An Act To Update the Maine Insurance Code To 'Maintain Conformance with Uniform National Standards
Maine Legislature, Session 126, LD 1519
Committee Amendment CA_A_S184 (Senate)
Amends: 24-A MRSA §952

COMMITTEE AMENDMENT "A " to S.P. 574, L.D. 1519, Bill, "An Act To 
Update the Maine Insurance Code To 'Maintain Conformance with Uniform National 
Standards" 
Amend the bill in Part A in section 1 in subsection 5 by striking out all of paragraphs 
A and B (page 1, lines 14 to 27 in L.D.) and inserting the following: 
'A. Any information furnished pursuant to this subsection by or to the superintendent 
that has been designated confidential by the official, agency or other entity furnishing 
the information remains the property of the agency furnishing the information and 
must be held as confidential by the recipient of the information, except as authorized 
by the official, agency· or other entity furnishing the information to the 
superintendent, with prior notice to interested parties and consistent with other 
applicable laws. The authority of the superintendent, pursuant to paragraph B, to 
permit further disclosure to a 3rd party or to the public of information shared by the 
superintendent is subject to the same requirements and conditions that apply if the 
superintendent discloses the information directly to a 3rd party or to the public. 
B. 
The superintendent rna" share information, including otherwise confidential 
information, with the National Association of Insurance Commissioners or 
International Association of Insurance Supervisors, public officials of other 
jurisdictions and members of supervisory colleges in which the superintendent 
participates pursuant to section 222, subsection 7-B, agencies of the Federal 
Government or political subdivisions or other agencies of this State, if the recipient of 
the information agrees to maintain the same level of confidentiality as is available 
under Maine law and has demonstrated that it has the legal authority to do so.' 
Amend the bill in Part A in section 3 in subsection I-A in the 9th line (page 2, line 28 
in L.D.) by striking out the following: "holding company" and inserting the following: 
'insurance holding company system' 
Amend the bill in Part A in section 3 in subsection I-A in the 10th line (page 2, line 
in L.D.) by inserting after the fi)llowing: "verify" the following: 'the accuracy of 
COMMIT'TEE AMENDMENT 
COMMITIEE AMENDMENT "It" to S.P. 574, L.D. 1519 
Amend the bill in Part A in section 3 in subsection I-A in paragraph A in 
subparagraph (3) in the first line (page 2, line 41 in L.D.) by inserting after the following: 
"l!y" the following: 'its' 
Amend the bill in Part A in section 3 in subsection I-A in paragraph B in the 5th line 
(page 3, line lOin L.D.) by inserting after the following: 
"verify" the following: 'the 
accuracy of' 
Amend the bill in Part A in section 3 in subsection I-A in paragraph D in the 3rd line 
(page 3, line 24 in L.D.) by inserting after the following: "other" the following: 'lawful' 
Amend the bill in Part A in section 4 in paragraph B by striking out all of 
subparagraph (3) (page 4, lines 21 to 32 in L.D.) and inserting the following: 
'(3) The presumption of control contained in subparagraph (1) does not apply to 
a securities broker-dealer holding, in the usual and customary broker's function, 
less than 20% of the voting securities of another person.' 
Amend the bill in Part A in section 11 in subsection 4-C by inserting after paragraph 
D the following: 
'E. A broker-dealer that is exempt from the requirements of this section pursuant to 
subsection 2, paragraph B, subparagraph (3) shall disclose to the superintendent the 
identity of any person, or group of persons the broker-dealer knows or reasonably 
believes to be acting in concert. on whose behalf the broker-dealer knows or 
reasonably believes that the broker-dealer holds 5% or more of the voting securities 
of a domestic insurer or of any entity the broker-dealer knows or reasonably believes 
to be a controlling person of a domestic insurer. A broker-dealer shall disclose to the 
superintendent on request the beneficial owners of any securities held by the broker-
dealer of any entity that is, or that the superintendent believes might be or might 
become, a member of the insurance holding company system of an insurer subject to 
registration under subsection 8.' 
Amend the bill in Part A in section 17 in paragraph B in subparagraph (2) by striking 
out all of division (e) (page 14, lines 13 to 15 in L.D.) and inserting the following: 
'(e) All management and service contracts and all cost-sharing arrangements, 
other than cost allocation arrangements based upon generally accepted 
accounting principles;' 
Amend the bill in Part A in section 26 in subsection 13-A in paragraph A by striking 
out all ofthe first 41ines (page 21, lines 28 to 31 in L.D.) and inserting the following: 
'A. For purposes of this subsection, "holding company information" means any of the 
following documents, materials and other information if the document. material or 
other information has not specifically and expressly been designated as a public 
record by other applicable law:' 
Amend the bill in Part A in section 26 in subsection 13-A in paragraph A in 
subparagraph (5) in the 2nd line (page 22, line 4 in L.D.) by striking out the following: 
"2, paragraph B, subparagraph (3)" and inserting the following: '4-C, paragraph E' 
Amend the bill in Part A in section 26 in subsection 13-A in paragraph A by striking 
out all of subparagraph (10) (page 22, lines 15 to 18 in L.D.) and inserting the following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A"to S.P. 574, L.D. 1519 
'( 1 0) Infonnation obtained pursuant to this section from a jurisdiction other than 
this State to the extent that it is confidential under the laws of the jurisdiction in 
which it is nonnally maintained; and' 
Amend the bill in Part A in section 26 in subsection 13-A by striking out all of 
paragraphs Band C (page 22, lines 22 to 41 and page 23, lines 1 to 17 in L.D.) and 
inserting the following: 
'E. 
Except as otherwise provided by paragraphs D and E or specifically and 
expressly provided by other applicable law, holding company infonnation is 
confidential, is not a public record, is not subject to a subpoena, is not subject to 
discovery or admissible as evidence in any private civil action and may not be made 
public by the superintendent without prior written consent of the relevant insurer. 
The privilege provided under this paragraph does not supersede any other applicable 
privilege or confidentiality protection, nor does disclosure of confidential holding 
company infonnation to the superintendent constitute a waiver of any such privilege 
or protection. 
Neither the superintendent nor any person who received holding 
company infonnation from or under the authority of the superintendent under this 
section may be pennitted or required to testify in any private civil action concerning 
holding company infonnatioll that is confidential under this subsection. 
C. The superintendent may share holding company infonnation that is confidential 
under this subsection only in accordance with the requirements of section 216, 
subsection 5 and the following additional requirements. 
(1) The recipient of the infonnation must agree in writing to maintain the same 
level of confidentiality aE, is available under Maine law. This requirement may be 
satisfied through a multilateral confidentiality agreement to which both the 
superintendent and the recipient are parties, 
(2) The superintendent may not share confidential holding company infonnation 
with or through the National Association of Insurance Commissioners except in 
accordance with an infonnation-sharing agreement entered into in accordance 
with section 216, subsecLon 5, paragraph C. 
(3) If the recipient of the: information is in the United States, the recipient's state 
must have statutes or rules that expressly protect holding company infonnation at 
a level at least equivalent to the protections provided by this subsection and 
section 216, subsection 5. 
(4) ORSA-related infomlation subject to subsection 8, paragraph B-3 may, with 
the written consent of the insurer, be shared with a 3rd-party consultant under an 
agreement containing the conditions specified in section 216, subsection 5, 
paragraph C. In addition. any agreement for sharing ORSA-related information 
with the National Association of Insurance Commissioners or a 3rd-party 
consultant must further provide that: 
(a) 
The recipient of the information agrees in writing to maintain the 
confidentiality and privileged status of the ORSA-related infonnation and has 
verified in writing the legal authority to maintain confidentiality; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "1\" to S.P. 574, L.D. 1519 
(b) Any preauthorization granted under the agreement for further sharing of 
information provided by the superintendent must be limited to only the 
domiciliary regulators of other insurers in the same insurance holding 
company system; and 
ec) The National Association of Insurance Commissioners or a 3rd-party 
consultant may not store ORSA-related information shared pursuant to this 
subparagraph in a permanent database after the underlying analysis is 
completed.' 
Amend the bill in Part A in section 26 in subsection 13-A by striking out all of 
paragraph E (page 23, lines 21 to 26 in L.D.) and inserting the following: 
'E. 
Unless otherwise provided by applicable law, the superintendent may, after 
giving notice and opportunity for hearing to the insurer and any affiliates, controlling 
person or other persons that would be affected, order one or more items of holding 
company information, other than ORSA-related information, to be made a public 
record in its entirety or in redacted fonn if the superintendent determines that public 
disclosure will be in the interest of policyholders, shareholders or the public.' 
Amend the bill in Part A by inserting after section 33 the following: 
'Sec. A-34. Effective date. This Part takes effect January 1, 2014.' 
Amend the bill in Part B in section 4 in paragraph B-2 in subparagraph (3) by striking 
out the first 2 lines (page 27, lines 7 and 8 in L.D.) and inserting the following: 
'(3) The superintendent shall create and publish a list of jurisdictions that are 
qualified to serve as the domiciliary regulators of certified reinsurers.' 
Amend the bill in Part B in section 4 in paragraph B-2 in subparagraph (5) in division 
(b) by striking out all of subdivision (iii) (page 28, lines 13 to 24 in L.D.) and inserting 
the following: 
'(iii) If the certified reinsurer also maintains a multibeneficiary trust for 
obligations required to be fully secured under paragraph C or comparable 
laws of other states, the certified reinsurer shall maintain separate trust 
accounts for its obligations incurred under reinsurance agreements issued 
or renewed with reduced security as permitted by this paragraph or 
comparable laws of other United States jurisdictions and for its 
obligations that are required to be fully secured. The trust accounts may 
not be approved as qualifying security unless the reinsurer has bound 
itself, by the language of the trust and by agreement with the insurance 
regulator with principal oversight of each such trust account, to apply, 
upon termination of any such trust account, the remaining surplus of that 
trust to the extent necessary to fund any deficiency of any other such 
trust account.' 
Amend the bill in Part B in section 5 in paragraph C in subparagraph (3-A) by 
striking out all of division (a) (page 29, lines 35 to 40 in L.D.) and inserting the 
following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ';,4," to S.P. 574, L.D. 1519 
'(a) For reinsurance ceded under reinsurance agreements with an inception, 
amendment or renewal date on or after Atlgust 1, 1995 January 1, 1993, the 
trust must consist of a trusteed account in an amount at least equal to the 
group's respective underwriters' several liabilities attributable to reinsurance 
ceded by United States domiciled ceding insurers to any member underwriter 
that is a member of the group.' 
Amend the bill in Part B in section lOin §731-E by striking out all of subsection 2 
(page 32, lines 16 to 22 in L.D.) and inserting the following: 
'2. Diversification. An insurer shall diversify its reinsurance program to the extent 
reasonably necessary to avoid imprudent concentrations of risk. A domestic insurer shall 
notify the superintendent within 30 days after ceding to any single assuming insurer, or 
group of affiliated assuming insurers, more than 20% of the insurer's gross written 
premium in the prior calendar yea.r or after the insurer has determined that the reinsurance 
ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to 
exceed this limit.' 
Amend the bill in Part C by striking out all of section 3 (page 34, lines 1 to 21 in 
L.D.) and inserting the following: 
'Sec. C-3. 24-A MRSA §952, sub-§l, as amended by PL 1973, c. 585, §12, is 
further amended to read: 
1. 
The superintendent shall annually value, or cause to be valued, the reserve 
liabilities, hereinafter called reserves, for all outstanding life insurance policies and 
annuity and pure endowment contracts of every life insurer transacting business in this 
State in accordance with this subchapter, except that in the case of an alien insurer, such 
valuation .shalt must be limited to its United States business; and may certify the amount 
of any such reserves, specifying the mortality table or tables, rate or rates of interest and 
methods, net level premium method or other, used in the calculation of such reserves. In 
calculating such reserves, he the superintendent may use group methods and approximate 
averages for fractions of a year or otherwise. In lieu of the valuation of the reserves 
required of any foreign or alien insurer, he the superintendent may accept any valuation 
made, or caused to be made, by the insurance supervisory official of any state or other 
jurisdiction when such valuation complies with the minimum standard herein provided 
and if the official of such state or jurisdiction accepts as sufficient and valid for all legal 
purposes the certificate of valuation of the superintendent \vhen such certificate states the 
'laluationto ha'le been made in a specified manB:er according to \vhich the aggregate 
reserves vlould be at least as large! as if they had been computed in the manner prescribed 
by lavi of that state or jurisdiotiofl:. For policies and contracts issued before the operative 
date of the valuation manual or not addressed by the valuation manual, reserves must be 
detennined according to sections 953 to 958-A. For policies and contracts issued after 
the operative date of the valuation manual, reserves must be determined according to 
sections 959 and 960 and as specified by the valuation manual.' 
Amend the bill in Part C in section 5 in §952-A by striking out all of subsections I 
and 2 (page 34, lines 32 to 42 ~md page 35, lines I to 17 in L.D.) and inserting the 
following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A "to S.P. 574, L.D. 1519 
'I. General. A-hle An insurer doing business in this State subject to this subchapter 
shall anntlally appoint a qualified actuary, in accordance with any applicable 
requirements of the valuation manual or rules adopted by the superintendent: and 
annually submit the opinion of a qualified the appointed actuary as to whether the 
reserves and related actuarial items of that lif.e insurer held in support of the policies and 
contracts specified by the superintendent by rule are computed appropriately, are based 
on assumptions that satisfy contractual provisions, are consistent with prior reported 
amounts and comply with applicable laws of this State. +he Before the operative date of 
the valuation manual, the superintendent by rule shall define the specifics of thffi the 
opinion aHEl. On and after the operative date of the valuation manual, if the valuation 
manual has prescribed specific requirements applicable to the opinion, the opinion must 
comply with those requirements. The superintendent by rule may add any other items 
considered necessary to its the scope of the opinion. 
2. Actuarial analysis of reserves and assets supporting those reserves. A--lHe 
Except as otherwise authorized or required in accordance with rules adopted by the 
superintendent or applicable provisions of the valuation manual, an insurer, exeept as 
exempted by or pursuant to rule, subject to this subchapter shall include in the opinion 
required by subsection 1 an opinion of the same qualified appointed actuary as to whether 
the reserves and related actuarial items held in support of the policies and contracts 
specified by the superintendent by rule, when considered in light of the assets held by the 
insurer with respect to the reserves and related actuarial items, including, but not limited 
to, the investment earnings on the assets and the considerations anticipated to be received 
and retained under the policies and contracts, adequately provide for the insurer's 
obligations under the policies and contracts, including, but not limited to, the benefits 
under and expenses associated with the policies and contracts. 
The superintendent may provide by rule for a transition period for establishing any higher 
reserves that the qualified appointed actuary may consider necessary in the opinion 
required by this subsection.' 
Amend the bill in Part C in section 9 in §959 in subsection 1 by striking out all of the 
first paragraph (page 38, lines 2 to 5 in L.D.) and inserting the following: 
'I. General requirement. On and after the operative date of the valuation manual, 
reserves on policies and contracts of subject lines of insurance must be valued as follows, 
except as otherwise specifically provided in this section or in rules adopted by the 
superintendent:' 
Amend the bill in Part C in section 9 in §959 in subsection 7 in the 2nd line (page 39, 
line 32 in L.D.) by inserting after the following: "the change" the following: 'by rule' 
Amend the bill in Part C in section 9 in §960 by inserting after subsection 4 the 
following: 
'5. Applicability of rules. Rules adopted by the superintendent pursuant to this 
subchapter before January 1, 2014 do not apply to policies, contracts or actuarial opinions 
issued on or after the operative date of the valuation manual unless expressly made 
applicable by rule or order of the superintendent.' 
Amend the bill in Part C in section 9 in §962 in subsection 2 by striking out all of the 
first paragraph (page 42, lines 20 to 25 in L.D.) and inserting the following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'I\. "to S.P. 574, L.D. 1519 
'2. Confidentiality of information subject to this section. Except as provided in 
this subsection, all protected valuation information is confidential. must be kept 
confidential by the superintendent, is not a public record and is not subject to subpoena or 
discovery or admissible in evidence in any private civil action. The superintendent may 
use the documents, materials or other information in the furtherance of any regulatory or 
legal action brought as a part of the superintendent's official duties, including sharing the 
information on a confidential basis under section 216, subsection 5.' 
SUMMARY 
This amendment makes the fDllowing clarifying and technical changes to the bill. 
lOIn Part A, the amendment do,es the following. 
1. It clarifies that the sharing of confidential information by the Superintendent of 
Insurance may not be done without prior notice to interested parties and that the further 
disclosure of that information is subject to the same requirements and conditions that 
apply if the superintendent discloses the information directly. 
2. It clarifies that the superintendent has authority to order an insurer to produce 
records necessary to verify the accuracy of information required to be provided as part of 
an examination. 
3. It moves a provision from one section to another. 
4. It restores language deleted in the bill related to cost allocation arrangements. 
5. It clarifies the provision relating to confidentiality of insurance company holding 
system information so that the superintendent may not share information with the 
National Association of Insurance Commissioners except in 
accordance with 
information-sharing agreements. 
6. It adds an effective date ofJanuary 1,2014 to Part A. 
In Part B, the amendment makes several clarifying and grammatical changes. 
In Part C, the amendment clarifies the application of the valuation manual and rules 
adopted by the superintendent. 
FISCAL :\OTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 06/01113 
,;!;p'ac:.. 
LD 1519 
LR 570(02) 
An Act To Update the Maine Insurance Code To Maintain Conformance with Uniform National 
Standards 
Fiscal Note for Bill as Amended by Committee Amendment '/Jt'{s -t8q '\ 
Committee: Insurance and Financial Services 
J 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Fiscal Detail and Notes 
Additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation are expected 
to be minor and can be absorbed within existing budgeted resources. 
LR0570(02) - Fiscal Note - Pa2:e 1 of 1