An Act Relating to Self-insurance
Maine Legislature, Session 124, LD 1004
Committee Amendment CA_A_H287 (House)
Amends: 24-A MRSA §601

COMMITTEE AMENDIvIENT 'R" to H.P. 692, L.D. 1004, Bill, "An Act Relating 
to Self-insurance" 
Amend the bill by inserting after the enacting clause and before section 1 the 
following: 
'Sec. 1. 24-A MRSA §601, sub-§16, as amended by PL 2003, c. 203, §1, is 
further amended to read: 
16. Self-insurance authorization. Fees applicable to each self-insurer, individual or 
group, seeking authorization or authorized to operate a workers' compensation self-
insurance plan, and each self-insurance reinsurance account and each protected cell of a 
self-insurance reinsurance account, may not exceed: 
A. For filing application for initial authorization, including all documents submitted 
as part of the application~ $1,000; 
A-I. For filing application for authority to self-insure under Title 39-A, section 403, 
subsection 16, including all documents submitted as part of the application~ $500; 
B. Authorization For authorization and each annual continuation~ $300; and 
C. ¥iJ:.i.H.g For filing a yearly report of i! self-insurer~ $100. 
If a self-insurer terminates the plan or otherwise does not continue to self-insure, the fee 
applicable to filing of yearly reports must apply to that period in which the making of 
these reports is mandated.' 
Amend the bill in section 1 in subsection 4-A by striking out all of the first sentence 
(page 1, lines 4 to 9 in L.D.) and inserting the following: 'As an alternative to obtaining a 
reinsurance contract providing coverage against losses arising out of one occurrence, a an 
individual or group self-insurer authorized under this section may, with the approval of 
the Superintendent of Insurance, participate in' a group self-insurance reinsurance 
account, referred to in this subsection as "an account," as provided in this subsection. A 
group self-insurer authorized under the laws of another state may participate in an 
account through a protected cell arrangement as provided in paragraph L.' 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A " 
to H.P. 692, L.D. 1004 
Amend the bill in section 1 in subsection 4-A by striking out all of paragraph A (page 
1, lines 17 to 42 and page 2, lines 1 to 4 in L.D.) and inserting the following: 
'A. Any A group self-insurer that is subject to joint and several liability pursuant to 
subsection 4, paragraph F, a group self-insurer authorized under the laws of another 
state and that executes an agreement that its members will be jointly and severally 
liable in accordance with the provisions of paragraph L or an individual self-insurer 
authorized under this section that executes an agreement to be responsible for 
contingent assessment liability in accordance with the provisions of paragraph F may 
apply to reinsure through an account. 
(1) 
Upon the petition of 4 or more authorized group self-insurers, the 
Superintendent of Insurance may approve an account for the deposit of funds in 
lieu of reinsurance. 
(2) The account must indemnify its participating gF9tl13 self-insurer members for 
claims incurred during the account's operation. The purpose of the account is to 
accumulate funds to provide coverage against losses arising out of one 
occurrence in excess of $500;000 or such other amounts as may be permitted or 
required for particular members consistent with the plan of operation established 
pursuant to paragraph B. 
(3) A gF9tl13 self-insurer is deemed to be a member of the account for reinsurance 
coverage for purposes of a claim if the gF9tl13 self-insurer is a member of the 
account when an injury occurs or a covered occupational disease loss is incurred. 
(4) A gF9tl13 self-insurer that reinsures through an account shall continue to make 
payments into that account in accordance with the plan of operation established 
pursuant to paragraph B. 
(5) 
A gF9tl13 self-insurer's participation in an account is considered as a 
component of the gF9tl13 self-insurer's renewal application. A gF9tl13 self-insurer's 
. membership in an account is considered adequate protection against losses 
arising out of a single occurrence unless the Superintendent of Insurance 
determines, after considering the financial condition and catastrophic loss 
exposure of both the gF9tl13 self-insurer and the account, that it is necessary to 
maintain additional reinsurance protection, maintain a lower self-insured 
retention level or provide some other form of additional security, singly or in 
combination.' 
Amend the bill in section 1 in subsection 4-A by striking out all of paragraph F (page 
4, lines 33 to 41 in L.D.) and inserting the following: 
'F. A gF9tl13 self-insurer's liability for participating in an account is governed by this 
paragraph. 
(1) 
Each participating gF9tl13 self-insurer in an account has a contingent 
assessment liability in accordance with the plan of operation established pursuant 
to paragraph B for payment of claims and expenses incurred while a member of 
the account and must execute an agreement acknowledging that it is responsible 
for the prompt payment of all assessments necessary to ensure that the account is 
COMMI 
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COMMITTEE AMENDMENT "A "to H.P. 692, L.D. 1004 
fully funded and that, if any participant in the account fails to pay an assessment 
when due for any reason, the remaining participants are liable for the shortfall. 
(2) Each contract or other document certifying participation in the account, 
issued by the account, must contain a statement of the contingent liability of 
participating gFetlf} self-insurers.' 
Amend the bill in section 1 in subsection 4-A by inserting after paragraph K the 
following: 
'L. 
With the approval of the Superintendent of Insurance, a self-insurance 
reinsurance account may create one or more protected cells under its plan of 
operation for the purpose of reinsuring obligations of group self-insurers that are 
organized under the laws of another state. Any protected cell and all participating 
group self-insurers and their member employers are subject to the jurisdiction and 
oversight of the Superintendent of Insurance with respect to all matters relating to 
their participation on the account. 
(1) Any out-of-state self-insurer that participates in the account may do so only 
through participation in a protected cell. An employer or group authorized by the 
Superintendent of Insurance to self-insure its Maine liabilities pursuant to this 
section is considered an out-of-state insurer to the extent that it is reinsuring out-
of-state liabilities beyond the scope of its Maine self-insurance plan. 
(2) The establishment of protected cells under this paragraph is a pilot project, 
limited to at most 2 protected cells, and approval of a protected cell or of a group 
self-insurer to participate in a protected cell is at the discretion of the 
Superintendent of Insurance. The Superintendent of Insurance may adopt rules 
pursuant to paragraph J to establish the terms and conditions of the pilot project, 
including criteria for the minimum and maximum size of a protected cell. 
(3) 
A separate account must be established for each protected cell. 
All 
contributions from participants in a protected cell must be deposited into the 
protected cell account. Funds in a protected cell account may be used only for 
the payment of claims and expenses associated with that protected cell, which 
may include a reasonable administrative fee paid periodically into the general 
account. Notwithstanding any other provision of this subsection, participants in a 
protected cell are not liable for claims or expenses of any other protected cell or 
of the general account, and the general account is not liable for the claims of any 
protected cell or any expenses associated with such claims or otherwise 
specifically attributable to the protected cell. 
(4) The minimum funding level for any protected cell may not be lower than the 
minimum funding level, calculated in accordance with the plan of operation and 
subject to paragraph E, that would apply to the general account with the same 
loss exposure and duration of operation. If the protected cell account falls short 
of the minimum funding level at any time, the reinsurance account must assess all 
protected cell participants. If a paIticipating group self-insurer fails to pay any 
assessment in full when due, the reinsurance account must assess the group's 
member employers. All assessments are enforceable by the Superintendent of 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 692, L.D. 1004 
Insurance through an adjudicatory proceeding under the Maine Administrative 
Procedure Act or through an action in the Superior Court. 
(5) Each protected cell must have its own board of directors, at least 2/3 of 
whom must be chosen by the protected cell's participants. The plan of operation 
shall provide for a reasonable allocation of authority between the reinsurance 
account's board of directors and the protected cell's board of directors. 
(6) No later than April 1st of each year, each reinsurance account with one or 
more protected cells must pay a regulatory assessment to the Bureau of Insurance 
from each protected cell account in the amount of 111100 of 1 % of the total 
standard reinsurance premium for the preceding calendar year for all participants 
in the protected cell for the level of coverage provided by the reinsurance 
account. 
(7) All groups participating in a protected cell must provide the reinsurance 
account and the Superintendent of Insurance with financial and actuarial 
information sufficient to evaluate loss exposure and financial condition. 
All 
information provided to the superintendent by protected cell participants and their 
member employers is confidential pursuant to subsection 15. All protected cell 
participants and their member employers must authorize their domiciliary 
regulator to provide any information requested by the superintendent, which is 
confidential to the extent provided in Title 24-A, section 216, subsection 5. 
(8) In evaluating the risk exposure of an out-of-state group self-insurer and in 
determining whether groups from different states may participate in the same 
protected cell, the reinsurance account and the Superintendent of Insurance shall 
consider any relevant differences in the states' regulatory frameworks for group 
self-insurance and in their workers' compensation benefit laws. 
(9) A group self-insurer may not become a participant in a protected cell unless 
the group and all of its member employers have provided written 
acknowledgments to the Superintendent of Insurance that they are jointly and 
severally liable for the obligations of the protected cell and are subject to the 
jurisdiction of the superintendent and courts of the State for the enforcement of 
those obligations. 
(10) Any disputes between self-insured members, the self-insurance reinsurance 
account and any protected cell, including but not limited to any dispute arising 
out of or relating to any enforcement order or mechanism imposed by the 
Superintendent of Insurance, must be resolved in this State and pursuant to the 
laws of this State.' 
Amend the bill by inserting at the end before the summary the following: 
'Sec. 2. Appropriations and allocations. The following appropriations and 
allocations are made. 
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF 
Insurance - Bureau of 0092 
COMMITTEE AMENDMENT 
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COMMIITEE AMENDMENT "A " 
to H.P. 692, L.D. 1004 
Initiative: Allocates funds for the costs of one new Senior Insurance Examiner position 
and other related costs to oversee workers' compensation self-insurance reinsurance 
accounts that include the pa~icipation of group self-insurers authorized under the laws of 
other states. 
OTHER SPECIAL REVENUE FUNDS 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
2009-10 
1.000 
$60,447 
$8,388 
$68,835 
2010-11 
1.000 
$85,245 
$6,897 
$92,142 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
S~y 
This amendment makes changes to the laws relating to group self-insurance 
reinsurance accounts to: 
1. Authorize individual self-insurers authorized under Maine law to participate in an 
account; and 
2. Authorize the formation of a protected cell mechanism under which group self-
insurers authorized under the laws of other states may participate in an account, similar to 
the structure currently provided for in the National Association of Insurance 
Commissioners Protected Cell Company Model Act and in the Maine Revised Statutes, 
Title 24-A, section 784-A. 
The amendment also adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/06/09 .?Hac 
LD 1004 
LR 1192(02) 
An Act Relating to Self-insurance 
Fiscal Note for Bill as Amended by Committee Amendment "A" 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
2009-10 
2010-11 
Projections 
2011-12 
Appropriations/Allocations 
Other Special Revenue Funds 
$68,835 
$92,142 
$97,256 
Fiscal Detail and Notes 
Projections 
2012-13 
$102,678 
Provides an Other Special Revenue Funds allocation of $68,835 in 2009-10 and $92,142 in 2010-11 to the Bureau of 
Insurance in the Department of Professional and Financial Services for the costs of one new Senior Insurance 
Examiner position and other related costs for the bureau to oversee workers' compensation self-insurance reinsurance 
accounts that include the participation of group self-insurers authorized under the laws of other states. 
LRI192(02) - Fiscal Note - Page 1 of 1 
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