An Act To Provide for Prompt Resolution of Insurance Claims
Maine Legislature, Session 123, LD 1389
Committee: Insurance and Financial Services
Sponsors: BRAUTIGAM
Amends: 24-A MRSA §2164-D, 24-A MRSA §2454

Legislative Document 
No. 1389 
H.P.981 
House of Representatives, March 13,2007 
An Act To Provide for Prompt Resolution of Insurance Claims 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative BRAUTIGAM of Falmouth. 
Printed on recyc.:led paper 
'If/~ frJ.1J?~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2164-D, sub-§8, as enacted by PL 1997, c. 634, Pt. A, §1, 
is repealed. 
Sec. 2. 24-A MRSA §2164-D, sub-§10 is enacted to read: 
10. Authority for private cause of action. A person who has been injured by an 
insurer's use of unfair claims practices in violation of this section or any rule adopted 
pursuant to subsection 7 may bring an action in accordance with this subsection. 
A. An action under this subsection may be filed in Superior Court for damages and 
equitable relief as provided in this subsection. An action may be filed as an original 
complaint, counterclaim, cross-claim or 3rd-party action. 
B. At least 30 days prior to the filing of any action under this subsection, the person 
filing the claim shall mail or deliver to the insurer a written demand for relief that 
identifies the insured or other 3rd-party claimant and reasonably describes the unfair 
claims practice relied upon and the injury suffered. 
C. An insurer that receives a written demand for relief under paragraph B who, 
within 30 days of the mailing or delivery of the demand for relief, makes a written 
tender of settlement that is rejected by the claimant may, in any subsequent action, 
file the written tender and an affidavit concerning its rejection and thereby limit any 
recovery to the relief tendered if the court finds that the relief tendered was 
reasonable in relation to the injury actually suffered by the petitioner. 
D. In all other cases, if the court finds for the petitioner, recovery must be in the 
amount of actual damages or $25, whichever is greater; or up to 3 but not less than 2 
times such amount if the court finds that the use or employment of the act or practice 
was a willful or knowing violation or that the refusal to grant relief upon demand was 
made in bad faith with knowledge or reason to know that the act or practice 
complained of violated this section. For the purposes of this subsection, the amount 
of actual damages to be multiplied by the court must be the amount of the judgment 
on all claims arising out of the same and underlying transaction or occurrence, 
regardless of the existence or nonexistence of insurance coverage available in 
payment of the claim. 
E. In addition to damages, the Superior Court may award such other equitable relief, 
including an injunction, as the court determines to be necessary and proper. 
F. The demand requirements of paragraph A do not apply if the claim is asserted by 
way of counterclaim or cross-claim, or if the insurer does not maintain a place of 
business or does not keep assets within the State, except that an insurer who does not 
maintain a place of business or keep assets within the State may employ the 
provisions of paragraph C by making a written offer of relief and paying the rejected 
tender into court as soon as practicable after receiving notice of an action commenced 
under this section. 
G. A person may file a claim under this subsection in District Court for monetary 
damages only and is not entitled to equitable relief. The District Court may award 
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double or treble damages, attorney's fees and costs, as provided in this subsection. 
The demand requirements and provision for tender of offer of settlement provided in 
paragraph C apply to any District Court action brought under this paragraph. 
H. If the court finds in any cause of action brought under this subsection that an 
insurer has committed an unfair claims practice in violation of this section, the 
claimant shall, in addition to other relief provided for in this subsection and 
irrespective of the amount in controversy, be awarded reasonable attorney's fees and 
costs, except that the court shall deny recovery of attorney's fees and costs that are 
incurred after the rejection of a reasonable written offer of settlement made pursuant 
to paragraph C. 
I. A person entitled to bring an action under this subsection may not be required to 
initiate, pursue or exhaust any remedy established by any state or federal law or 
common law or any rule or administrative procedure in order to bring an action under 
this subsection or to obtain injunctive relief or recover damages or attorney's fees or 
costs or other relief as provided in this subsection. The failure to exhaust 
administrative remedies is not an affirmative defense to any cause of action filed 
pursuant to this subsection. 
Sec. 3. 24-A MRSA §2454 is enacted to read: 
§2454. Direct action against insurer 
1. Contract provision; insolvency or bankruptcy of insured. A policy or contract 
of property or casualty insurance may not be issued or delivered in this State unless it 
contains a provision stating that the insolvency or bankruptcy of the insured does not 
release the insurer from the payment of damages for injuries sustained or loss occasioned 
during the existence of the policy and any judgment rendered against the insured for 
which the insurer is liable that has become executory is prima facie evidence of the 
insolvency of the insured. The policy or contract must also include a provision stating 
that an action may thereafter be maintained within the terms and limits of the policy by 
the injured person or the injured person's survivors or heirs against the insurer. 
2. Direct action. An injured person or the injured person's survivors or heirs, at 
their option, have a right of direct action against an insurer within the terms and limits of 
the policy and may bring an action against the insurer only or against both the insured and 
insurer jointly except that an action must be brought against an insurer only when: 
A. The insured has been adjudged a bankrupt by a court of competent jurisdiction or 
when proceedings to adjudge an insured a bankrupt have been commenced before a 
court of competent jurisdiction; 
B. The insured is insolvent; 
C. Service of citation or other process cannot be made on the insured; 
D. When the cause of action is for damages as a result of an offense or quasi-offense 
between children and their parents or between married persons; 
E. When the policy sued upon is for uninsured motorist coverage; or 
F. The insured is deceased. 
3. Application. The right of direct action authorized under this section applies 
whether or not the policy of insurance sued upon was written or delivered in this State 
and whether or not the policy contains a provision barring such direct action as long as 
the accident or injury occurred within this State. This section may not be construed to 
affect any provisions of a policy or contract if those provisions are not in violation of the 
laws of this State. 
4. Terms and conditions of policY apply. An action brought under this section is 
subject to all of the lawful terms and conditions of the policy or contract and the defenses 
that could be urged by the insurer to a direct action brought by the insured as long as the 
I 
terms and conditions of the policy or contract are not in violation of the laws of this State. 
SUMMARY 
This bill provides a private cause of action for consumers who are victims of unfair 
claims practices of insurance companies. 
The bill also amends the Maine Insurance Code to provide for direct actions against 
insurance companies in specific instances.