An Act To Amend the Laws Governing Captive Insurance Companies
Maine Legislature, Session 125, LD 0783
Committee: Insurance and Financial Services
Sponsors: RICHARDSON, RAYE, CUSHING, COURTNEY, SULLIVAN, WHITTEMORE
Amends: 24-A MRSA §6702, 24-A MRSA §6704, 24-A MRSA §6706, 24-A MRSA §6708, 24-A MRSA §6718, 24-A MRSA §6719

Legislative Document 
No. 783 
H.P. 590 
House of Representatives, March 1, 2011 
An Act To Amend the Laws Governing Captive Insurance 
Companies 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative RICHARDSON of Warren. 
Cosponsored by President RAYE of Washington and 
Representative: CUSHING of Hampden, Senators: COURTNEY of York, SULLIVAN of 
York, WHITTEMORE of Somerset. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §6702, sub-§4, as amended by PL 2009, c. 335, §9, is 
further amended to read: 
4.  License.  If the superintendent is satisfied that the documents and statements filed 
by the captive insurance company under subsections 2 and 3 comply with this chapter, 
the superintendent may grant a license authorizing it to do insurance business.  A captive 
insurance company shall comply with all applicable federal and state laws relating to the 
risks insured pursuant to the license granted by the superintendent. In the event of conflict 
between other state insurance laws and this chapter, the provisions of this chapter control. 
The state insurance laws to which captive insurance companies are not subject include 
but are not limited to the provisions in section 2808-B concerning guaranteed issue and 
community rating requirements and any other group insurance laws in this Title other 
than those of this chapter. 
Sec. 2.  24-A MRSA §6704, sub-§1, ¶B, as amended by PL 2009, c. 335, §10, is 
further amended to read: 
B.  In the case of an association captive insurance company, not less than $750,000 
nor more than $3,000,000;  
Sec. 3.  24-A MRSA §6706, sub-§4, as amended by PL 2009, c. 335, §12, is 
further amended to read: 
4.  Applicability of chapter 47.  To the extent not inconsistent consistent with this 
chapter, a captive insurance company is subject to the procedures applicable to domestic 
insurers pursuant to chapter 47 except that, if the surviving entity after a merger, 
consolidation, conversion or mutualization is a captive insurance company, a captive 
insurance company is subject to this chapter.  With respect to mergers, consolidations, 
conversions and mutualizations, the superintendent, in the superintendent's discretion, 
may: 
A.  Waive any public hearing requirement; 
B.  Permit an alien insurer as a party to a merger as long as the requirements for a 
merger between a captive insurance company and a foreign insurer apply. For the 
purposes of this paragraph, an alien insurer must be treated as a foreign insurer and 
the jurisdiction of the alien insurer is considered a state; or 
C.  Approve the conversion of a captive insurance company organized as a stock 
insurer to a nonprofit corporation with one or more members or a limited liability 
company. 
Sec. 4.  24-A MRSA §6708, sub-§1, as enacted by PL 1997, c. 435, §1, is 
amended to read: 
1.  Powers, authorities and duties of superintendent.  The powers, authorities and 
duties relating to examinations and investigations are vested in and imposed upon the 
superintendent pursuant to chapter 3 are extended to and imposed upon the 
superintendent in respect to examinations of captive insurance companies to the same 
extent they would otherwise be applicable with respect to domestic insurers in accordance 
with the provisions of this chapter. 
Sec. 5.  24-A MRSA §6718, as enacted by PL 1997, c. 435, §1, is amended to 
read: 
§6718.  Rules 
The superintendent may adopt rules to implement this chapter.  Rules adopted 
pursuant to this chapter are routine technical major substantive rules as defined in Title 5, 
chapter 375, subchapter II-A 2-A. 
Sec. 6.  24-A MRSA §6719, as enacted by PL 1997, c. 435, §1, is amended to 
read: 
§6719.  Laws applicable 
An insurance law of this State, other than described or referenced in this chapter, 
does not apply to a captive insurance company. This exclusion must be strictly construed 
so as to further the public policy to provide an alternative means of securing coverage 
independent of the requirements of this Title. 
SUMMARY 
This bill amends the chapter of the Maine Insurance Code governing captive 
insurance companies to make clear that in the event of any conflict between the 
provisions of other state insurance laws and the provisions of the laws governing captive 
insurance companies, the provisions of the captive insurance company laws control. 
This bill places a cap on the unimpaired paid-in capital and surplus of an association 
captive insurance company and provides that rules adopted by the Superintendent of 
Insurance to implement the laws governing captive insurance companies are major 
substantive rules.