An Act To Pennit Senior Citizens To Designate a 3rd Party To Receive Notice of Cancellation of Insurance Policies
Maine Legislature, Session 125, LD 0313
Committee Amendment CA_A_S71 (Senate)
Amends: 24-A MRSA §2556, 24-A MRSA §2707-A

COMMITTEE AMENDMENT" A " to S.P. 93, L.D. 313, Bill, "An Act To Pennit 
Senior Citizens To Designate a 3rd Party To Receive Notice of Cancellation of Insurance 
Policies" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Permit Insured Persons To Designate a 3rd Party To Receive Notice of 
Cancellation of Medicare Supplement Policies and To Restrict the Cancellation of 
Certain Insurance Policies for Nonpayment of Premium Due to Cognitive 
Impairment or Functional Incapacity' 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 24-A MRSA §2556, sub-§§2 and 3, as enacted by PL 2007, c. 40, §l, 
are amended to read: 
2. 
Restrictions on lapse or termination; cognitive impairment or functional 
incapacity. Notwithstanding any other provision of this chapter, the bureau shall adopt 
rules to an insurer shall provide restrictions on cancellation, tennination or lapse of 
individual life insurance policies in accordance with this subsection to reduce the danger 
that a life insurance policyholder will lose life insurance coverage due to organic brain 
disease when the policyholder suffers from cognitive impainnent or functional incapacity 
and the loss of coverage is due to that cognitive impainnent or functional incapacity. 
Within 90 days after cancellation, tennination or lapse of coverage due to nonpayment of 
premium, a policyholder, a person authorized to act on behalf of the policyholder or a 
dependent of the policyholder covered under a life insurance policy may request 
reinstatement on the basis that the loss of coverage was a result of the policyholder's 
cognitive impainnent or functional incapacity. 
An insurer may request a medical 
demonstration that the policyholder suffered from cognitive impainnent or functional 
incapacity at the time of cancellation, tennination or lapse. The medical demonstration 
may be at the expense of the policyholder. A policy reinstated pursuant to this subsection 
must cover any loss or claim occurring from the date of the tennination, cancellation or 
lapse and must be issued without any evidence of insurability. Within 15 days after 
COMMITTEE AMENDMENT 
~ ." 
COMMITTEE AMENDMENT" Pc" to S.P. 93, L.D. 313 
request from an insurer, a policyholder of a policy reinstated pursuant to this subsection 
shall pay any unpaid premium from the date of the last premium payment at the rate that 
would have been in effect had the policy remained in force. If the premium is not paid as 
required, the policy may not be reinstated and the insurer is not responsible for claims 
incurred after the initial date of cancellation, termination or lapse of coverage. If an 
insurer denies a request for reinstatement, the insurer shall notify the policyholder that the 
policyholder may request a hearing before the superintendent. 
3. Rulemaking. The bureau may adopt rules to implement the requirements of this 
section. The rules adopted pursuant to this section subsection apply to all life insurance 
policies and riders delivered or issued for delivery, continued or renewed in this State. 
Rules adopted pursuant to this section subsection are routine technical rules as defined in 
Title 5, chapter 375, subchapter 2-A. 
Sec. 2. 24-A MRSA §2707-A, as enacted by PL 1989, c. 835, §2, is amended to 
read: 
§2707-A. Notification prior to cancellation; restrictions on lapse or termination due 
to cognitive impairment or functional incapacity 
The superintendent shall, by January 1, 1991, adopt rules to An insurer shall provide 
for notification of the insured person and another person, if designated by the insured, 
prior to cancellation of a health insurance policy for nonpayment of premiums, and to 
provide restrictions on cancellation when an insured person suffers from organic brain 
disease premium. 
Within 90 days after cancellation due to nonpayment of premium, a policyholder, a 
person authorized to act on behalf of the policyholder or a dependent of the policyholder 
covered under a health insurance policy or certificate may request reinstatement on the 
basis that the loss of coverage was the result of the policyholder's cognitive impairment or 
functional incapacity. 
An insurer may require a medical demonstration that the 
policyholder suffered from cognitive impairment or functional incapacity at the time of 
cancellation. If the medical demonstration is waived or substantiates the existence of a 
cognitive impairment or functional incapacity at the time of policy cancellation to the 
satisfaction of the insurer, the policy must be reinstated. The medical demonstration may 
be at the expense of the policyholder. 
A policy reinstated pursuant to this section must cover any loss or claim occurring 
from the date of the cancellation. Within 15 days after request from an insurer, a 
policyholder of a policy reinstated pursuant to this section shall pay any unpaid premium 
from the date of the last premium payment at the rate that would have been in effect had 
the policy remained in force. If the premium is not paid as required, the policy may not 
be reinstated and the insurer is not responsible for claims incurred after the initial date of 
cancellation. If an insurer denies a request for reinstatement, the insurer shall notify the 
policyholder that the policyholder may request a hearing before the superintendent. 
The superintendent may adopt rules to implement the requirements of this section. 
The rules may include, but are not limited to, definitions, minimum disclosure 
requirements, notice provisions and cancellation restrictions the right of reinstatement. 
Rules adopted pursuant to this section are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
COMMITTEE AMENDMENT 
t-.. .. ,. 
COMMITTEE AMENDMENT" A" to S.P. 93, L.D. 313 
Sec. 3. 24-A MRS A §2847-C, as enacted by PL 1991, c. 695, §5 and c. 824, Pt. 
A, §51, is amended to read: 
§2847-C. Notification prior to cancellation; restrictions on cancellation, termination 
or lapse due to cognitive impairment or functional incapacity 
The superintendent shall, by January 1, 1991, adopt rules to An insurer shall provide 
for notification of the insured person and another person, if designated by the insured, 
prior to cancellation of a health insurance certificate for nonpayment of premiums, and to 
provide restrictions on cancellation when an insured person suffers from organic brain 
disease premium. 
Within 90 days after cancellation due to nonpayment of premium, a policyholder, a 
person authorized to act on behalf of the policyholder or a dependent of the policyholder 
covered under a health insurance policy or certificate may request reinstatement on the 
basis that the loss of coverage was a result of the policyholder's cognitive impainnent or 
functional incapacity. 
An insurer may require a medical demonstration that the 
policyholder suffered from cognitive impainnent or functional incapacity at the time of 
cancellation. If the medical demonstration is waived or substantiates the existence of a 
cognitive impainnent or functional incapacity at the time of policy cancellation to the 
satisfaction of the insurer, the policy must be reinstated. The medical demonstration may 
be at the expense of the policyholder. 
A policy reinstated pursuant to this section must cover any loss or claim occurring 
from the date of the cancellation. Within 15 days after request from an insurer, a 
policyholder of a policy reinstated pursuant to this section shall pay any unpaid premium 
from the date of the last premium payment at the rate that would have been in effect had 
the policy remained in force. If the premium is not paid as required, the policy may not 
be reinstated and the insurer is not responsible for claims incurred after the initial date of 
cancellation. If an insurer denies a request for reinstatement, the insurer shall notify the 
policyholder that the policyholder may request a hearing before the superintendent. 
The superintendent may adopt rules to implement the requirements of this section. 
The rules may include, but are not limited to, definitions, minimum disclosure 
requirements, notice provisions and cancellation restrictions the right of reinstatement. 
Rules adopted pursuant to this section are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
The requirements of this section apply to all policies and certificates executed, 
delivered, issued for delivery, continued or renewed in this State. 
Sec. 4. 24-A MRS A §5016 is enacted to read: 
§5016. Notification prior to cancellation; restrictions on lapse or termination due to 
cognitive impairment or functional incapacity 
1. Notice of cancellation. An insurer that issues Medicare supplement policies shall 
provide notification to the insured person and another person, if designated by the 
insured, prior to cancellation of a Medicare supplement policy for nonpayment of 
premIUms. 
COMMITTEE AMENDMENT 
'tv .. " 
COMMITTEE AMENDMENT" A-" to S.P. 93, L.D. 313 
2. Right to reinstatement. Within 90 days after cancellation, termination or lapse 
of coverage due to nonpayment of premium, a policyholder, a person authorized to act on 
behalf of the policyholder or a dependent of the policyholder covered under the policy 
may request reinstatement of the policy on the basis that the loss of coverage was a result 
of the policyholder's cognitive impairment or functional incapacity. An insurer may 
require a medical demonstration that the policyholder suffered from cognitive impairment 
or functional incapacity at the time of cancellation, termination or lapse. If the medical 
demonstration is waived or substantiates the existence of a cognitive impairment or 
functional incapacity at the time of policy cancellation to the satisfaction of the insurer, 
the policy must be reinstated. The medical demonstration may be at the expense of the 
policyholder. 
A policy reinstated pursuant to this subsection must cover any loss or claim occurring 
from the date of the termination, cancellation or lapse and must be issued without any 
evidence of insurability. Within 15 days after request from an insurer, a policyholder of a 
policy reinstated pursuant to this subsection shall pay any unpaid premium from the date 
of the last premium payment at the rate that would have been in effect had the policy 
remained in force. 
If the premium is not paid as required, the policy may not be 
reinstated and the insurer is not responsible for claims incurred after the initial date of 
cancellation. If an insurer denies a request for reinstatement, the insurer shall notify the 
policyholder that the policyholder may request a hearing before the superintendent. 
3. Rules. The superintendent may adopt rules to implement the requirements of this 
section. Rules adopted pursuant to this subsection are routine technical rules as defined in 
Title 5, chapter 375, subchapter 2-A. The requirements of this section apply to all policies 
and certificates executed, delivered, issued for delivery, continued or renewed in this 
State. 
Sec. 5. Application. The requirements of this Act apply to all policies, contracts 
and certificates executed, delivered, issued for delivery, continued or renewed in this 
State on or after January 1, 2012. For purposes of this Act, all policies, contracts and 
certificates are deemed to be renewed no later than the next yearly anniversary of the 
contract date.' 
SUMMARY 
This amendment is the majority report of the committee and replaces the bill. The 
amendment extends the right for an insured person to designate a 3rd party to receive 
notice of cancellation of Medicare supplement insurance policies. The amendment also 
provides the ability to reinstate life, health and Medicare supplement insurance policies to 
reduce the danger that a policyholder who suffers from cognitive impairment or 
functional incapacity will lose coverage for nonpayment of premium due to that cognitive 
impairment or functional incapacity. The amendment removes provisions in the bill 
relating to long-term care insurance as the notice of cancellation provisions and 
provisions restricting cancellation due to cognitive impairment or functional incapacity 
are already required by rule. The provisions in the amendment related to life, health and 
Medicare supplement insurance are consistent with the restrictions on cancellation due to 
cognitive impairment or functional incapacity already in place with respect to long-term 
care lllsurance. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A" to S.P. 93, L.D. 313 
The provisions in the amendment apply to all insurance policies, contracts and 
certificates issued or renewed on or after January 1, 2012. 
FISCAL NOTE REQUIRED 
(See Attached) 
COMMITTEE AMENDMENT 
Approved: 04/24111 frac. 
LD313 
LR 864(02) 
An Act To Permit Senior Citizens To Designate a 3rd Party To Receive Notice of Cancellation of 
Insurance Policies 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment "A" CS-rJ) ') 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation are expected 
to be minor and can be absorbed utilizing existing budget resources. 
LR0864(02) - Fiscal Note - Page 1 of 1