An Act To Provide for Prompt Resolution of Insurance Claims by Providing for a Direct Remedy by Consumers
Maine Legislature, Session 124, LD 1305
Committee: Insurance and Financial Services
Sponsors: BERRY, PERRY
Amends: 24-A MRSA §2164-D, 24-A MRSA §2454

MAINE STATE LEGISLATURE 
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124th'MAINE LEGISLATURE 
FIRST F...EGULAR SF,SSION-2009 
Legislative Document 
No.130S 
H.P.908 
House of Representatives, March 31, 2009 
An Act To Provide for Prompt Resolution of Insurance Claims by 
Providing for a Direct Remedy by Consumers 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
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Presented by Representative BERRY of Bowdoinham. 
Cosponsored by Senator PERRY of Penobscot. 
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1/1. /Iltl£~{ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People ofthe 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 'amended to read: 
·8. Insurer's duty. This section may not be construed as abridging an insurer's duty 
to its insured or altering policy provisions. This section may not be construed to create or 
imnlv a nrivate cause of action for violation of this section. 
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Sec. 2. 24-A MRSA§2164-D, sub-§10is enacted to read: 
to. Private action. A person injured by an unfair claim practice may bring an action 
in Superior Court or District Court pursuant to this subsection. 
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A. A person who has been injured by an insurer's use or employment of an unfair 
claim practice pursuant to this section may bring an action in Superior Court, either 
by an original complaint, counterclaim, cross-claim or 3rd-party action, for damages 
and such equitable relief, including an injunction,' as the court considers necessary 
. and proper. 
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30. 
(1) At least 30 days prior to the filing of any such action, a written demand for 
relief must be mailed or delivered to any prospective respondent. The demand 
must identify the claimant and reasonably describe the unfair claim practice and 
the injury suffered by the claimant. The demand requirements of this paragraph 
do not apply if the claim is asserted by way of counterclaim or cross-claim, or if 
the prospective respondent does not maintain a place of business or does not keep 
assets within this State; however,' that respondent may otherwise employ the 
provisions of this section by making a written offer of relief and paying the 
rejected tender to the court as soon as practicable after receiving notice of an 
action commenced under this subsection. 
(2) If a respondent receiving a demand for relief makes a wntten tender' of 
settlement within 30 days of the mailing or delivery of the demand for relief, and. 
that tender of settlement is rejected by the claimant, the respondent 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 
claimant. 
(3)' Except as provided in subparagraph (2), if the court finds for toe claimant, 
recovery is limited to the· amount of actual damages or $25, whichever is greater. 
If the court finds that the use or employment of the act or practice was a willful 
or knowing violation by the respondent or that the refusal to grant relief upon 
demand was made in bad faith with ImoWledge or reason to know that the act or 
practice complained of violated this section, the court shall award not less than 2 
times the actual damages nor more than 3 times the actual damages. For the 
purposes of this paragraph, the amount of actual damages to be multiplied by the 
court is 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. 
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(4) . In addition to the award under subparagraph (2) or (3), the court shall award 
such other equitable relief, including an injunction, as the court considers 
necessary and proper. 
B. A person may assert a claim under this section in a District Court by way of 
original complaint, counterclaim, cross-claim or3rd-party action for money damages 
only. All the provisions of paragraph A apply to a claim brought in -District Court, 
except that the District Court Judge may riot grant equitable relief. 
If the court finds in an action commenced under· this subsection that there has been a 
violation of this section, the court shall award the claimant, in addition to other relief 
provided for by tIus subsection and irrespective of the amouilt in controversy, reasonable 
attorney's fees and costs incurred in'connection with the action, 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 within 30 days of the mailing or delivery of 
the written demand for relief required by this subsection. 
A person entitled to bring an -action under this subsection is not required to initiate, 
'pursue or exhaust a remedy established by regulation, adnlinistraiive procedure, local, 
state or federal law or statute or the common law in order to bring an action under this 
section or to obtain injunctive relief or recover damages or attorney's fees or costs or 
other relief as provided in this subsection and the failure .to exhaust adnlinistrative 
remedies is not a defense to a proceeding under this subsection. 
Sec. 3. 24-A MRSA §2454 is enacted to read: 
§2454. Direct action against insurer 
1. Required insurance policy or contract provisions. A policy or contract· of 
property or casualty insurance may not be issued or delivered in this State unless it 
contains provisions to the effect that: 
-A. The insolvency or bankruptcy of the insured does not release the insurer from the 
payment of damages for injuries sustained or losses occasioned during the existence 
of the policy; 
B. A judgment rendered against the insured for which the insurer is liable and that 
has become executory is considered prima facie evidence of the insolvency of the 
. insured; and 
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C. An action may be maintained within the terms and linlits of the policy against the 
insurer by the injured person or the injured person's survivors or heirs. 
2. Right of direct action. An injured person or the survivors or heirs of that injured 
person may pursue a right of direct action against the insurer within the terms and linlits 
of the policy; this action may be brought against both the insured and insurer jointly. The 
action may be brought agaillst the insurer alone only when: 
A. The insured has been adjudged a bankrupt by a court ofcorilpetent jurisdiction or 
when proceedings to adjudge an insured a bankrupt have been commenced before a 
court of competent jurisdiction; 
B. The insured is insolvent; 
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13. 
c. Service of citation or other process carmot be made on the insured; 
D. 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. The insurer is an uninsured motorist carrier; or 
F. The insured is deceased. 
This right of direct action granted pursuant to this subsection exists regardless of whether 
the policy of insurance sued upon was written or delivered in this State and regardless of 
whether that policy contains a provision forbidding such direct action as long as the 
accident or injury occurred within this State. 
3. Effect on policy or contract. This section may not be construed to affect the 
provisions of a. policy or contract if those provisions are not in violation Of the laws of 
this State. An action brought under this section is subject to all of the lawful 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 terms and conditions of that policy or 
contract are not in violation of the laws of this State. 
SUMMARY 
This bill provides a private remedy for consumers who are victims of an unfairc1aim 
practice. This bill also allows an injured party to bring a direct a~tion against an insurer 
under certain circumstances. 
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