An Act To Implement the Requirements of the Federal Nonadmitted and Reinsurance Reform Act of 2010
Maine Legislature, Session 125, LD 1352
Committee: Insurance and Financial Services
Sponsors: RICHARDSON, WHITTEMORE
Amends: 24-A MRSA §2002-A, 24-A MRSA §2003, 24-A MRSA §2016, 24-A MRSA §2101, 24-A MRSA §2113, 36 MRSA §191, 36 MRSA §2513, 36 MRSA §2519, 36 MRSA §2531, 36 MRSA §2532

Legislative Document 
No. 1352 
H.P. 993 
House of Representatives, March 29, 2011 
An Act To Implement the Requirements of the Federal Nonadmitted 
and Reinsurance Reform Act of 2010 
(EMERGENCY) 
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
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 Senator: WHITTEMORE of Somerset. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, the federal Nonadmitted and Reinsurance Reform Act of 2010, Title V, 
Subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public 
Law 111-203, which takes effect July 21, 2011, was enacted after the adjournment of the 
eligibility standards for surplus lines insurance and directs states to adopt a multistate 
premium tax allocation system before June 16, 2011; and 
Whereas, the implementation dates imposed by federal law are less than 90 days 
after the anticipated adjournment of the Legislature; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §2002-A, sub-§3, ¶C, as enacted by PL 1993, c. 153, §16, 
is amended to read: 
C.  Insurance on operations of railroads engaged in transportation in interstate 
commerce and their property used in such operations; or 
Sec. 2.  24-A MRSA §2002-A, sub-§3, ¶D, as enacted by PL 1993, c. 153, §16, 
is amended to read: 
D.  Insurance on aircraft owned or operated by manufacturers of aircraft or of aircraft 
operated in commercial interstate flight, or cargo of such aircraft, or against liability 
other than workers' compensation and employer's liability arising out of the 
ownership, maintenance or use of such aircraft.; or 
Sec. 3.  24-A MRSA §2002-A, sub-§3, ¶E is enacted to read: 
E.  Insurance sold to an exempt commercial purchaser in compliance with the 
requirements of the federal Nonadmitted and Reinsurance Reform Act of 2010, 
Public Law 111-203, Section 525. 
Sec. 4.  24-A MRSA §2003, sub-§2, as enacted by PL 1969, c. 132, §1, is 
amended to read: 
2.    To "export" means to place in an unauthorized insurer under this Surplus Lines 
Law insurance covering a subject of insurance resident, located or to be performed in 
Maine when the State has jurisdiction over the placement of coverage in accordance with 
the federal Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203, 
Section 522. 
Sec. 5.  24-A MRSA §2016, sub-§2, as enacted by PL 1991, c. 674, §1, is 
repealed. 
Sec. 6.  24-A MRSA §2101, sub-§2, ¶E, as amended by PL 1973, c. 625, §141, 
is further amended to read: 
E.  The employee, compensated on salary only, of a Maine employer who on behalf 
of the employer assists in the procurement or administration of insurance coverages 
on the property, risks and insurable interests of the employer.; or 
Sec. 7.  24-A MRSA §2101, sub-§2, ¶F is enacted to read: 
F.  Transactions outside this State arising from the unsolicited application of the 
insured, if the transaction is lawful in the jurisdiction in which it occurs and the 
applicable premium tax has been paid in compliance with Title 36, section 2513. 
Sec. 8.  24-A MRSA §2113, as corrected by RR 2001, c. 2, Pt. A, §39, is repealed. 
Sec. 9.  36 MRSA §191, sub-§2, ¶PP, as corrected by RR 2009, c. 2, §107, is 
amended to read: 
PP.  The disclosure to the Department of Conservation of information contained on 
the commercial forestry excise tax return filed pursuant to section 2726, such as the 
landowner name, address and acreage, to facilitate the administration of chapter 367; 
and 
Sec. 10.  36 MRSA §191, sub-§2, ¶QQ, as reallocated by RR 2009, c. 2, §108, is 
amended to read: 
QQ.  The disclosure of registration, reporting and payment information to the 
Department of Agriculture, Food and Rural Resources necessary for the 
administration of Title 32, chapter 28.; and 
Sec. 11.  36 MRSA §191, sub-§2, ¶RR is enacted to read: 
RR.  The disclosure to tax officials of other states, and to clearinghouses and other 
administrative entities acting on behalf of participating states, of information 
necessary for the administration of a multistate agreement entered into pursuant to 
section 2532. 
Sec. 12.  36 MRSA §2513, first ¶, as amended by PL 2009, c. 625, §9, is further 
amended to read: 
Every insurance company or association that does business or collects premiums or 
assessments including annuity considerations in the State, including surety companies 
and companies engaged in the business of credit insurance or title insurance, shall, for the 
privilege of doing business in this State and in addition to any other taxes imposed for 
that privilege, pay a tax upon all gross direct premiums including annuity considerations, 
whether in cash or otherwise, on contracts written on risks located or resident in the State 
for insurance of life, annuity, fire, casualty and other risks at the rate of 2% a year.  Every 
surplus lines nonadmitted insurer that does business or collects premiums in the State 
shall, for the privilege of doing business in this State and in addition to any other taxes 
imposed for that privilege, pay a tax upon all gross direct premiums, whether in cash or 
otherwise, on contracts written on risks located or resident in the State at the rate of 3% a 
year as provided in section 2531. The producer of those contracts must collect the tax and 
report and pay the tax to the State Tax Assessor as provided in section 2521-A, except 
that an insurance agency may elect to collect and pay the tax on surplus lines premiums 
on behalf of all of its employees who are surplus lines producers.  For purposes of this 
section, the term "annuity considerations" includes amounts paid to an insurance 
company for the purchase of a contract that may result in an annuity, even if the 
annuitization never occurs or does not occur until some time in the future and the 
amounts are in the meantime applied to an investment vehicle other than an annuity.  This 
section does not apply to mutual fire insurance companies subject to tax under section 
2517 or to captive insurance companies formed or licensed under Title 24-A, chapter 83 
or under the laws of another state. 
Sec. 13.  36 MRSA §2519, as repealed and replaced by PL 1973, c. 727, §9, is 
amended to read: 
§2519.  Ratio of tax on foreign insurance companies 
Any insurance company incorporated by a state of the United States or province of 
the Dominion of Canada whose laws impose upon insurance companies chartered by this 
State any greater tax than is herein provided shall pay the same tax upon business done by 
it in this State, in place of the tax provided in any other section of this Title.  If it is not 
paid as provided in section 2521-A, the Superintendent of Insurance shall suspend the 
right of said company to do business in this State.  Any insurance company incorporated 
by another country shall be is regarded for the purpose of this section as though 
incorporated by the state where it has elected to make its deposit and establish its 
principal agency in the United States.  For nonadmitted insurance premiums subject to 
section 2531, the rate applied pursuant to this section must be the highest rate that the 
state or province applies to nonadmitted insurance premiums taxed in that state or 
province. 
Sec. 14.  36 MRSA §2531 is enacted to read: 
§2531.  Taxation of nonadmitted insurance coverage 
1.  Generally.  All gross direct insurance premiums and annuity considerations paid 
to insurers that do not have certificates of authority to do business in this State, issued by 
the Superintendent of Insurance pursuant to Title 24-A, are subject to taxation in 
accordance with this section if this State is the insured's home state, as defined in the 
federal Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203, Section 
527.  This section does not apply to reinsurance premiums paid by an authorized 
domestic insurer. 
2.  Rate and incidence of tax.  Except as otherwise provided in section 2519 or 
2532, the rate of taxation is 3% of the premiums subject to tax under this section.  For all 
coverage placed in accordance with Title 24-A, chapter 19, the tax must be paid by the 
surplus lines producer.  For all other nonadmitted insurance, the tax must be paid by the 
insured. 
3.  Returns.  Except as otherwise provided in accordance with a multistate agreement 
entered into pursuant to section 2532, every producer holding surplus lines authority in 
this State shall file a return and pay the tax due in accordance with section 2521-A and 
every insured subject to tax in accordance with this section shall file a return and pay the 
tax due subject to the same requirements as provided in section 2521-A.  An insurance 
agency may elect to collect and pay the tax on surplus lines premiums on behalf of all of 
its employees who are surplus lines producers and file a single return. 
Sec. 15.  36 MRSA §2532 is enacted to read: 
§2532.  Authority to enter into multistate agreement 
The assessor may enter into a multistate agreement, in accordance with the federal 
Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203, Section 521, for 
the reporting of nonadmitted insurance premiums and the collection and allocation of 
nonadmitted insurance taxes.  For any nonadmitted insurance premiums that are subject 
to taxation by this State and interstate allocation of taxes in accordance with the federal 
Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203, Section 521, 
the rate of taxation on each participating state's share of the premium must be that state’s 
applicable nonadmitted insurance premium tax rate. 
Sec. 16.  Effective date.  This Act takes effect July 21, 2011, except that that 
section of this Act that enacts the Maine Revised Statutes, Title 36, section 2532 takes 
effect when approved. 
Sec. 17.  Application.  This Act applies to taxes on all premiums received on or 
after July 1, 2011. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved, except as otherwise indicated. 
SUMMARY 
This bill amends surplus lines eligibility standards and nonadmitted insurance 
premium tax laws to conform to the requirements of the federal Nonadmitted and 
Reinsurance Reform Act of 2010.  It authorizes the State Tax Assessor to enter into a 
multistate agreement as directed by federal law; transfers the administration of self-
procured insurance premium taxes from the Department of Professional and Financial 
Regulation, Bureau of Insurance to the Department of Administrative and Financial 
Services, Maine Revenue Services; and makes conforming technical changes to other 
provisions of the surplus lines insurance and premium tax laws.