicable 
requirements 
of 
the 
Maine 
Administratiye 
Procedure 
Act. 
the 
superintendent 
shall 
establish 
by 
rule 
an 
annual 
reporting 
requirement for the association with respect to the association's 
J.lQYIDent of workers' compensation claims and the termination of 
payments. 
3. 
Cooperation. 
The association shall cooperate 
the board and provide tbe information required by 
established by the superintendent. 
fully with 
the rules 
4. 
Confidentiality. 
Audit working papers are confidential 
and may not be disclosed to any person outside of the board 
except the association. 
For purposes of this subsection, "audit 
working 
papers" 
means 
all 
documentary 
and 
other 
information 
acquired, prepared or maintained by the board during the conduct 
of an audit of the association under this section, including all 
intra-agency and interagency communications relating to an audit 
and draft reports or any portion of a draft report. 
The final 
draft report, including the underlying reconciled information, is 
not confidential. 
~~~~~ity for bearing. 
PriQr to issuing a final audit 
report 
under 
this 
section, 
the 
board 
shall 
provide 
the 
association 
an 
opportunity 
for 
a 
hearing, 
at 
which 
the 
association may respond to the board's findings. 
6. 
Regulatory penalty. 
If as 
a result of an audit and 
subsequent hearing pursuant to subsection 5 the board determines 
that the association has engaged in a pattern of questionable 
claims-handling techniques or unreasonably contesting claims, the 
board shall certify its determination to the superintendent, who 
shall 
take 
appropriate 
action 
to 
halt 
that 
practice. 
The 
superintendent 
has 
sole 
authority 
to 
impose 
any 
regulatory 
penalty. 
7. 
Rulema)ing. 
Rules adopted pursuant to this section are 
routine technical rules as defined in Title 5, 
chapter 
375, 
subchapter 2-A. 
SUMMARY 
The bill permits the Workers' Compensation Board to audit 
the 
workers' 
compensation 
claims 
administered 
by 
the 
Maine 
Insurance Guaranty Association for the purpose of reviewing the 
timeliness of claims payments 
and whether the association is 
unreasonably contesting claims. 
Under current law, the Workers' 
Compensation Board does not have that authority. 
•