An Act To Create the Insurance Fraud Division within the Bureau of Insurance
Maine Legislature, Session 123, LD 0713
Committee: Insurance and Financial Services
Sponsors: MARRACHE, TARDY, SULLIVAN, PERRY, VAUGHAN
Amends: 16 MRSA §614, 24-A MRSA §2186, 24-A MRSA §2187, 24-A MRSA §2188

Legislative Document 
No. 713 
S.P.230 
February 13, 2007 
An Act To Create the Insurance Fraud Division within the Bureau 
of Insurance 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator MARRACHE of Kennebec. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Representative TARDY of Newport and Senator: SULLIVAN of York, 
Representatives: PERRY of Calais, VAUGHAN of Durham. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 16 MRSA §614, sub-§I, as amended by PL 1999, c. 155, Pt. A, §5, is 
further amended to read: 
1. Limitation on dissemination of intelligence and investigative information. 
Reports or records that contain intelligence and investigative information and that are 
prepared by, prepared at the direction of or kept in the custody of a local, county or 
district criminal justice agency; the Bureau of State Police; the Department of the 
Attorney General; the Maine Drug Enforcement Agency; the Office of State Fire 
Marshal; the Department of Corrections; the Department of Professional and Financial 
Regulation, Bureau of Insurance, Insurance Fraud Division; the criminal law enforcement 
units of the Department of Marine Resources or the Department of Inland Fisheries and 
Wildlife; or the Department of Conservation, Division of Forest Protection when the 
reports or records pertain to arson are confidential and may not be disseminated if there is 
a reasonable possibility that public release or inspection ofthe reports or records would: 
A. 
Interfere with law enforcement proceedings; 
B. 
Result in public dissemination of prejudicial information concerning an accused 
person or concerning the prosecution's evidence that will interfere with the ability of 
a court to impanel an impartial jury; 
C. 
Constitute an unwarranted invasion of personal privacy; 
D. 
Disclose the identity of a confidential source; 
E. 
Disclose confidential information furnished only by the confidential source; 
F. 
Disclose trade secrets or other confidential commercial or financial information 
designated as such by the owner or source of the information or by the Department of 
the Attorney General; 
G. 
Disclose investigative techniques and procedures or security plans and 
procedures not generally known by the general public; 
H. 
Endanger the life or physical safety of any individual, including law 
enforcement personnel; 
I. 
Disclose conduct or statements made or documents submitted by any person in 
the course of any mediation or arbitration conducted under the auspices of the 
Department of the Attorney General; 
J. 
Disclose information designated confidential by some other statute; or 
K. 
Identify the source of complaints made to the Department of the Attorney 
General involving violations of consumer or antitrust laws. 
Sec. 2. 24-A MRS A §2179, as amended by PL 1973, c. 585, § 12, is repealed. 
Sec. 3. 24-A MRSA §2186, sub-§4, ~C is enacted to read: 
C. 
An insurer having knowledge or a reasonable belief that a fraudulent insurance 
act is being, will be or has been committed shall provide to the superintendent the 
I 
information required by the superintendent in a manner prescribed by the 
superintendent by rule. 
Rules adopted pursuant to this paragraph are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. For purposes of 
this subsection, "insurer" does not include an insurance producer or other person 
acting on behalf of an insurer. 
Sec. 4. 24-A MRSA §2186, sub-§4, ~ 
is enacted to read: 
D. 
Any person having knowledge or a reasonable belief that a fraudulent insurance 
act is being, will be or has been committed may provide to the superintendent the 
information required by the superintendent in a manner prescribed by the 
superintendent by rule. 
Rules adopted pursuant to this paragraph are routine 
II 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. 5. 24-A MRSA §2187, sub-§l,~, as amended by PL 2005, c. 433, § I and 
affected by §28, is further amended to read: 
B. 
"Authorized agency" or "authorized agencies" means: 
(1) The Attorney General; 
(2) A district attorney responsible for prosecution in the municipality where the 
fraud occurred; 
(3) The Federal Bureau oflnvestigation, or any other federal agency, only for the 
purposes of subsection 2; 
(4) The State Fire Marshal; 
(5) The Superintendent oflnsurance; 
(6) The Superintendent of Financial Institutions; 
(7) 
The United States Attorney's office when authorized or charged with 
investigation or prosecution of the insurance fraud in question, only for the 
purposes of subsection 2; 
(8) The State Police, state law enforcement officials or local law enforcement 
officials; eF 
(9) 
The }latioflal Associatiofl of Ins\:Ifance Commissioners. A national 
association of insurance commissioners; 
(10) An international association of insurance supervisors; 
(11) An international police organization; 
(12) A national insurance crime bureau or similar organization that collects, 
receives, investigates or analyzes information concerning insurance fraud; 
(13) Insurance supervisors or law enforcement authorities outside the United 
States; or 
(14) The Workers' Compensation Board. 
Sec. 6. 24-A MRSA §2187, sub-§4, as enacted by PL 1997, c. 675, §2, IS 
repealed. 
Sec. 7. 24-A MRSA §2187, sub-§5, as enacted by PL 1997, c. 675, §2, IS 
. amended to read: 
5. Immunity. In the absence of fraud, malice or bad faith, any person, including, but 
not limited to, an insurer or authorized agency, that furnished information relating to 
suspected, anticipated or completed fraudulent insurance acts is not liable for any 
damages in any civil action for furnishing the information if that information is furnished 
to or received from an authorized agency. In the absence of fraud, malice or bad faith, an 
insurer that furnished information to or received information from another insurer for the 
purpose of detecting, prosecuting or preventing fraudulent insurance acts is not liable for 
any damages in any civil action for furnishing that information. 
Nothing in this 
subsection is intended to abrogate or modify in any way any common law or statutory 
privilege or immunity previously enjoyed by any person. 
Sec. 8. 24-A MRSA §2188 is enacted to read: 
§2188. Insurance Fraud Division 
1. Division established. The Insurance Fraud Division, referred to in this section as 
"the division," is established within the bureau. The division shall work in coordination 
with other bureau divisions and staff and other regulatory and law enforcement agencies 
to accomplish its duties. 
2. Duties. The duties of the division are, with respect to a fraudulent insurance act 
as defined in section 2186, a deceptive insurance practice under Title 17-A, section 
I-A or an insurance deception under Title 17-A, section 354-A, to: 
A. 
Initiate independent inquiries and conduct independent investigations when the 
division has cause to believe that a fraudulent insurance act, a deceptive insurance 
practice or an insurance deception may be or has been committed; 
B. 
Review reports or complaints of alleged fraudulent insurance acts, deceptive 
insurance practices and insurance deception from federal, state and local law 
enforcement and regulatory agencies, persons engaged in the business of insurance 
and the public to determine whether the reports required further investigation and to 
conduct these investigations; 
C. 
Conduct independent examinations of alleged fraudulent insurance acts, 
deceptive insurance practices and insurance deception and undertake independent 
studies to determine the extent of fraudulent and deceptive insurance acts and 
practices; 
D. 
Assist the superintendent in developing and implementing programs to prevent 
fraudulent insurance acts, deceptive insurance practices and insurance deception; 
E. 
Assist the Attorney General in the prosecution and prevention of insurance fraud, 
deceptive insurance practices and insurance deception; and 
F. 
Pr~ar~~eports regarding insurance fra.lliL deceRtivtinsuIanQ.~ practices and 
insurance deception required by law. 
3. Other law enforcement; regulatory authority. This section does not: 
A. Preempt the authority or relieve the duty of other law enforcement or regulatory 
agencies to investigate, examine and prosecute suspected violations of law; 
B. Prevent or prohibit a person from disclosing voluntarily information concerning 
insurance fraud, deceptive insurance practices or insurance deception to a law 
enforcement or regulatory agency other than the division; or 
. 
C. Limit the powers granted elsewhere by the laws of this State to the superintendent 
or the division to investigate and examine possible violations of law and to take 
appropriate action against wrongdoers. 
4. Confidentiality. Records prepared by, prepared at the direction of or kept in the 
custody of the division that contain investigative information are subject to the 
requirements of Title 16, section 614, except that the superintendent may share 
information with an authorized agency, as defined in section 2187. Except as provided in 
Title 16, section 614, or required for a criminal or civil proceeding, an authorized agency 
shall hold the information in confidence and may not release the information to any 
person other than an authorized agency. 
SUMMARY 
This bill establishes the Insurance Fraud Division within the Department of 
Professional and Financial Regulation, Bureau of Insurance. The bill requires insurers 
with knowledge or suspicion of fraudulent insurance acts to report those acts to the 
Bureau of Insurance. The bill provides for the confidentiality of records relating to 
insurance fraud investigations in a manner similar to the provision of confidentiality 
under current state law for investigative and intelligence information in the possession of 
other law enforcement entities. The bill does permit the Insurance Fraud Division to 
share investigatory information with certain national and international agencies. The bill 
also extends the immunity provision in current law to certain communications between 
insurers with respect to fraudulent insurance acts.