An Act To Update the Maine Insurance Code To Maintain Conformance with Uniform National Standards
Maine Legislature, Session 126, LD 1519
Committee: Insurance and Financial Services
Sponsors: WOODBURY, GRATWICK, WALLACE
Amends: 24-A MRSA §216, 24-A MRSA §222, 24-A MRSA §423-F, 24-A MRSA §1157, 24-A MRSA §4356, 24-A MRSA §601, 24-A MRSA §731-B, 24-A MRSA §731-D, 24-A MRSA §731-E, 24-A MRSA §951, 24-A MRSA §951-A, 24-A MRSA §952, 24-A MRSA §952-A, 24-A MRSA §952-B, 24-A MRSA §955, 24-A MRSA §956, 24-A MRSA §992, 24-A MRSA §2532-A, 24-A MRSA §6451, 24-A MRSA §6453, 24-A MRSA §421, 24-A MRSA §4435, 24-A MRSA §6095, 24-A MRSA §6098, 24-A MRSA §6718

Legislative Document 
No. 1519 
S.P. 574 
In Senate, May 8, 2013 
An Act To Update the Maine Insurance Code To Maintain 
Conformance with Uniform National Standards 
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. 
DAREK M. GRANT 
Secretary of the Senate 
Presented by Senator WOODBURY of Cumberland. 
Cosponsored by Senator GRATWICK of Penobscot and 
Representative: WALLACE of Dexter. 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  24-A MRSA §216, sub-§5, as amended by PL 1999, c. 184, §19, is 
repealed and the following enacted in its place: 
5.    In order to assist the superintendent in the regulation of insurers in this State, it is 
the duty of the superintendent to maintain as confidential a document or information 
received from 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 document or the information has been provided to the 
superintendent with notice that it is confidential under the laws of the jurisdiction that is 
the source of the document or information. 
A.  Any information furnished pursuant to this subsection by or to the superintendent 
that has been designated confidential by the official or agency 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 or agency furnishing the information. 
B.  The superintendent may 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 other 
jurisdiction, political subdivision or agency 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. 
C.  The superintendent may enter into one or more written agreements with the 
National Association of Insurance Commissioners governing sharing and using 
information under this subsection that: 
(1)  Specify procedures and protocols regarding the confidentiality and security 
of information shared with the National Association of Insurance Commissioners 
and its affiliates and subsidiaries pursuant to this paragraph, including procedures 
and protocols for sharing by the National Association of Insurance 
Commissioners with other state, federal or international insurance regulators; 
(2)  Specify that ownership of information shared with the National Association 
of Insurance Commissioners and its affiliates and subsidiaries pursuant to this 
paragraph remains with the superintendent and that the use of information by the 
National Association of Insurance Commissioners is subject to the direction of 
the superintendent; 
(3)  Require prompt notice to be given by the National Association of Insurance 
Commissioners to any insurer whose confidential information is in the possession 
of the National Association of Insurance Commissioners pursuant to this 
paragraph when that information is the subject of a request or subpoena for 
disclosure or production; and 
(4)  Require the National Association of Insurance Commissioners and its 
affiliates and subsidiaries to consent to intervention by an insurer in any judicial 
or administrative action in which the National Association of Insurance 
Commissioners and its affiliates and subsidiaries may be required to disclose 
confidential information about the insurer shared with the National Association 
of Insurance Commissioners and its affiliates and subsidiaries pursuant to this 
paragraph. 
D.  This subsection does not alter prohibitions or restrictions applicable to ex parte 
contacts in the course of an adjudicatory proceeding in which a state agency is a 
party. 
E.  For purposes of this subsection, "other agencies of this State" includes bureau 
personnel and consultants designated as serving in an advocacy capacity in an 
adjudicatory proceeding before the superintendent. 
Sec. A-2.  24-A MRSA §222, sub-§1, as repealed and replaced by PL 1975, c. 
356, §1, is repealed. 
Sec. A-3.  24-A MRSA §222, sub-§1-A is enacted to read: 
1-A.  Examination.  For purposes of ascertaining compliance with law, or 
relationships and transactions between any person as defined hereafter and any insurer or 
proposed insurer subject to this section, the superintendent may as often as the 
superintendent determines to be advisable examine the accounts, records, documents and 
transactions pertaining to or affecting the insurance affairs or proposed insurance affairs, 
or transactions of the insurer or proposed insurer as may be in the possession of any 
holding company, its subsidiaries or affiliates as is necessary to ascertain the financial 
condition, including the enterprise risk to the insurer by the ultimate controlling party, or 
legality of conduct of the insurer or proposed insurer or the holding company as a whole 
or any combination of entities within the insurance holding company system and to verify 
any information provided or required to be provided to the superintendent pursuant to this 
section. 
A.  The superintendent's investigatory and examination authority under this 
subsection extends to the examination of: 
(1)  Any business entity structured to hold the stock of an insurance company, or 
person holding the shares of voting stock or policyholder proxies of an insurer as 
voting trustee or otherwise, for the purpose of controlling the management 
thereof; 
(2)  Any insurance producer, adjuster or consultant or other insurance or 
reinsurance representative or intermediary or any person acting as or purporting 
to be any of the foregoing; 
(3)  Any person having a contract giving that person by terms or in fact the 
exclusive or dominant right to manage or control the insurer; and 
(4)  Any person in this State engaged in or proposing to be engaged in or acting 
as or purporting to be so engaged or proposing to be engaged in the business of 
insurance or in this State assisting in the promotion, formation or financing of an 
insurer or insurance holding corporation or corporation or other group financing 
an insurer or the production of its business. 
B.  Subject to the limitations contained in this subsection and in addition to the 
powers that the superintendent has under section 221 and sections 223 to 228 relating 
to the examination of insurers, the superintendent may order an insurer registered 
under subsection 8 to produce records, books or papers in the possession of the 
insurer or affiliates as may be necessary to verify the information required to be 
provided to the superintendent under this section and any additional information 
pertinent to transactions between the insurer and affiliates.  The books, records, 
papers and information are subject to examination in the same manner as prescribed 
in this chapter for an examination conducted under section 221, except that expenses 
incurred by the superintendent in examining an affiliate that is not an insurer must be 
borne by the registered insurer subject to the limitations of section 228, subsection 1.  
The superintendent may issue subpoenas, administer oaths and examine any person 
under oath for purposes of determining compliance with this subsection. 
C.  A member of an insurer's insurance holding company system shall comply fully 
and accurately with a request by the insurer to provide it with information necessary 
to respond to an examination request by the superintendent pursuant to this section. 
D.  The superintendent may order an insurer registered under subsection 8 to produce 
information not in the possession of the insurer if the insurer can obtain access to the 
information pursuant to contractual relationships, statutory obligations or any other 
method.  If the insurer cannot obtain the information requested by the superintendent, 
the insurer shall provide the superintendent a written objection with a detailed 
explanation of the reason that the insurer cannot obtain the information and the 
identity of the holder of the information.  It is a violation of this section to submit an 
objection to production of information without a reasonable basis or to fail to produce 
information on the basis of an objection that the superintendent has denied after 
notice and opportunity for hearing. 
Sec. A-4.  24-A MRSA §222, sub-§2, ¶B, as amended by PL 1999, c. 113, §8, is 
further amended to read: 
B.  Control.  
(1)  'Control,' including 'controlling,' 'controlled by' and 'under common control 
with,' "Control," including "controlling," "controlled by" and "under common 
control with," means the possession, direct or indirect, of the power to direct or 
cause the direction of the management and policies of a person, whether through 
the ownership of voting securities, by contract other than a commercial contract 
for goods or nonmanagement services, or otherwise, unless the power is solely 
the result of an official position with or a corporate office held by the person.  
Control is presumed to exist if any person is the beneficial owner of 10% or more 
of the voting securities or guaranty capital shares, if applicable, or voting rights 
in the case of mutual or reciprocal insurers, or guaranty capital shares if a mutual 
insurer has established a guaranty fund, has the right to cast 10% or more of the 
votes in the election of directors or other governing body of any other person.  A 
beneficial owner may rely in determining the amount of voting securities of any 
person outstanding upon information set forth in that person's most recent 
quarterly or annual report filed with the Securities and Exchange Commission 
pursuant to the Exchange Act unless the beneficial owner knows or has reason to 
believe that the information contained in the quarterly or annual report is 
inaccurate.  Two or more domestic mutual insurance companies that have 
restricted their licensed territories to the State are not considered subject to this 
section merely because those insurance companies commonly share facilities, 
incurred expenses, or personnel services, or otherwise utilize cost allocations 
based on generally accepted accounting principles including pro rata sharing of 
assumed risks.  A person may have more than one controlling person, even if 
those controlling persons are not acting in concert. 
(2)  Notwithstanding the presumption of control contained in subparagraph (1), 
the superintendent, upon application of the insurance company, may determine 
that the insurer is not controlled by the person presumed to control it.  In 
addition, the superintendent, after notice and an opportunity to be heard, may 
determine, notwithstanding the absence of the presumption in subparagraph (1), 
that a person does control an insurance company or companies. 
(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.  However, such a 
broker-dealer 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 holds 5% or more of the voting 
securities of a domestic insurer or any entity the broker-dealer knows or 
reasonably believes to be a controlling person of a domestic insurer and 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. 
Sec. A-5.  24-A MRSA §222, sub-§2, ¶B-1, as enacted by PL 1989, c. 385, §3, 
is repealed and the following enacted in its place: 
B-1.  Exchange Act.  "Exchange Act" means the federal Securities Act of 1933, 15 
United States Code, Chapter 2-A, Subchapter 1 and the federal Securities Exchange 
Act of 1934, 15 United States Code, Chapter 2-B. 
Sec. A-6.  24-A MRSA §222, sub-§2, ¶B-2 is enacted to read: 
B-2.  Enterprise risk.  "Enterprise risk" means an activity, circumstance, event or 
series of events involving one or more affiliates of an insurer that, if not remedied 
promptly, is likely to have a material adverse effect upon the financial condition or 
liquidity of the insurer, or of its insurance holding company system as a whole, 
including, but not limited to, anything that would cause or exacerbate a risk-based 
capital event as described in sections 6453 to 6456 or would cause the insurer to be in 
unsound or hazardous financial condition as determined by the superintendent. 
Sec. A-7.  24-A MRSA §222, sub-§2, ¶D, as repealed and replaced by PL 1975, 
c. 356, §1, is amended to read: 
D.  Insurer.  "Insurer" shall have has the same meaning given it as in section 4 and 
includes a fraternal benefit society required to be licensed under section 4124 or 
4125. 
Sec. A-8.  24-A MRSA §222, sub-§2, ¶¶D-3 to D-5 are enacted to read: 
D-3.  Own risk and solvency assessment or ORSA.  "Own risk and solvency 
assessment" or "ORSA" means a confidential internal assessment that is conducted 
by an insurer or insurance holding company system of the material and relevant risks 
associated with its current business plan and the sufficiency of its capital resources to 
support those risks and that is appropriate to the nature, scale and complexity of the 
operations of the insurer or insurance holding company system. 
D-4.  ORSA guidance manual.  "ORSA guidance manual" means the NAIC Own 
Risk and Solvency Assessment (ORSA) Guidance Manual, as amended from time to 
time.  A change in the ORSA guidance manual is effective with regard to this State 
on January 1st following the calendar year in which the change has been adopted by 
the National Association of Insurance Commissioners. 
D-5.  ORSA summary report.  "ORSA summary report" means a confidential high-
level summary of an insurer's or insurance holding company system's own risk and 
solvency assessment and includes a combination of separate reports that collectively 
meet the requirements of the ORSA guidance manual. 
Sec. A-9.  24-A MRSA §222, sub-§4-A, as enacted by PL 1989, c. 385, §5, is 
repealed. 
Sec. A-10.  24-A MRSA §222, sub-§4-B, as enacted by PL 1989, c. 385, §5, is 
repealed. 
Sec. A-11.  24-A MRSA §222, sub-§4-C is enacted to read: 
4-C.  Acquisitions; tender offers; divestitures.  The following provisions apply to a 
transaction or proposed transaction that results or might result in the change of direct or 
indirect control of a domestic insurer. 
A.  Except as provided in paragraph B, a person other than the issuer may not make a 
tender offer for, or a request or invitation for tenders of, or an agreement to exchange 
securities for, or otherwise acquire any voting security, or any security convertible 
into a voting security, of a domestic insurer or of any person controlling a domestic 
insurer if, as a result of the consummation thereof, the person making the tender 
offer, request or agreement would, directly or indirectly, acquire actual or 
presumptive control of the insurer or controlling person, and a person may not enter 
into an agreement to merge with or otherwise acquire actual or presumptive control 
of a domestic insurer or its controlling person, unless: 
(1)  The person has filed with the superintendent and has sent the domestic 
insurer an application containing the information required by paragraph C; 
(2)  The offer, request, invitation, agreement or acquisition has been approved by 
the superintendent in the manner prescribed in subsection 7; and 
(3)  Ten days has elapsed from the date of approval by the superintendent and no 
injunction or other court order precludes consummation of the offer, request, 
invitation, agreement or acquisition. 
B.  A controlling person of a domestic insurer seeking to divest its controlling interest 
in the domestic insurer in any manner, including any partial divestiture that would 
cause that person to cease to be a controlling person, shall file with the 
superintendent, with a copy to the insurer, confidential notice of its proposed 
divestiture at least 30 days before the cessation of control, unless the divestiture 
transaction consists of the transfer of the divesting person's interest to one or more 
acquiring persons, all of whom have reported their respective acquisitions pursuant to 
paragraph A.  Unless the superintendent grants an exemption under paragraph D, the 
divesting person shall file an application substantially similar to the application 
required under paragraph C, with such modifications as the superintendent 
determines to be appropriate based on the nature of the transaction.  The 
superintendent shall decide whether to approve the application using the criteria in 
subsection 7, paragraph A and may hold a public hearing if the superintendent 
determines that a hearing is in the interests of policyholders or the public.  If 20 days 
has elapsed after the superintendent's receipt of a notice filed under this paragraph 
and the superintendent has not disapproved the proposed divestiture or postponed its 
effective date pending further review, the superintendent is deemed to have granted 
an exemption under paragraph D, subparagraph (2). 
C.  An application required by paragraph A must contain the following information 
as applicable, made under oath or affirmation, except that if the proposed transaction 
is subject to regulation under the Exchange Act or Title 32, chapter 135, the 
superintendent may accept the relevant documents filed with the United States 
Securities and Exchange Commission or the Department of Professional and 
Financial Regulation, Office of Securities in lieu of some or all of the documents 
required by this paragraph:   
(1)  The name and address of each person by whom or on whose behalf the 
merger or other acquisition of control is to be effected and: 
(a)  If the person acquiring control is an individual, the person's principal 
occupation and all offices and positions held during the past 5 years and any 
convictions for crimes other than minor traffic violations during the past 10 
years; and 
(b)  If the person acquiring control is not an individual, a report of the nature 
of its business operations during the past 5 years or for a lesser period the 
person and any predecessors have been in existence; an informative 
description of the business intended to be done by the person and the person's 
subsidiaries; and a list of all individuals who are or who have been selected 
to become directors or executive officers of the person or who perform or 
will perform functions appropriate to such positions.  The list must include 
the information required by division (a) for each individual listed; 
(2)  The source, nature and amount of the consideration used or to be used in 
effecting the merger or other acquisition of control, a description of any 
transaction through which funds were or are to be obtained for any such purpose, 
including any pledge of the insurer's stock or the stock of any of its subsidiaries 
or controlling affiliates, and the identity of persons furnishing consideration.  If a 
source of consideration is a loan made in the lender's ordinary course of business, 
the identity of the lender is confidential if the person filing the application so 
requests; 
(3)  Fully audited financial information as to the earnings and financial condition 
of each acquiring person for the preceding 5 fiscal years, or for a lesser period if 
the acquiring person and any predecessors have been in existence for less than 5 
years, and similar unaudited information as of a date not earlier than 90 days 
before the filing of the application; 
(4)  Any plans or proposals that each acquiring person may have to liquidate the 
insurer, to sell its assets or merge or consolidate it with any person or to make 
any other material change in its business or corporate structure or management; 
(5)  The number of shares of any security referred to in paragraph A that each 
acquiring person proposes to acquire, the terms of the offer, request, invitation, 
agreement or acquisition referred to in paragraph A and a statement as to the 
method by which the fairness of the proposal was arrived at; 
(6)  The amount of each class of any security referred to in paragraph A that is 
beneficially owned or concerning which there is a right to acquire beneficial 
ownership by each acquiring person; 
(7)  A full description of any contracts, arrangements or understandings with 
respect to any security referred to in paragraph A in which any acquiring person 
is involved, including but not limited to transfer of any of the securities, joint 
ventures, loan or option arrangements, puts or calls, guarantees of loans, 
guarantees against loss or guarantees of profits, division of losses or profits or the 
giving or withholding of proxies.  The description must identify the persons with 
whom the contracts, arrangements or understandings have been entered into; 
(8)  A description of the purchase by any acquiring person of any security 
referred to in paragraph A during the 12 calendar months preceding the filing of 
the application, including the dates of purchase, names of the purchasers and 
consideration paid or agreed to be paid; 
(9)  A description of any recommendations to purchase any security referred to in 
paragraph A made during the 12 calendar months preceding the filing of the 
application by any acquiring person or by anyone based upon interviews with or 
at the suggestion of the acquiring person; 
(10)  Copies of all tender offers for, requests or invitations for tenders of, 
exchange offers for and agreements to acquire or exchange any securities referred 
to in paragraph A and copies of any additional related soliciting material that has 
been distributed; 
(11)  The terms of any agreement, contract or understanding made or proposed to 
be made with any broker-dealer as to solicitation of securities referred to in 
paragraph A for tender and the amount of any fees, commissions or other 
compensation to be paid to broker-dealers with regard to the solicitation of 
securities referred to in paragraph A; 
(12)  An agreement by the person required to file the application to provide the 
annual enterprise risk report required by subsection 8, paragraph B-1 for as long 
as control by the person exists; 
(13)  An acknowledgement by the person required to file the application that the 
person and all subsidiaries within its control in the insurance holding company 
system will provide information to the superintendent upon request as necessary 
to evaluate enterprise risk to the insurer; 
(14)  A statement as to whether or not the proposed transaction will result in an 
increase in market share in this State in any line of insurance as specified in the 
annual statement required to be filed under section 423 for one or more insurers 
with combined market share greater than 5% and, if so, such further information 
on the competitive impact of the proposed transaction as the superintendent 
requires by rule or order; and 
(15)  Such additional information as the superintendent may prescribe by rule or 
order. 
D.  The superintendent may exempt a person otherwise subject to the requirements of 
this subsection and subsection 7 from some or all of those requirements if the person 
demonstrates to the satisfaction of the superintendent that an exemption will not be 
detrimental to the interests of policyholders in the State or the public and that the 
transaction satisfies at least one of the following criteria: 
(1)  The interests of the State in regulating the transaction are minimal relative to 
the interests of other jurisdictions or are minimal relative to the impact of the 
transaction as a whole; 
(2)  The person proposes a divestiture of control under paragraph B and the 
superintendent determines that the prior approval process is not necessary in the 
circumstances of the transaction; 
(3)  A party proposing to acquire presumed control submits a disclaimer fully 
disclosing all material relationships and bases for affiliation with the insurer and 
demonstrating to the satisfaction of the superintendent that the person will not be 
acquiring actual control.  As a condition of granting an exemption under this 
subparagraph, the superintendent may require the person to agree to reasonable 
restrictions on the exercise of rights or powers that might otherwise tend to result 
in control; 
(4)  The superintendent elects to participate in a consolidated approval 
proceeding conducted under the laws of one or more other states pursuant to 
subsection 7-A, paragraph E; and 
(5)  The transaction involves the control of a person that is not primarily engaged 
in the business of insurance, directly or through its affiliates, and there will be no 
material impact on the management or operations of a domestic insurer. 
A person requesting an exemption under this paragraph must agree to provide 
additional information if needed by the superintendent and to postpone the effective 
date of the transaction if ordered by the superintendent while the request for 
exemption is pending. 
Sec. A-12.  24-A MRSA §222, sub-§5, as amended by PL 1989, c. 385, §6, is 
further amended to read: 
5.  Tender offer material.  All requests or invitations for tenders or advertisements 
making a tender offer or requesting or inviting tenders of such voting securities for 
control of a domestic insurer or its controlling person made by or on behalf of any such 
person shall must contain any information specified in subsection 4-B 4-C as the 
superintendent may prescribe, and shall must be filed with the superintendent at the time 
that material is first published or sent or given to security holders. Copies of any 
additional material soliciting or requesting such tender offers subsequent to the initial 
solicitation or request shall must contain the information that the superintendent may 
prescribe as necessary or appropriate in the public interest or for the protection of 
policyholders, and shall must be filed with the superintendent at the time copies of that 
material are first published or sent or given to security holders. 
Sec. A-13.  24-A MRSA §222, sub-§6, as amended by PL 2007, c. 466, Pt. D, §1, 
is further amended to read: 
6.  Information as to applicant.  If the a person required to file the statement 
referred to in subsection 4-A an application under subsection 4-C is a partnership, limited 
partnership, syndicate or other group, the superintendent may require that the information 
called for by subsection 4-A 4-C must be given with respect to each partner of such the 
partnership or limited partnership, each member of such the syndicate or group and each 
person who controls any such partner or member.  If the a person required to file the 
statement referred to in subsection 4-A an application under subsection 4-C is a 
corporation, the superintendent may require that the information called for thereby by 
subsection 4-C must be given with respect to such the corporation and each officer and 
director thereof and each person who is directly or indirectly the beneficial owner of more 
than 10% of the outstanding securities of such the corporation. 
Sec. A-14.  24-A MRSA §222, sub-§7, as amended by PL 2007, c. 466, Pt. D, §2, 
is further amended to read: 
7.  Approval, disapproval of proposed change of control.  
A.  The superintendent shall hold a hearing in accordance with the procedures set 
forth in the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter IV 
4, within 30 days after the statement application required by subsection 4-A 4-C has 
been filed with the superintendent.  The superintendent shall make a determination 
within 30 days after the conclusion of that hearing.  The superintendent shall approve 
any purchase, exchange, merger or other acquisition change of control referred to in 
subsection 4-A 4-C unless the superintendent finds that:  
(1)  After the change of control, the domestic insurer could not satisfy the 
requirements for the issuance of a certificate of authority according to 
requirements in force at the time of the issuance, or last renewal or continuation 
of its certificate of authority to do the insurance business which that it intends to 
transact in this State; 
(2)  The effect of the purchases, exchanges, merger of a controlling person of the 
insurer, or other acquisitions changes of control may be substantially to lessen 
competition in insurance in this State or tend to create a monopoly therein; in this 
State or would violate the laws of this State or of the United States relating to 
monopolies or restraints of trade; 
(3)  The financial condition of an acquiring person is such as would jeopardize 
the financial stability of the insurer or prejudice the interest of its policyholders;  
(4)  The plans or proposals which that the acquiring or divesting person has to 
liquidate the insurer, to sell its assets or to merge it with any person, or to make 
any other major change in its business or corporate structure or management, are 
unfair or prejudicial to policyholders;  
(5)  The competence, experience and integrity of those persons who would 
control the operation of the insurer indicate that it would not be in the interest of 
policyholders or the public to permit them to do so;  
(6)  Any merger of a domestic insurer does not comply with section 3474; or 
(7)  The acquisition change of control would tend to affect adversely the 
contractual obligations of the domestic insurer or its ability and tendency to 
render service in the future to its policyholders and the public. 
B.  Subparagraphs Paragraph A, subparagraphs (3) to (7) do not apply to any change 
of control if and to the extent that the superintendent, by rule or by order, exempts the 
same change of control from the provisions of those subparagraphs as not 
comprehended included within the purpose of this subsection. 
C.  Merger, consolidation or bulk reinsurance as to a domestic insurer shall may be 
effectuated only pursuant to the applicable provisions of chapter 47, subchapter IV, 4 
and sections 3875, 4108 and 4109, as related to organization and powers of insurers. 
D.  Violation. 
(1)  Failure to file the statement application required under subsection 4-A 4-C 
constitutes a violation of this chapter section.  
(2)  Effectuation of or any attempt to effectuate an acquisition of, control of, 
divestiture of control of or merger with a domestic insurer within earlier than 30 
days of after the filing of the statement application required by subsection 4-A, 
prior to 4-C, before the superintendent's decision if a hearing is held or after 
disapproval of such acquisition of control or merger by the superintendent of the 
acquisition, divestiture or merger, constitutes a violation of this chapter section. 
Sec. A-15.  24-A MRSA §222, sub-§§7-A and 7-B are enacted to read: 
7-A.  Consolidated proceedings.  If a proposed change of control requires, or is part 
of a series of related transactions that require, the approval of the insurance regulators of 
more than one state, a person filing an application under subsection 4-C with respect to 
the change of control may file a request for a consolidated approval proceeding with the 
National Association of Insurance Commissioners. 
A.  The applicant shall file a copy of the application made under subsection 4-C with 
the National Association of Insurance Commissioners within 5 days after making the 
request for a consolidated approval proceeding. 
B.  Within 10 days after receiving notice from the National Association of Insurance 
Commissioners of a request for a consolidated approval proceeding, the 
superintendent shall issue an order, with notice to the applicant and to the National 
Association of Insurance Commissioners, specifying whether the superintendent 
elects to participate in the consolidated proceeding or to opt out of the consolidated 
proceeding. 
C.  If the superintendent opts out of the consolidated approval proceeding pursuant to 
paragraph B, the superintendent shall hold a public hearing under subsection 7 unless 
the superintendent grants an exemption under subsection 4-C, paragraph D.  Opting 
out of the consolidated proceeding does not preclude or limit the superintendent’s 
authority to coordinate a proceeding conducted under subsection 7 with the 
consolidated proceeding or with other parallel proceedings in other states. 
D.  With the agreement of the other participating insurance regulators, the 
superintendent may initiate a consolidated approval proceeding under this paragraph 
to render decisions on all applications within the scope of the order of consolidation 
issued by the superintendent.  A consolidated approval proceeding convened under 
this paragraph is a public adjudicatory proceeding.  Except as provided in this 
paragraph, the proceeding must be conducted in the same manner as a proceeding 
under subsection 7. 
(1)  A person who would have the right to participate in a proceeding on any of 
the consolidated applications held under subsection 7 or substantially similar 
laws of other states has the right to participate in the proceeding. 
(2)  The chief insurance regulator of a participating state has the right to 
participate in making the decision or in designating a decision-making panel. 
(3)  The proceeding is public, except that deliberations of a decision-making 
panel are not public proceedings and communications in the course of those 
deliberations among panel members and their advisers, other than the decision 
itself, are not public records. 
(4)  The proceeding may be held in any state with a significant connection to the 
subject transactions or in a nearby location in an adjacent state.  Sessions may be 
held in different states.  Provision must be made for parties, witnesses, insurance 
regulators and members of the public to attend and participate in the proceeding 
by telecommunication. 
(5)  The superintendent, decision-making panel or presiding officer may vary the 
applicable procedural requirements under this Title and Title 5 to the extent the 
superintendent, panel or presiding officer determines to be reasonably necessary 
for the fair and effective administration of a consolidated multistate proceeding. 
(6)  The decision is subject to judicial review in the same manner as a final 
agency action of the superintendent. 
E.  The superintendent may participate, including serving as a decision maker or 
member of a decision-making panel, in a consolidated approval proceeding 
conducted under the laws of one or more other states if the consolidated proceeding 
provides for a public hearing with substantially similar rights of participation and 
judicial review as a proceeding conducted pursuant to paragraph D.  If the 
superintendent elects under this paragraph to participate in a consolidated proceeding 
that is conducted under the laws of one or more other states, the application is exempt 
from further review under this section pursuant to subsection 4-C, paragraph D, 
subparagraph 
(4) 
and 
the 
consolidated 
proceeding, 
notwithstanding 
the 
superintendent's participation, is not subject to any provisions of the law of this State 
governing adjudicatory proceedings, judicial review, public records or public 
meetings. 
7-B.  Supervisory colleges.  In order to assess the business strategy, financial 
position, legal and regulatory position, risk exposure including enterprise risk, risk 
management and governance processes of a domestic insurer that is part of an insurance 
holding company system with international operations, the superintendent may participate 
in a supervisory college with other regulators charged with supervision of the insurer or 
its affiliates, including other state, federal and international regulatory agencies.  A 
supervisory college may be convened as either a temporary or permanent forum for 
communication and cooperation among the regulators charged with the supervision of the 
insurer or its affiliates. 
A.  The superintendent's powers with respect to supervisory colleges include, but are 
not limited to: 
(1)  Initiating the establishment of a supervisory college or participating in a 
supervisory college initiated by one or more other regulators; 
(2)  Entering into agreements providing the basis for cooperation between the 
superintendent and the other participating regulators and for the activities of the 
supervisory college, including but not limited to agreements for sharing 
confidential information under section 216, subsection 5; 
(3)  Obtaining and providing assistance in examinations conducted under 
subsection 1-A or under the examination authority of other participating 
jurisdictions; 
(4)  Clarifying the membership and participation of other regulators in the 
supervisory college; 
(5)  Clarifying the functions of the supervisory college and the role of other 
regulators, including the designation of the superintendent or another member of 
the supervisory college as a group-wide supervisor; 
(6)  Coordinating the ongoing activities of the supervisory college, including 
planning meetings, supervisory activities and processes for information sharing; 
and 
(7)  Establishing a crisis management plan. 
B.  A domestic insurer whose activities are subject to this subsection is liable for and 
shall pay the reasonable expenses of the superintendent's participation in a 
supervisory college, including reasonable travel expenses.  The superintendent may 
establish a regular assessment to the insurer for the payment of these expenses. 
C.  This section may not be construed to delegate to a supervisory college the 
authority of the superintendent to regulate or supervise an insurer or its affiliates 
within this State. 
Sec. A-16.  24-A MRSA §222, sub-§8, ¶A, as amended by PL 1999, c. 113, §11, 
is further amended to read: 
A.  Every An insurer that is authorized to do business in this State and that is a 
member of an insurance holding company system shall register with the 
superintendent, except that these requirements do not apply to a foreign insurer 
domiciled in a jurisdiction that in the opinion of the superintendent has adopted by 
statute or regulation disclosure statements and standards substantially similar to those 
contained in this chapter section. An insurer domiciled in a jurisdiction that has not 
adopted by statute or regulation disclosure requirements and standards substantially 
similar to those contained in this section may be treated as a domestic insurer for 
purposes of this section.  Each insurer that is subject to registration under this 
subsection shall register within 15 days after it becomes subject to registration, and 
annually thereafter by May 1st, unless the superintendent, for good cause shown, 
extends the time for registration and then an insurer must file shall register within that 
extended time.  Nothing in this This section may be construed to does not prohibit the 
superintendent from requesting any authorized insurer that is a member of a an 
insurance holding company system and not subject to registration under this section 
for to provide a copy of the registration statement or other information filed by such 
insurer with the insurance regulatory authority of its state of domicile. Upon request 
of the insurer or of the insurance regulatory authority of another jurisdiction in which 
the insurer is authorized to transact insurance, the superintendent at the insurer's 
expense shall furnish a copy of the registration statement or other information filed 
by a domestic insurer with the superintendent pursuant to this chapter section; 
Sec. A-17.  24-A MRSA §222, sub-§8, ¶B, as amended by PL 2001, c. 72, §5, is 
further amended to read: 
B.  Every An insurer subject to registration shall file a registration statement on a 
form provided by with the superintendent, which on a form and in a format 
prescribed by the National Association of Insurance Commissioners.  The registration 
statement must contain current information about: 
(1)  The capital structure, general financial condition, ownership and 
management of the insurer and of any person controlling the insurer; 
(1-A)  The identity and relationship of every member of the insurance holding 
company system; 
(2)  The following transactions currently outstanding between the insurer and its 
affiliates: 
(a)  Loans and other investments, and purchases, sales or exchanges of 
securities of the affiliate by the insurer or of the insurer by its affiliates; 
(b)  Purchases, sales or exchanges of assets; 
(c)  Transactions not in the ordinary course of business; 
(d)  Guarantees or undertakings for the benefit of an affiliate that result in an 
actual contingent exposure of the insurer's assets to liability, other than 
insurance contracts entered into in the ordinary course of the insurer's 
business; 
(e)  All management and service contracts and all cost-sharing arrangements, 
other than cost allocation arrangements based upon generally accepted 
accounting principles;  
(f)  Reinsurance agreements; and 
(g)  Dividends and other distributions to shareholders; and 
(h)  Consolidated tax allocation agreements; 
(2-A)  Any pledge of the insurer's stock, including stock of any subsidiary or 
controlling affiliate, for a loan made to any member of the insurance holding 
company system; 
(2-B)  If requested by the superintendent, financial statements of or within the 
insurance holding company system, including all affiliates.  The required 
financial statements may include but are not limited to annual audited financial 
statements filed with the United States Securities and Exchange Commission 
pursuant to the Exchange Act.  An insurer required to file financial statements 
pursuant to this subparagraph may satisfy the request by providing the 
superintendent with the most recently filed parent corporation financial 
statements that have been filed with the United States Securities and Exchange 
Commission; 
(3)  Other matters concerning transactions between the insurer and any affiliate as 
may be required by the superintendent; and 
(4)  Any other information required by the superintendent by rule; 
Sec. A-18.  24-A MRSA §222, sub-§8, ¶¶B-1 to B-3 are enacted to read: 
B-1.  The controlling person with ultimate control of an insurer subject to registration 
shall also file an annual enterprise risk report.  The report must be appropriate to the 
nature, scale and complexity of the operations of the insurance holding company 
system and must, to the best of the controlling person's knowledge and belief, identify 
the material risks within the insurance holding company system, if any, that could 
pose enterprise risk to the insurer.  The report must be filed with the lead state 
regulator of the insurance holding company system as determined by the procedures 
within the financial analysis handbook adopted by the National Association of 
Insurance Commissioners; 
B-2.  An insurer subject to registration shall file statements confirming that the 
insurer's board of directors oversees corporate governance and internal controls and 
that the insurer's officers or senior management have approved and implemented and 
continue to maintain and monitor corporate governance and internal control 
procedures; 
B-3.  A domestic insurer that is subject to registration, and has annual premium of 
$500,000,000 or more or is a member of an insurance holding company system with 
annual premium of $1,000,000,000 or more, shall conduct an own risk and solvency 
assessment in accordance with the requirements of this paragraph at least annually, 
and also at any time when there are significant changes to the risk profile of the 
insurer or its insurance holding company system, except as otherwise provided in 
subparagraph (1).  For purposes of this paragraph, "premium" means direct written 
and unaffiliated assumed premium, including international direct and assumed 
premium but excluding premiums reinsured with the Federal Crop Insurance 
Corporation within the United States Department of Agriculture, Risk Management 
Agency and with the National Flood Insurance Program within the United States 
Department of Homeland Security, Federal Emergency Management Agency. 
(1)  This paragraph does not apply if: 
(a) The insurer is an agency, authority or instrumentality of the United States, 
its possessions and territories, the Commonwealth of Puerto Rico, the District 
of Columbia or a state or political subdivision of a state; 
(b)  The insurer and its insurance holding company system did not meet 
either of the minimum premium criteria of this paragraph in the financial 
statements immediately preceding their most recent financial statements and 
the superintendent has not required compliance with this paragraph under 
subparagraph (2); or 
(c)  The superintendent has granted a waiver from the requirements of this 
paragraph based upon unique circumstances.  In deciding whether to grant a 
waiver, the superintendent may consider the type and volume of business 
written by the insurer, the ownership and organizational structure of the 
insurer and its insurance holding company system and any other factor the 
superintendent considers relevant to the insurer or the insurer's insurance 
holding company system.  If the insurer's insurance holding company system 
includes insurers domiciled in more than one state, the superintendent shall 
coordinate with the lead regulator and with other domiciliary regulators in 
considering whether to grant the insurer's request for a waiver. 
(2)  The superintendent may require an insurer that does not meet either of the 
minimum premium criteria of this paragraph to comply with the requirements of 
this paragraph if: 
(a)  The superintendent determines that the insurer should be subject to this 
paragraph due to unique circumstances, including, but not limited to, the type 
and volume of business written by the insurer, the ownership and 
organizational structure of the insurer and its insurance holding company 
system, federal agency requests and international supervisor requests; 
(b)  The insurer is subject to a corrective order or required to adopt a risk-
based capital plan under sections 6453 to 6456; 
(c)  The superintendent has determined in accordance with rules adopted by 
the superintendent that the insurer is in hazardous financial condition; or 
(d)  The superintendent has determined that the insurer otherwise exhibits 
qualities of a troubled insurer. 
(3)  If an insurer's insurance holding company system has annual premium of 
$1,000,000,000 or more, the assessment and reporting required by this paragraph 
must be conducted for each insurer within the insurance holding company 
system, either on a systemwide basis or separately for insurers or combinations of 
insurers within the insurance holding company system. 
(4)  An insurer subject to this paragraph shall maintain a risk management 
framework to assist the insurer with identifying, assessing, monitoring, managing 
and reporting on its material and relevant risks.  An insurer may satisfy this 
requirement by participating in an applicable risk management framework 
maintained by the insurance holding company system of which the insurer is a 
member. 
(5)  An insurer subject to this paragraph shall prepare and submit regular ORSA 
summary reports that satisfy the requirements of this subparagraph and shall 
provide additional information to the superintendent upon request. 
(a)  Beginning no later than 2015, the ORSA summary report must be 
prepared at least annually, on a timetable consistent with the insurer's internal 
strategic planning processes, and submitted to the lead regulator of the 
insurer's insurance holding company system, as determined by the procedures 
within a financial analysis handbook adopted by the National Association of 
Insurance Commissioners.  If the superintendent is not the lead regulator, the 
insurer shall submit the insurer's or insurance holding company system's most 
recent ORSA summary report to the superintendent on request. 
(b)  The ORSA summary report must be prepared consistent with the ORSA 
guidance manual.  Documentation and supporting information must be 
maintained and made available upon examination by or upon request of the 
superintendent. 
(c)  The insurer's or insurance holding company system's chief risk officer, or 
other executive having responsibility for the oversight of the insurer's 
enterprise risk management process, shall sign the ORSA summary report 
attesting to the best of the signer's belief and knowledge that the insurer 
applies the enterprise risk management process described in the ORSA 
summary report and that a copy of the report has been provided to the 
insurer's board of directors or the appropriate committee of the board. 
(d)  An insurer may comply with this paragraph by providing the most recent 
ORSA summary report and a report or reports that are substantially similar to 
the ORSA summary report that are provided by the insurer or another 
member of its insurance holding company system to the insurance 
commissioner of another state or to an insurance supervisor or regulator of a 
foreign jurisdiction if that report provides information that is comparable to 
the information described in the ORSA guidance manual.  Any report in a 
language other than English must be accompanied by an English translation. 
(6)  The superintendent's review of the ORSA summary report, and any 
additional requests for information, must be consistent with accepted regulatory 
procedures for the analysis and examination of multistate or global insurers and 
insurance groups. 
Sec. A-19.  24-A MRSA §222, sub-§8, ¶C, as enacted by PL 1975, c. 356, §1, is 
amended to read: 
C.  No information need be disclosed An insurer does not need to disclose on the 
registration statement filed pursuant to this subsection if such information that is not 
material to the purposes of this chapter section. Unless the superintendent by rule, 
regulation or order provides otherwise, sales, purchases, exchanges, loans or 
extensions of credit or investments, involving 1/2 of 1% or less of an insurer's 
admitted assets as of December 31st immediately preceding shall are not be deemed 
material for purposes of this section; 
Sec. A-20.  24-A MRSA §222, sub-§8, ¶I, as enacted by PL 1975, c. 356, §1, is 
amended to read: 
I.  Any person may file with the superintendent a disclaimer of affiliation with any 
authorized insurer or such a.  A disclaimer of affiliation may be filed by the insurer or 
any member of an insurance holding company system.  The disclaimer shall must 
fully disclose all material relationships and bases for affiliation between such the 
disclaiming person and the insurer as well as the bases for disclaiming such 
affiliation.  After a disclaimer has been filed, the insurer shall be relieved of any duty 
to register or report under this section which may arise out of the insurer's 
relationship with such person unless and until the superintendent disallows the 
disclaimer.  The superintendent shall disallow a disclaimer only after a hearing 
thereon with notice to all parties in interest, and after making specific findings of fact 
to support such disallowance. 
(1)  An approved disclaimer relieves the disclaiming person of the duty to 
register under this section. 
(2)  A disclaimer is deemed approved unless the superintendent, within 30 days 
after receipt of a complete disclaimer, including any additional information 
required by the superintendent, either disallows the disclaimer or notifies the 
disclaiming person that a hearing will be held on the disclaimer. 
(3)  The superintendent may condition the approval of a disclaimer on terms and 
conditions reasonably designed to ensure that the disclaiming person will not 
exercise actual control or acquire the right to actual control over the insurer 
without triggering the prior approval process under subsections 4-C and 7. 
(4)  If the superintendent takes action on a disclaimer without hearing, including 
the imposition of conditions not agreed to by the disclaiming person, an 
aggrieved person has the right to a hearing. 
(5)  The superintendent may rescind the approval of a disclaimer, after notice and 
opportunity for hearing, on the basis of new information or changed 
circumstances demonstrating the existence of control over the insurer. 
Sec. A-21.  24-A MRSA §222, sub-§9, as amended by PL 1991, c. 828, §5, is 
further amended to read: 
9.  Transactions with affiliates; standards.  Transactions by insurers subject to 
registration with their affiliates that occur after the effective date of this chapter are 
subject to the following standards. 
A.  The terms, including any charges or fees for services performed, must be fair and 
reasonable. 
A-1.  Agreements for cost-sharing services and management must include any 
provisions required by the superintendent by rule. 
B.  The books, accounts and records of each party must be so maintained as to 
disclose clearly and accurately the nature and details of the transaction, including all 
accounting information necessary to support the reasonableness of any charges or 
fees. 
C.  The insurer's surplus to policyholders following any dividends or distributions to 
stockholder affiliates must be reasonable in relation to the insurer's outstanding 
liabilities and adequate to its financial needs. 
D.  Expenses incurred and payment received must be allocated to the insurer in 
conformity with customary insurance accounting practices consistently applied. 
E.  A domestic insurer must shall notify the superintendent in writing at least 30 days 
in advance, unless the superintendent authorizes a shorter period, before entering into 
or materially amending or modifying any of the following kinds of transactions with 
any member of its holding company system: 
(1)  Sales, purchases, exchanges, loans or extensions of credit, guarantees or 
investments that are equal to or exceed: 
(a) With respect to nonlife insurers, the lesser of 3% of the insurer's admitted 
assets as of December 31st of the preceeding preceding year or and 25% of 
surplus to policyholders; 
(b)  With respect to life insurers, 3% of the insurer's admitted assets as of 
December 31st of the preceding year; or 
(c)  With respect to nonprofit hospital and medical service organizations and 
their 100% controlled affiliates that operate as monoline health insurers or 
health maintenance organizations, the lesser of 5% of the entity's admitted 
assets as of December 31st of the preceding year or and 25% of surplus to 
policyholders; 
(2)  Loans or extensions of credit to any person who is not an affiliate, if the 
insurer makes the loan or extension of credit with the agreement or understanding 
that the proceeds in whole or in substantial part, are to be used to make loans or 
extensions of credit to, purchase assets of or make investments in any affiliate of 
the insurer if the loan, extension of credit, purchase or investment is equal to or 
exceeds: 
(a)  With respect to nonlife insurers, the lesser of 3% of the insurer's admitted 
assets as of December 31st of the preceding year or and 25% of surplus to 
policyholders; 
(b)  With respect to life insurers, 3% of the insurer's admitted assets as of 
December 31st of the preceding year; or 
(c)  With respect to nonprofit hospital and medical service organizations and 
their 100% controlled affiliates that operate as monoline health insurers or 
health maintenance organizations, the lesser of 5% of the entity's admitted 
assets as of December 31st of the preceding year or and 25% of surplus to 
policyholders; 
(3)  Reinsurance All reinsurance pooling agreements or modifications to the, and 
all reinsurance agreements in which the reinsurance premium or a change in the 
insurer's liabilities, or the projected reinsurance premium or a projected change in 
the insurer's liabilities in any of the next 3 years, equals or exceeds 5% of the 
insurer's surplus to policyholders, as of December 31st of the preceding year, 
including those agreements that may require as consideration the transfer of 
assets from an insurer to a nonaffiliate if an agreement or understanding exists 
between the insurer and nonaffiliate that any portion of the assets will be 
transferred to one or more affiliates of the insurer; 
(4)  Management All management agreements, cost-sharing arrangements and, 
tax allocation agreements, service contracts that: and guaranties, with the 
exception of guaranties that are quantifiable in amount and do not exceed, in the 
aggregate, the lesser of 0.5% of admitted assets and 10% of surplus as regards 
policyholders as of December 31st of the preceding year; 
(a)  Delegate authority to effectuate reinsurance; 
(b)  Provide for delegated corporate governance; 
(c)  Provide for servicing of claims liabilities; or 
(d)  In any other way contribute an element of expense that is material when 
related to operations of the insurer; 
(5)  Any transactions that are part of a plan or series of like transactions with 
persons within the holding company system if the purpose of those separate 
transactions is to avoid the statutory threshold amount and thus avoid the review 
that would occur otherwise. If the superintendent determines that those separate 
transactions were entered into over any 12-month period for such a purpose, the 
superintendent may exercise authority under this subsection; and 
(6)  Any other material transactions specified by rule that the superintendent has 
determined may adversely affect the interests of the insurer's policyholders. 
A notice of amendment or modification of a transaction must include the reasons for 
the change and the financial impact on the domestic insurer.  The insurer shall notify 
the superintendent within 30 days after terminating an agreement previously reported 
under this paragraph. 
The superintendent shall disapprove any such a transaction that is subject to this 
paragraph if it the transaction violates the standards of this section or other applicable 
law or adversely affects the interests of policyholders.  The superintendent's failure to 
make a determination on a proposed transaction within 30 days after it has been 
submitted for review has the effect of an approval, unless the superintendent has 
issued a notice of adjudicatory hearing on the proposal in accordance with section 
230. 
Any violation of this subsection, in addition to the penalties contained in subsection 14, 
renders the transactions voidable at the initiative of the superintendent or otherwise under 
applicable law.  The superintendent's approval of a transaction in accordance with this 
section, whether actual or by acquiescence, may not override any applicable law and does 
not operate to authorize any transaction that would be contrary to law if it involved an 
insurer not a member of the same holding company system. 
Sec. A-22.  24-A MRSA §222, sub-§10, as amended by PL 1993, c. 313, §10, is 
further amended to read: 
10.  Insurer's surplus; adequacy factors.  For the purposes of this chapter section, 
in determining whether an insurer's surplus to policyholders is reasonable in relation to 
the insurer's outstanding liabilities and adequate to its financial needs, the following 
factors, among others, may be considered: 
A.  The size of the insurer as measured by its assets, capital and surplus, reserves, 
premium writings, insurance in force and other appropriate criteria; 
B.  The extent to which the insurer's business is diversified among the several lines of 
insurance; 
C.  The number and size of the risks insured in each line of business; 
D.  The extent of the geographical dispersion of the insurer's insured risks; 
E.  The nature and extent of the insurer's reinsurance program; 
F.  The quality, diversification and liquidity of the insurer's investment portfolio; 
G.  The recent past and projected future trend in the size of the insurer's surplus as 
regards policyholders; 
H.  The quality and liquidity of investments in subsidiaries or affiliates.  The 
department may discount any such investment or treat any investment as a 
nonadmitted asset for purposes of determining the adequacy of surplus as regards 
policyholders whenever the investment so warrants; 
I.  The adequacy of the insurer's reserves; 
J.  The surplus as regards policyholders maintained by other comparable insurers in 
respect of the factors set out in this subsection; and 
K.  The quality of the company's earnings and the extent to which the reported 
earnings include extraordinary items. 
Sec. A-23.  24-A MRSA §222, sub-§11-C, ¶B, as enacted by PL 2009, c. 511, 
Pt. A, §5, is amended to read: 
B.  The superintendent shall issue an order restricting or disallowing the payment of 
dividends and distributions if the superintendent determines that the insurer's surplus 
would not be reasonable in relation to the insurance company's outstanding liabilities, 
that the insurer's surplus would be inadequate to that company's financial needs or, 
that the insurer's financial condition would constitute a condition hazardous to 
policyholders, claimants or the public or that a violation of subsection 4-C prevents 
the superintendent from sufficiently understanding the enterprise risk to the insurer 
posed by its affiliates or by its insurance holding company system. 
Sec. A-24.  24-A MRSA §222, sub-§12, as amended by PL 1999, c. 113, §13, is 
repealed. 
Sec. A-25.  24-A MRSA §222, sub-§13, as amended by PL 1989, c. 385, §9, is 
repealed. 
Sec. A-26.  24-A MRSA §222, sub-§13-A is enacted to read: 
13-A.  Confidential information.  This section applies to holding company 
information that is in the possession or control of the superintendent or that is in the 
possession or control of the National Association of Insurance Commissioners as a result 
of a filing under this section or as a result of information sharing by the superintendent as 
authorized by this section. 
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 expressly been designated as a public record under other 
applicable law: 
(1)  Information obtained by the superintendent pursuant to an examination or 
investigation pursuant to subsection 1-A to the same extent as the information 
would have been confidential if obtained in an examination or investigation 
conducted under section 220 or 221; 
(2)  A registration statement or report filed under subsection 8, including all 
supporting information; 
(3)  A report filed under subsection 9, including all supporting information; 
(4)  A notice of proposed divestiture filed under subsection 4-C, paragraph B, 
until the divestiture transaction has occurred;  
(5)  A disclosure of the beneficial owner of securities made by a broker-dealer 
pursuant to subsection 2, paragraph B, subparagraph (3); 
(6)  The identity of a lender that is to finance a proposed transaction if declared 
confidential under subsection 4-C, paragraph C, subparagraph (2); 
(7)  Information filed in support of any required attestation of risk management 
or internal controls under subsection 4-C, paragraph C, subparagraph (12) or 
(13); 
(8)  A competitive impact statement filed under subsection 4-C, paragraph C, 
subparagraph (14), including all supporting information; 
(9)  Information obtained under an information-sharing agreement entered into 
pursuant to this section to the extent that it is protected by the confidentiality 
provisions of the agreement; 
(10)  Information 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 normally maintained, if the superintendent had no way to obtain the 
information without the confidentiality protection; and 
(11)  Information obtained under this section to the extent that it is confidential 
under other applicable law, including, but not limited to, section 216, section 225 
and Title 1, section 402, subsection 3. 
B.  Except as otherwise provided by paragraphs D and E and other applicable law, 
holding company information 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.  Neither the superintendent nor any person who 
received holding company information from or under the authority of the 
superintendent under this section may be permitted or required to testify in any 
private civil action concerning holding company information that is confidential 
under this subsection. 
C.  The superintendent may share holding company information 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 information must agree in writing to maintain the same 
level of confidentiality as is available under Maine law.  This requirement may be 
satisfied throught a multilateral confidentiality agreement to which both the 
superintendent and the recipient are parties. 
(2)  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 information at 
a level at least equivalent to the protections provided by this subsection and 
section 216, subsection 5. 
(3)  ORSA-related information 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 information and has 
verified in writing the legal authority to maintain confidentiality; 
(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 
(c)  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. 
D.  This subsection does not prohibit the superintendent from using holding company 
information in the furtherance of any regulatory or legal action brought as a part of 
the superintendent's official duties. 
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 to be made a public record in its entirety or in redacted form if the 
superintendent determines that public disclosure will be in the interest of 
policyholders, shareholders or the public. 
Sec. A-27.  24-A MRSA §222, sub-§14, ¶A, as amended by PL 2007, c. 466, Pt. 
D, §3, is further amended to read: 
A.  Any person who willfully violates any of the provisions of this section, or the 
rules and regulations promulgated by the superintendent under authority thereof, or 
any person who willfully, in a filing pursuant to subsection 4-A 4-C or a registration 
pursuant to subsection 8, paragraph B, makes any untrue statement of a material fact 
or omits to state any material fact required to be stated therein or necessary to make 
the statements therein not misleading, must upon conviction be fined not more than 
$1,000 or imprisoned not more than 3 years, or both; 
Sec. A-28.  24-A MRSA §222, sub-§18, as amended by PL 1999, c. 113, §14, is 
further amended to read: 
18.  Rules.  The superintendent may, upon notice and opportunity for all interested 
persons to be heard, adopt reasonable rules as necessary to carry out and effectuate 
provisions of this section.  Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Sec. A-29.  24-A MRSA §222, sub-§19, as enacted by PL 1975, c. 356, §1, is 
amended to read: 
19.  Supplemental to existing provisions.  This section, as to insurance holding 
company systems, supplements in particular those provisions contained in sections 407, 
subsection 2; 410, subsection 1, paragraph B; 413; 423-C; 425; 1115; 1136; 3414; 3474; 
3475; 3476; 3483; 3875 and 4407; and the provisions of this section shall be are deemed 
to supersede or modify any such provisions or any other provisions of the Maine 
Insurance Code, as it may be amended, only this Title to the extent inconsistent therewith. 
Sec. A-30.  24-A MRSA §423-F is enacted to read: 
§423-F.  Own risk and solvency assessment 
1.  General requirement.  A domestic insurer that is not subject to registration under 
section 222, subsection 8 shall comply with the requirements of section 222, subsection 8, 
paragraph B-3 if the requirements of that paragraph would apply if the insurer were 
subject to registration.  The superintendent is considered the insurer's lead regulator for 
purposes of this section. 
2.  Confidentiality.  All documents prepared or filed pursuant to this section are 
confidential to the same extent and subject to the same terms and procedures as if they 
were prepared or filed pursuant to section 222, subsection 8, paragraph B-3. 
Sec. A-31.  24-A MRSA §1157, sub-§5, ¶D, as amended by PL 2001, c. 72, §15, 
is further amended to read: 
D.  Investments made or acquired by subsidiaries referred to in paragraph B, 
subparagraph (1), are considered to be made or acquired directly by the insurer, pro 
rata, in the case of a subsidiary not wholly owned, and, to such extent, are subject to 
all the provisions and limitations on the making of investments specified in this 
chapter with respect to investments by the insurer; must be valued in accordance with 
the provisions of section 901-A and any other applicable provisions of this Title and 
any applicable rules adopted by the superintendent; and must be located pursuant to 
section 3408.  Those subsidiaries are subject to examination by the superintendent 
under section 221, subsection 1, and section 222, subsection 1 1-A. 
Sec. A-32.  24-A MRSA §4356, sub-§§12 and 13, as enacted by PL 1969, c. 
132, §1, are amended to read: 
12.    If the insurer has requested or consented to rehabilitation by vote or written 
authorization of a majority of its directors or stockholders, or members, as to mutual 
insurers; or 
13.    If the insurer has failed to pay any valid judgment against it within 30 days after 
the same became final.; or 
Sec. A-33.  24-A MRSA §4356, sub-§14 is enacted to read: 
14.  If a violation of section 222, subsection 4-C prevents the superintendent from 
sufficiently understanding the enterprise risk to the insurer posed by its affiliates or by its 
insurance holding company system. 
PART B 
Sec. B-1.  24-A MRSA §601, sub-§26, as amended by PL 2003, c. 203, §1, is 
further amended to read: 
26.  Accredited reinsurers.  Application fee fees for accreditation as reinsurer of 
reinsurers may not exceed $500. 
Sec. B-2.  24-A MRSA §601, sub-§26-A is enacted to read: 
26-A.  Certified reinsurers.  Application fees for certification of reinsurers may not 
exceed $1,000. 
Sec. B-3.  24-A MRSA §731-B, sub-§1, ¶B-1, as enacted by PL 2001, c. 47, §2, 
is amended to read: 
B-1.  Is accredited as a reinsurer in this State, in accordance with the following 
standards. 
(1) To apply for accreditation, a reinsurer shall file with the superintendent a 
written application on a form prescribed by the superintendent, accompanied by 
the fee prescribed in section 601, subsection 26 and an agreement to submit to the 
jurisdiction of the courts of this State and to the authority of the superintendent to 
examine the reinsurer's books and records. 
(2) An accredited reinsurer must be licensed to transact insurance or reinsurance 
in at least one state, or in the case of a United States branch of an alien reinsurer, 
that reinsurer must be entered through and licensed to transact insurance or 
reinsurance in at least one state. 
(3) An accredited reinsurer shall file with the superintendent, as part of its 
application and annually thereafter, a copy of its annual statement filed with the 
insurance department of its state of domicile or United States port of entry and a 
copy of its most recent audited financial statement. 
(4) A reinsurer applying for accreditation that maintains a surplus as regards to 
policyholders in an amount not less than $20,000,000 is deemed to be accredited 
if the reinsurer's application is not denied by the superintendent within 90 days 
after submission of the application.  The superintendent has the discretion to 
grant accreditation to an applicant with a surplus less than $20,000,000 subject to 
such terms and conditions as the superintendent determines to be necessary and 
appropriate for the protection of domestic ceding insurers and their policyholders. 
The superintendent may deny, suspend, revoke or place restrictions upon a reinsurer's 
accreditation, after notice and opportunity for hearing, for failure to comply with the 
requirements of this paragraph or for any grounds that would warrant similar action 
against the certificate of authority of an authorized insurer. 
Sec. B-4.  24-A MRSA §731-B, sub-§1, ¶B-2 is enacted to read: 
B-2.  Is certified as a reinsurer in this State and secures its obligations in accordance 
with this paragraph. 
(1)  To be eligible for certification, the assuming insurer must meet the following 
requirements: 
(a)  The assuming insurer must be domiciled and licensed to transact 
insurance or reinsurance in a jurisdiction determined by the superintendent to 
be a qualified jurisdiction pursuant to subparagraph (3); 
(b)  The assuming insurer must maintain minimum capital and surplus, or its 
equivalent, in an amount to be determined by the superintendent pursuant to 
rules adopted under subsection 7; 
(c)  The assuming insurer must maintain financial strength ratings from 2 or 
more rating agencies determined by the superintendent to be acceptable 
pursuant to rules adopted under subsection 7; 
(d)  The assuming insurer must agree to submit to the jurisdiction of this 
State and to appoint an agent for service of process in the same manner as 
provided for authorized insurers under section 421 and agree to provide 
security for 100% of the assuming insurer's liabilities attributable to 
reinsurance ceded by United States ceding insurers if the assuming insurer 
resists enforcement of a final United States judgment; 
(e)  The assuming insurer must agree to meet applicable information filing 
requirements as determined by the superintendent, both with respect to an 
initial application for certification and on an ongoing basis; 
(f)  The assuming insurer must pay the application fee prescribed in section 
601, subsection 26-A and, to the extent provided in rules adopted under 
subsection 7, must agree to pay reasonable costs of review; and 
(g)  The assuming insurer must satisfy any other requirements for 
certification established by the superintendent. 
(2)  An association including incorporated and individual unincorporated 
underwriters may be a certified reinsurer.  In order to be eligible for certification, 
in addition to satisfying the requirements of subparagraph (1): 
(a)  The association may satisfy its minimum capital and surplus 
requirements through the capital and surplus equivalents, net of liabilities, of 
the association and its members, which must include a joint central fund that 
may be applied to any unsatisfied obligation of the association or any of its 
members, in an amount determined by the superintendent to provide adequate 
protection; 
(b)  The incorporated members of the association may not be engaged in any 
business other than underwriting as a member of the association and must be 
subject to the same level of regulation and solvency control by the 
association's domiciliary regulator as are the unincorporated members; and 
(c)  Within 90 days after its financial statements are due to be filed with the 
association's domiciliary regulator, the association shall provide to the 
superintendent an annual certification by the association's domiciliary 
regulator of the solvency of each underwriter member of the association or, if 
a certification is unavailable, financial statements, prepared by independent 
public accountants, of each underwriter member of the association. 
(3)  The superintendent shall create and publish a list of qualified jurisdictions 
that are eligible to serve as the domiciliary regulators of certified reinsurers. 
(a)  In order to determine whether the domiciliary jurisdiction of an alien 
assuming insurer is eligible to be recognized as a qualified jurisdiction, the 
superintendent shall evaluate the appropriateness and effectiveness of the 
reinsurance supervisory system of the jurisdiction, both initially and on an 
ongoing basis, and consider the rights, benefits and the extent of reciprocal 
recognition afforded by the jurisdiction to reinsurers licensed and domiciled 
in the United States.  To be recognized as qualified, a jurisdiction must agree 
to share information and cooperate with the superintendent with respect to all 
certified reinsurers domiciled within that jurisdiction.  A jurisdiction may not 
be recognized as a qualified jurisdiction if the superintendent has determined 
that the jurisdiction does not adequately and promptly enforce final United 
States judgments and arbitration awards.  The superintendent may consider 
additional factors. 
(b)  If the National Association of Insurance Commissioners has published a 
list of recommended qualified jurisdictions, the superintendent shall consider 
that list in determining qualified jurisdictions.  If the superintendent 
recognizes a jurisdiction as qualified that does not appear on the list 
published by the National Association of Insurance Commissioners, the 
superintendent shall make detailed findings of fact supporting the recognition 
in accordance with criteria to be developed in rules adopted under subsection 
7. 
(c)  United States jurisdictions that are accredited by the National Association 
of Insurance Commissioners must be recognized as qualified jurisdictions. 
(d)  If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified 
jurisdiction, the superintendent may suspend the reinsurer's certification 
indefinitely, in lieu of revocation. 
(4)  The superintendent shall assign a rating to each certified reinsurer, giving due 
consideration to the financial strength ratings that have been assigned by rating 
agencies determined to be acceptable pursuant to rules adopted under subsection 
7.  The superintendent shall publish a list of all certified reinsurers and their 
ratings. 
(5)  A certified reinsurer shall secure all obligations assumed from United States 
ceding insurers under this subsection, and under comparable laws of other states, 
at a level consistent with its rating and in a form acceptable to the superintendent, 
in compliance with rules adopted under subsection 7. 
(a)  If the security is insufficient, the superintendent shall reduce the 
allowable credit by an amount proportionate to the deficiency and may 
impose further reductions in allowable credit upon finding that there is a 
material risk that the certified reinsurer's obligations will not be paid in full 
when due. 
(b)  The reinsurer may secure its obligations as a certified reinsurer through a 
multibeneficiary trust that meets the requirements of paragraph C and 
subsection 2-A, with the following modifications. 
(i)  The maximum credit allowable may exceed the value of the 
qualifying security to the extent provided in this subparagraph. 
(ii)  The minimum trusteed surplus is $10,000,000, rather than the 
amount specified in paragraph C. 
(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 as a certified reinsurer with reduced security 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. 
(c)  If a certified reinsurer does not secure its obligations through a qualifying 
multibeneficiary trust, it must secure its obligations to the ceding insurer 
consistent with the requirements of subsection 3, except that the maximum 
credit allowable may exceed the value of the qualifying security to the extent 
provided in this subparagraph. 
(d)  For purposes of this subparagraph, a certified reinsurer whose 
certification has been terminated for any reason must be treated as a certified 
reinsurer required to secure 100% of its obligations, unless the superintendent 
has continued to assign a higher rating, as permitted by other provisions of 
this section, to a certified reinsurer in inactive status or to a reinsurer whose 
certification has been suspended. 
(6)  If an applicant for certification has been certified as a reinsurer in a 
jurisdiction accredited by the National Association of Insurance Commissioners, 
the superintendent may defer to that jurisdiction's certification to grant 
certification in this State and may defer to the rating assigned by that jurisdiction. 
(7) A certified reinsurer that ceases to assume new business in this State may 
request to maintain its certification in inactive status in order to continue to 
qualify for a reduction in security for its in-force business.  An inactive certified 
reinsurer shall continue to comply with all applicable requirements of this 
subsection, and the superintendent shall assign a rating that takes into account, if 
relevant, the reasons why the reinsurer is not assuming new business.  
Sec. B-5.  24-A MRSA §731-B, sub-§1, ¶C, as amended by PL 2001, c. 47, §3, 
is further amended to read: 
C.  Maintains a trust fund in a qualified United States financial institution for the 
payment of the valid claims of its United States ceding insurers, their assigns and 
successors in interest. 
(1)  The assuming insurer shall report annually to the superintendent information 
substantially the same as that required to be reported on the National Association 
of Insurance Commissioners Annual Statement form by licensed insurers to 
enable the superintendent to determine the sufficiency of the trust fund. 
(2)  In the case of a single assuming insurer, the trust must consist of a trusteed 
account representing the assuming insurer's liabilities attributable to reinsurance 
ceded by United States ceding insurers and, in addition, unless the assuming 
insurer has permanently discontinued underwriting new business secured by the 
trust for at least 3 full years, must include a trusteed surplus of at least 
$20,000,000.  The trust must provide that after the assuming insurer has 
permanently discontinued underwriting new business secured by the trust for at 
least 3 full years, the insurance regulator with principal oversight of the trust may 
authorize a reduction in the required trusteed surplus, but only after a finding, 
based on an assessment of the risk, that the new required surplus level is adequate 
for the protection of United States ceding insurers, policyholders and claimants in 
light of reasonably foreseeable adverse loss development.  The risk assessment 
may involve an actuarial review, including an independent analysis of reserves 
and cash flows, and must consider all material risk factors, including when 
applicable the lines of business involved, the stability of the incurred loss 
estimates and the effect of the surplus requirements on the assuming insurer's 
liquidity or solvency.  The minimum required trusteed surplus may not be 
reduced to an amount less than 30% of the assuming insurer's liabilities 
attributable to reinsurance ceded by United States ceding insurers covered by the 
trust. 
(3-A)  A group including incorporated and individual unincorporated 
underwriters may secure its obligations with funds held in trust in compliance 
with the following standards. 
(a)  For reinsurance ceded under reinsurance agreements with an inception, 
amendment or renewal date on or after August 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 
of the group. 
(b) Notwithstanding the other provisions of this section, for reinsurance 
ceded under reinsurance agreements with an inception date on or before July 
31, 1995 December 31, 1992 and not amended or renewed after that date, the 
trust must consist of a trusteed account in an amount not less than the group's 
respective underwriters' several insurance and reinsurance liabilities 
attributable to business written in the United States. 
(c) In addition, the group shall maintain a trusteed surplus of at least 
$100,000,000 held jointly for the benefit of the United States domiciled 
ceding insurers of any member of the group for all years of account. 
An incorporated member of the group may not be engaged in any business other 
than underwriting as a member of the group and is subject to the same level of 
solvency regulation and control by the group's domiciliary regulator as are the 
unincorporated members. Within 90 days after its financial statements are due to 
be filed with the group's domiciliary regulator, the group shall provide to the 
superintendent an annual certification by the group's domiciliary regulator of the 
solvency of each underwriter member of the group or, if a certification is 
unavailable, financial statements prepared by independent public accountants. 
(4-A)  The superintendent in rules adopted pursuant to subsection 7 may establish 
alternative criteria for approval of a reinsurance trust if the superintendent 
determines that the criteria provide adequate protection to policyholders of 
United States ceding insurers and are in substantial conformance with standards 
approved by the National Association of Insurance Commissioners. 
(5)  The trust must be established in a form approved by the superintendent and 
consistent with any rules adopted by the superintendent pursuant to this section.  
The form of the trust and any amendments to the trust must also have been 
approved by the insurance regulatory official of the state where the trust is 
domiciled or of another state that, pursuant to the terms of the trust instrument, 
has accepted principal regulatory oversight of the trust.  The trust instrument 
must provide that contested claims are valid and enforceable upon the final order 
of any court of competent jurisdiction in the United States.  The trust must vest 
legal title to its assets in the trustees of the trust for the benefit of the assuming 
insurer's United States ceding insurers, their assigns and successors in interest.  
The trust and the assuming insurer are subject to examination, as determined by 
the superintendent, at the assuming insurer's expense.  The trust must remain in 
effect for as long as the assuming insurer has outstanding obligations due under 
the reinsurance agreements subject to the trust. 
(6)  The trustees of the trust shall report to the superintendent in writing by 
February 28th of each year, setting forth the balance of the trust and listing the 
trust's investments at the end of the preceding year and certifying the date of 
termination of the trust, if so planned, or certifying that the trust does not expire 
before December 31st of the current year. 
(7)  The corpus of the trust is to be valued as any other admitted asset or assets; 
Sec. B-6.  24-A MRSA §731-B, sub-§1, ¶D, as amended by PL 2001, c. 47, §4, 
is further amended to read: 
D.  Does not meet the requirements of paragraph A, B, B-1, B-2 or C, but only with 
respect to risks located in a jurisdiction where that reinsurance is required by law.  
The superintendent for good cause after notice and opportunity for hearing may 
disallow or reduce the credit otherwise permitted under this paragraph. 
Sec. B-7.  24-A MRSA §731-B, sub-§1-A is enacted to read: 
1-A.  The superintendent may suspend or revoke a reinsurer's accreditation or 
certification under subsection 1, after notice and opportunity for hearing, for failure to 
meet the applicable requirements of subsection 1 or on any ground that would warrant 
similar action against the certificate of authority of an authorized insurer. 
A.  A suspension or revocation under this subsection may not take effect until after 
the superintendent's order following a hearing, unless: 
(1)  The reinsurer waives its right to a hearing; 
(2)  The superintendent's order is based on regulatory action by the reinsurer's 
domiciliary jurisdiction or the voluntary surrender or termination of the 
reinsurer's eligibility to transact insurance or reinsurance business in its 
domiciliary jurisdiction or in the primary certifying state of the reinsurer under 
subsection 1, paragraph B-2, subparagraph (6); or 
(3)  The superintendent finds that an emergency requires immediate action and a 
court of competent jurisdiction has not stayed the superintendent's action. 
B.  While a reinsurer's accreditation or certification is suspended pursuant to this 
subsection, no reinsurance contract issued or renewed after the effective date of the 
suspension qualifies for credit under subsection 1 except to the extent that the 
reinsurer's obligations under the contract are secured in accordance with subsection 3.  
If a reinsurer's accreditation or certification is revoked pursuant to this subsection, no 
credit for reinsurance may be granted after the effective date of the revocation except 
to the extent that the reinsurer's obligations under the contract are secured in 
accordance with subsection 1, paragraph B-2, subparagraph (5) or subsection 3. 
C.  The superintendent may deny an application for accreditation or certification 
under subsection 1, or may impose conditions or restrictions on a reinsurer's 
accreditation or certification, on any ground for which accreditation or certification 
may be suspended or revoked. 
Sec. B-8.  24-A MRSA §731-B, sub-§3, ¶B, as enacted by PL 1989, c. 846, Pt. 
E, §2 and affected by §4, is amended to read: 
B.  Securities listed by the Securities Valuation Office of the National Association of 
Insurance Commissioners, including those designated as exempt from filing in the 
purposes and procedures manual of the Securities Valuation Office, and qualifying as 
admitted assets; or 
Sec. B-9.  24-A MRSA §731-D, as enacted by PL 1989, c. 846, Pt. E, §2 and 
affected by §4, is amended to read: 
§731-D.  Notification of reinsurance changes 
Upon request of the The superintendent, an may by rule or order require an insurer 
shall to promptly inform the superintendent in writing of the cancellation or any other 
material change of any of the insurer's reinsurance treaties or arrangements.  Rules 
adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 
375, subchapter 2-A. 
Sec. B-10.  24-A MRSA §731-E is enacted to read: 
§731-E.  Reinsurance concentration risk 
1.  Reinsurance claim exposure.  An insurer shall manage its reinsurance 
recoverables proportionate to its own book of business.  A domestic insurer shall notify 
the superintendent within 30 days after reinsurance recoverables from any single 
assuming insurer, or group of affiliated assuming insurers, exceed 50% of the insurer's 
last reported surplus to policyholders or after it is determined that reinsurance 
recoverables from any single assuming insurer, or group of affiliated assuming insurers, 
are likely to exceed this limit. 
2.  Diversification.  An insurer shall diversify its reinsurance program as 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 year 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. 
3.  Risk management.  A notice provided by an insurer under subsection 1 or 2 must 
include a demonstration that the insurer is safely managing the exposure. 
PART C 
Sec. C-1.  24-A MRSA §951, as amended by PL 1983, c. 346, §1, is repealed and 
the following enacted in its place: 
§951.  Short title 
This subchapter may be known and cited as "the Standard Valuation Law." 
Sec. C-2.  24-A MRSA §951-A is enacted to read: 
§951-A.  Definitions 
As used in this subchapter, unless the context otherwise indicates, the following 
terms have the following meanings. 
1.  Appointed actuary.  "Appointed actuary" means the actuary appointed by an 
insurer pursuant to section 952-A, subsection 1. 
2.  NAIC.  "NAIC" means the National Association of Insurance Commissioners or 
its successor organization. 
3.  Operative date.  "Operative date," with respect to the initial adoption of the 
valuation manual, means January 1st of the first calendar year beginning at least 6 months 
after all of the following events have occurred: 
A.  The valuation manual has been adopted by the NAIC by an affirmative vote of at 
least 42 members or 3/4 of the members voting, whichever is greater; 
B.  The NAIC's model standard valuation law, as amended by the NAIC in 2009, or 
legislation including substantially similar terms and provisions has been enacted by 
states representing greater than 75% of the direct premiums written as reported in the 
following annual statements submitted for 2008: life, accident and health annual 
statements; health annual statements; or fraternal annual statements; and 
C.  The NAIC's model standard valuation law, as amended by the NAIC in 2009, or 
legislation including substantially similar terms and provisions has been enacted by at 
least 42 of the following 55 jurisdictions: the 50 states of the United States, American 
Samoa, the District of Columbia, Guam, the Commonwealth of Puerto Rico and the 
United States Virgin Islands. 
4.  Policyholder behavior.  "Policyholder behavior" means any action a 
policyholder, contract holder or any other person with the right to elect options, such as a 
certificate holder, may take under a policy or contract subject to this subchapter, 
including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, 
annuitization or benefit elections prescribed by the policy or contract, but excluding 
events of mortality or morbidity that result in benefits prescribed in their essential aspects 
by the terms of the policy or contract. 
5.  Principle-based valuation.  "Principle-based valuation" means a reserve 
valuation that uses one or more methods or one or more assumptions determined by the 
insurer and is subject to section 960. 
6.  Qualified actuary.  "Qualified actuary" means an individual who is qualified to 
sign the applicable statement of actuarial opinion in accordance with the American 
Academy of Actuaries qualification standards for actuaries signing such statements and 
who meets all applicable requirements specified in the valuation manual or by rule 
adopted by the superintendent. 
7.  Subject lines of insurance.  "Subject lines of insurance" means life insurance, 
accident and health insurance and deposit-type contracts, as those terms are defined in the 
valuation manual. 
8.  Tail risk.  "Tail risk" means a risk for which the frequency of low-probability 
events is higher than expected under a normal probability distribution or the risk of events 
of very significant magnitude. 
9.  Valuation manual.  "Valuation manual" means the manual of valuation 
instructions adopted by the NAIC as specified in section 959. 
Sec. C-3.  24-A MRSA §952, sub-§1, 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 shall must be limited to its United States business; and may certify the amount 
of any such reserves, specifying consistent when applicable with the valuation manual.  
For policies and contracts issued before the operative date of the valuation manual, the 
superintendent shall specify 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 when such certificate states the 
valuation to have been made in a specified manner according to which the aggregate 
reserves would be at least as large as if they had been computed in the manner prescribed 
by law of that state or jurisdiction. 
Sec. C-4.  24-A MRSA §952, sub-§3 is enacted to read: 
3.  Beginning on the operative date of the valuation manual, a life or health insurer 
and a casualty or multiple lines insurer transacting health insurance shall comply with the 
applicable requirements of this subchapter if the insurer is required to hold a certificate of 
authority to write one or more subject lines of insurance in this State or if the insurer has 
written, issued or reinsured contracts of one or more subject lines of insurance in this 
State and has at least one such policy in force or on claim. 
Sec. C-5.  24-A MRSA §952-A, as amended by PL 2011, c. 320, Pt. A, §6, is 
further amended to read: 
§952-A.  Actuarial opinion of reserves 
1.  General.  A life An insurer doing business in this State subject to this subchapter 
shall annually appoint a qualified actuary, in accordance with any applicable 
requirements of the valuation manual or rules adopted by the superintendent, and submit 
the opinion of a qualified the appointed actuary as to whether the reserves and related 
actuarial items of that life 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.  The 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.  In all other cases, the 
superintendent by rule shall define the specifics of this the opinion and.  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 life 
Except as otherwise authorized or required in accordance with rules adopted by the 
superintendent or applicable provisions of the valuation manual, an insurer, except 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 actuary may consider necessary in the opinion required by this 
subsection. 
3.  Requirement for opinion under subsection 2.  An opinion required by 
subsection 2 is governed by the following provisions. 
A.  A memorandum, in form and substance acceptable to the superintendent as 
specified in the valuation manual or by rule, must be prepared to support the actuarial 
opinion. 
B.  If the insurer fails to provide a supporting memorandum at the request of the 
superintendent within a period specified in the valuation manual or by rule or the 
superintendent determines that the supporting memorandum provided by the insurer 
fails to meet the prescribed standards prescribed by the rules or is otherwise 
unacceptable to the superintendent, the superintendent may engage a qualified 
actuary at the expense of the insurer to review the opinion and the basis for the 
opinion and prepare a supporting memorandum as required by the superintendent. 
4.  Requirement for all opinions.  An opinion required pursuant to subsection 1 or 2 
is governed by the following provisions. 
A.  The opinion must be submitted with the annual statement reflecting the valuation 
of reserve liabilities for each year ending on or after December 31, 1995. 
B.  The opinion must apply to all business in force, including individual and group 
health insurance plans, in a form and substance acceptable to the superintendent as 
specified by rule. 
B-1.  The opinion must comply with the requirements of any applicable rules and, on 
and after the operative date of the valuation manual, must comply with all applicable 
requirements of the valuation manual. 
C.  The opinion must be based on standards adopted by the actuarial standards board 
Actuarial Standards Board or its successor and, to the extent applicable, on those any 
additional standards as prescribed by the valuation manual or prescribed by the 
superintendent by rule prescribes. 
D.  In the case of an opinion required to be submitted by a foreign or alien insurer, 
the superintendent may accept the opinion filed by that insurer with the insurance 
supervisory official of another state if the superintendent determines that the opinion 
reasonably meets the requirements applicable to an insurer domiciled in this State. 
E.  For the purposes of this section, "qualified actuary" means a member in good 
standing of the American Academy of Actuaries who meets the requirements set 
forth in the rules of the American Academy of Actuaries. 
F.  Except in cases of fraud or willful misconduct, a qualified the appointed actuary is 
not liable for damages to any person, other than the insurer and the superintendent, 
for any act, error, omission, decision or conduct with respect to the qualified 
appointed actuary's opinion. 
G.  Disciplinary action by the The superintendent may take disciplinary action against 
the insurer or the qualified appointed actuary must be defined in rules established by 
the superintendent pursuant to section 12-A for knowing violations of this section and 
may establish additional grounds for disciplinary action by rule. 
H.  Except as provided in paragraphs K, L and M, any memorandum in support of the 
opinion and any other documents, materials or other information provided by the 
insurer to the superintendent in connection with the memorandum are confidential, 
must be kept confidential by the superintendent and are not subject to subpoena or 
discovery, nor admissible in evidence in any private civil action.  The superintendent 
is authorized to 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. 
I.  Neither the superintendent nor any person who received documents, materials or 
other information while acting under the authority of the superintendent is permitted 
or required to testify in any private civil action concerning any confidential 
documents, materials or information pursuant to paragraph H. 
J.  Disclosure to the superintendent under this section or as a result of sharing of 
documents, materials or other information pursuant to section 216 does not constitute 
a waiver of any applicable privileges or claim of confidentiality in the documents, 
materials or other information. 
K.  A memorandum in support of the opinion, and any other documents, materials or 
other information provided by the life insurer to the superintendent in connection 
with the memorandum, may be subject to subpoena for the purpose of defending an 
action seeking damages from the actuary submitting the memorandum by reason of 
an action pursuant to this section or by rule adopted pursuant to this section. 
L.  The memorandum or other documents, materials or other information may 
otherwise be released by the superintendent with the written consent of the life 
insurer or upon a written request by the American Academy of Actuaries stating that 
the memorandum or other documents, materials or other information is required for 
the purpose of professional disciplinary proceedings and setting forth procedures 
satisfactory to the superintendent for preserving the confidentiality of the 
memorandum or other documents, materials or other information. 
M.  Once any portion of a memorandum is cited by the life insurer in its marketing or 
is cited by the life insurer before a governmental agency other than a state insurance 
agency or is released by the life insurer to the news media, all portions of the 
memorandum become public records. 
5.  Applicability to health carriers.  A health carrier not otherwise subject to this 
section or section 993 shall file an actuarial opinion in accordance with the applicable 
National Association of Insurance Commissioners annual statement instructions.  For 
purposes of this section, "health carrier" means an insurer, health maintenance 
organization, nonprofit corporation subject to Title 24 or fraternal benefit society that 
provides health insurance or comparable health benefits.  This section and rules adopted 
pursuant to this section apply to health carriers to the extent provided in the valuation 
manual.  Before the operative date of the valuation manual, this section and rules adopted 
pursuant to this section apply to health carriers to the extent that they specifically refer to 
health carriers or impose requirements that are consistent with and no more stringent than 
the annual statement instructions. 
Sec. C-6.  24-A MRSA §952-B is enacted to read: 
§952-B.  Applicability of reserving methodologies 
Sections 953 to 958-A do not apply to a policy or contract that is issued on or after 
the operative date of the valuation manual and is subject to section 959, unless those 
sections are made applicable by reference in whole or part in the valuation manual. 
Sec. C-7.  24-A MRSA §955, sub-§2, as enacted by PL 1993, c. 634, Pt. B, §2, is 
amended to read: 
2.  Minimum aggregate reserves for all policies.  The aggregate reserves for all 
policies, contracts and benefits may not be less than the aggregate reserves determined 
necessary by the qualified appointed actuary in the opinion required by section 952-A. 
Sec. C-8.  24-A MRSA §956, sub-§2, as enacted by PL 1993, c. 634, Pt. B, §3, is 
amended to read: 
2.  Lower standard of valuation.  Any insurer that adopts any standard of valuation 
producing greater aggregate reserves than those calculated according to the minimum 
standard provided in section 955 may adopt, with the approval of the superintendent, any 
lower standards of valuation, but not lower than the minimum required, provided, 
however, except that for the purposes of this section the holding of additional reserves 
previously determined necessary by a qualified the appointed actuary in the opinion 
required by section 952-A may not be determined to be the adoption of a higher standard 
of valuation. 
Sec. C-9.  24-A MRSA §§959 to 962 are enacted to read: 
§959.  Reserves subject to valuation manual 
1.  General requirement.  On and after the operative date of a valuation manual that 
the superintendent has determined meets the requirements of this section, 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: 
A.  For policies and contracts issued on and after the operative date of the valuation 
manual, in accordance with the valuation manual; 
B.  For policies and contracts described in sections 953 to 958-A and issued before 
the operative date of the valuation manual, in accordance with those sections; and 
C.  For health insurance policies and contracts issued before the operative date of the 
valuation manual, and any other policies and contracts outside the scope of 
paragraphs A and B, in accordance with rules adopted by the superintendent. 
2.  Necessary provisions.  The valuation manual must specify all of the following: 
A.  Definitions of the policies and contracts subject to this section; 
B.  The following minimum valuation standards for all policies and contracts subject 
to this section: 
(1)  The commissioners reserve valuation method for life insurance contracts, 
other than annuity contracts; 
(2)  The commissioners annuity reserve valuation method for annuity contracts; 
and 
(3)  Minimum reserves for all other policies or contracts; 
C.  Provisions specifying which policies and contracts or types of policies and 
contracts are subject to section 960 and specifying the minimum valuation standards 
consistent with those provisions; 
D.  For policies and contracts subject to section 960: 
(1)  Requirements for the format of reports to the superintendent under section 
960, subsection 3, paragraph C, which must include information necessary to 
determine whether the valuation is appropriate and in compliance with this 
subchapter; 
(2)  Assumptions to be prescribed for risks over which the insurer does not have 
significant control or influence; and 
(3)  Procedures for corporate governance and oversight of the actuarial function 
and a process for appropriate waiver or modification of such procedures; 
E.  For policies and contracts not subject to section 960, a minimum valuation 
standard that either: 
(1)  Is consistent with the minimum standard of valuation for policies and 
contracts issued before the operative date of the valuation manual; or 
(2)  Develops reserves that quantify the benefits and guarantees, and the funding, 
associated with the policies and contracts and their risks at a level of 
conservatism that reflects conditions that include unfavorable events that have a 
reasonable probability of occurring; 
F.  Other requirements, including, but not limited to, those relating to reserve 
methods, models for measuring risk, generation of economic scenarios, assumptions, 
margins, use of insurer experience, risk measurement, disclosure, certifications, 
reports, actuarial opinions and memoranda, transition rules and internal controls; and 
G.  The data and form of the data required under section 961.  The requirements must 
specify to whom the data must be submitted and may specify other requirements, 
including requirements with respect to data analyses and reporting of analyses. 
3.  Supplementation and resolution of conflicts.  In the absence of a specific 
valuation requirement or if the superintendent determines that a specific valuation 
requirement in the valuation manual is not consistent with the requirements or purposes 
of this subchapter, an insurer shall comply with minimum valuation standards prescribed 
by the superintendent by rule or order. 
4.  Examination.  For an insurer subject to this section, the superintendent may hire, 
contract with or otherwise engage a qualified actuary, at the insurer's expense, to perform 
an actuarial examination of the insurer and provide an opinion on the appropriateness of 
any reserve assumption or method used by the insurer or to review and provide an 
opinion on the insurer's compliance with any requirement of this subchapter.  The 
superintendent may rely on any actuarial opinion issued on behalf of another insurance 
regulator in the United States that is relevant to an insurer's compliance with this 
subchapter. 
5.  Corrections.  The superintendent may require an insurer to change any 
assumption or method as determined necessary by the superintendent to comply with the 
requirements of the valuation manual or this subchapter, and the insurer shall adjust the 
reserves as required by the superintendent. 
6.  Violations.  Violations of this subchapter are subject to all remedies specified in 
section 12-A or otherwise available by law. 
7.  Changes to valuation manual.  Unless a later effective date is specified or the 
superintendent has disapproved the change, a change to the valuation manual is effective 
on January 1st following the adoption of the change by an affirmative vote of the NAIC 
representing: 
A.  At least 3/4 of the NAIC members voting; 
B.  At least a majority of the total NAIC membership; and 
C.  Jurisdictions totaling greater than 75% of the aggregate written direct premiums 
reported in the most recently available life, accident and health annual statements; 
health annual statements; and fraternal annual statements. 
§960.  Requirements for principle-based reserves 
1.  Scope.  This section applies to all policies and contracts for which principle-based 
reserving is required by the valuation manual, unless exempted by the superintendent in 
accordance with the following standards: 
A.  An exemption under this subsection may not be granted unless the insurer is 
licensed and doing business exclusively in this State; 
B.  The exemption must be in writing; 
C.  The superintendent may rescind or modify the exemption in writing at any time, 
with reasonable notice to the insurer; 
D.  The exemption may apply to all business written by the insurer or to specific 
policy or contract forms or product lines; and 
E.  An insurer granted an exemption under this subsection shall value its reserves 
using the assumptions and methods used before the operative date of the valuation 
manual, in addition to any requirements established by the superintendent by rule or 
by the terms of the order granting the exemption. 
2.  Standards.  An insurer shall establish reserves for policies and contracts subject 
to this section using a valuation methodology that meets all applicable requirements of 
the valuation manual and that: 
A.  Quantifies the benefits and guarantees, and the funding, associated with the 
policies and contracts and their risks at a level of conservatism that reflects conditions 
that include unfavorable events that have a reasonable probability of occurring during 
the lifetime of the policies and contracts.  For polices and contracts with significant 
tail risk, the methodology must reflect conditions appropriately adverse to quantify 
the tail risk; 
B.  Incorporates assumptions, risk analysis methods and financial models and 
management techniques that are consistent with, but not necessarily identical to, 
those used within the insurer's overall risk assessment process, while recognizing 
potential differences in financial reporting structures and any prescribed assumptions 
or methods; 
C.  Incorporates assumptions that are derived in one of the following manners: 
(1)  The assumption is prescribed in the valuation manual; or 
(2) For assumptions that are not prescribed in the valuation manual, the 
assumptions are: 
(a)  Established using the insurer's available experience, to the extent that it is 
relevant and statistically credible; or 
(b)  To the extent that insurer-specific data is not available, relevant or 
statistically credible, established using other relevant, statistically credible 
experience; and 
D.  Provides margins for uncertainty including adverse deviation and estimation 
error, such that the greater the uncertainty the larger the margin and resulting reserve. 
3.  Oversight and controls.  An insurer using a principle-based valuation for one or 
more policies or contracts subject to this section as specified in the valuation manual 
shall: 
A.  Establish procedures for corporate governance and oversight of the actuarial 
valuation function consistent with those described in the valuation manual; 
B.  Provide to the superintendent and the insurer's board of directors an annual 
certification of the effectiveness of the internal controls with respect to the principle-
based valuation.  Such controls must be designed to ensure that all material risks 
inherent in the liabilities and associated assets subject to principle-based valuation are 
included in the valuation and that valuations are made in accordance with the 
valuation manual.  The certification must be based on the controls in place as of the 
end of the preceding calendar year; and 
C.  Develop, and file with the superintendent upon request, a principle-based 
valuation report that complies with standards prescribed in the valuation manual. 
4.  Formulaic components.  A principle-based valuation may include a formulaic 
reserve component and must do so when prescribed by the valuation manual or required 
by the superintendent. 
§961.  Experience reporting 
For all policies and contracts in force on or after the operative date of the valuation 
manual, an insurer shall submit mortality, morbidity, policyholder behavior and expense 
experience data, as applicable, and other data as prescribed in the valuation manual. 
§962.  Confidentiality 
1.  Information subject to this section.  For purposes of this section, "protected 
valuation information" means: 
A.  A memorandum in support of an opinion submitted under section 952-A and any 
other documents, materials and other information, including, but not limited to, all 
working papers, and copies thereof, created, produced or obtained by or disclosed to 
the superintendent or any other person in connection with the memorandum; 
B.  All documents, materials and other information, including, but not limited to, all 
working papers, and copies thereof, created, produced or obtained by or disclosed to 
the superintendent or any other person in the course of an examination made under 
section 959, subsection 4 that would be confidential under section 225, subsection 3 
if they had been prepared or obtained under section 221; 
C.  Any reports, documents, materials and other information developed by an insurer 
in support of, or in connection with, an annual certification of internal controls under 
section 960, subsection 3, paragraph B and any other documents, materials and other 
information, including, but not limited to, all working papers, and copies thereof, 
created, produced or obtained by or disclosed to the superintendent or any other 
person in connection with such reports, documents, materials and other information; 
D.  Any principle-based valuation report developed under section 960, subsection 3, 
paragraph C and any other documents, materials and other information, including, but 
not limited to, all working papers, and copies thereof, created, produced or obtained 
by or disclosed to the superintendent or any other person in connection with such a 
report; 
E.  Any documents, materials, data and other information submitted by an insurer 
under section 961, referred to in this paragraph as "experience data," and any other 
documents, materials, data and other information, including, but not limited to, all 
working papers, and copies thereof, created or produced in connection with such 
experience data that include any potentially insurer-identifying or personally 
identifiable information and that are provided to or obtained by the superintendent or 
any other person and any other documents, materials, data and other information, 
including, but not limited to, all working papers, and copies thereof, created, 
produced or obtained by or disclosed to the superintendent or any other person in 
connection with such experience data and materials; and 
F.  Any information received by the superintendent from the Actuarial Board for 
Counseling and Discipline or its successor related to a memorandum or report 
described in paragraph A or D, if the information has been provided with notice or 
the understanding that it is confidential or privileged under applicable law. 
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 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. 
A.  Neither the superintendent nor any person who receives documents, materials or 
other information while acting under the authority of the superintendent is permitted 
or required to testify in any private civil action concerning any protected valuation 
information. 
B.  Disclosure to the superintendent under this section or as a result of sharing of 
documents, materials or other information pursuant to section 216 does not constitute 
a waiver of any applicable privilege or claim of confidentiality with regard to the 
documents, materials or other information. 
C.  The superintendent may share protected valuation information described in 
subsection 1, paragraphs A and D with the Actuarial Board for Counseling and 
Discipline or its successor upon a request stating that the information is required for 
the purpose of professional disciplinary proceedings and that the disciplinary entity 
agrees, and has the legal authority to agree, to maintain the confidentiality and 
privileged status of the information in the same manner and to the same extent as 
required for the superintendent.  The superintendent may request and receive 
confidential information described in subsection 1, paragraph F from the Actuarial 
Board for Counseling and Discipline or its successor.  The superintendent may enter 
into information-sharing agreements to facilitate the exchange of information under 
this paragraph. 
D.  For protected valuation information described in subsection 1, paragraphs A and 
D, the confidentiality provided by this subsection may be limited or terminated as 
follows: 
(1)  The information may be subject to subpoena for the purpose of defending an 
action seeking damages from the appointed actuary submitting the actuarial 
memorandum or principle-based valuation report; 
(2)  The information may be released with the written consent of the insurer; and 
(3)  If any portion of an actuarial memorandum or principle-based valuation 
report is cited by the insurer in its marketing or is publicly volunteered by the 
insurer before a governmental agency other than a state insurance agency or is 
released by the insurer to the news media, all portions of the memorandum or 
report become public records. 
Sec. C-10.  24-A MRSA §992, sub-§1, as enacted by PL 2007, c. 281, §2 and 
affected by §3, is repealed and the following enacted in its place: 
1.  Covered kinds of insurance.  "Covered kinds of insurance" means property 
insurance as defined in section 705 and casualty insurance as defined in section 707 and 
does not include health insurance as defined in section 704, unless required by the 
applicable NAIC annual statement instructions to be included in the property and casualty 
actuarial opinion of a casualty insurer or multiple lines insurer, or property insurance 
written by domestic mutual assessment insurers pursuant to chapter 51. 
Sec. C-11.  24-A MRSA §2532-A, sub-§8, ¶¶F and G, as enacted by PL 1983, 
c. 346, §13, are amended to read: 
F.  Any approved commissioners standard ordinary mortality tables, adopted after 
1980 by the National Association of Insurance Commissioners, that are approved by 
regulation promulgated by the superintendent for use in determining the minimum 
nonforfeiture standard in accordance with paragraph H, may be substituted for the 
Commissioners 1980 Standard Ordinary Mortality Table with or without 10-year 
select mortality factors or for the Commissioners 1980 Extended Term Insurance 
Table; and 
G.  Any approved commissioners standard industrial mortality tables, adopted after 
1980 by the National Association of Insurance Commissioners, that are approved by 
regulation promulgated by the superintendent for use in determining the minimum 
nonforfeiture standard in accordance with paragraph H, may be substituted for the 
Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 
Industrial Extended Term Insurance Table.; and 
Sec. C-12.  24-A MRSA §2532-A, sub-§8, ¶H is enacted to read: 
H.  For policies issued before the operative date of the valuation manual, as defined 
in section 951-A, subsection 3, the superintendent may adopt rules approving 
commissioners standard mortality tables for use in determining the minimum 
nonforfeiture standard.  Rules adopted pursuant to this paragraph are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A.  For policies issued 
on or after the operative date of the valuation manual, the applicable commissioners 
standard mortality tables specified in the valuation manual are approved for use in 
determining the minimum nonforfeiture standard unless superseded by rule adopted 
by the superintendent. 
Sec. C-13.  24-A MRSA §2532-A, sub-§9, as enacted by PL 1983, c. 346, §13, is 
amended to read: 
9.    The nonforfeiture interest rate per annum for any policy issued in a particular 
calendar year shall must be equal to 125% of the calendar year statutory valuation interest 
rate for that policy as defined in the Standard Valuation Law, rounded to the nearer 1/4 of 
1%, except as otherwise provided in the valuation manual for policies issued on and after 
the operative date of the valuation manual, as defined in section 951-A, subsection 3. 
PART D 
Sec. D-1.  24-A MRSA §6451, sub-§6, as amended by PL 1997, c. 81, §3, is 
repealed and the following enacted in its place: 
6.  Negative trend.  "Negative trend" means:  
A.  With respect to a life or health insurer, a negative trend over a period of time, as 
determined in accordance with the trend test calculation included in the risk-based 
capital instructions; and 
B.  With respect to a property and casualty insurer, a trend that meets the triggering 
criteria, as determined in accordance with the trend test calculation included in the 
risk-based capital instructions. 
Sec. D-2.  24-A MRSA §6453, sub-§1, ¶A, as amended by PL 2009, c. 511, Pt. 
E, §2, is further amended to read: 
A.  The filing of a risk-based capital report by an insurer that indicates that: 
(1)  The insurer's total adjusted capital is greater than or equal to its regulatory 
action level risk-based capital but less than its company action level risk-based 
capital; or 
(2)  The insurer has total adjusted capital that is greater than or equal to its 
company action level risk-based capital but has a negative trend, if its total 
adjusted capital is less than the product of its authorized control level risk-based 
capital and: 3.0. 
(a) If the insurer is a life or health insurer, 2.5; or 
(b) If the insurer is a health organization as described in section 6451-A, 
subsection 2, 3.0; 
PART E 
Sec. E-1.  24-A MRSA §421, sub-§7, as enacted by PL 1999, c. 113, §18, is 
amended to read: 
7.    Any person or entity required by Title 24 or this Title to appoint an agent for 
service of process who does not have a valid appointment on file with the superintendent 
or required by applicable law to appoint the superintendent as agent for service of process 
is deemed to have appointed the superintendent as agent for service of process, and 
process may be served within this State in the same manner as provided in section 2105.  
This subsection does not relieve that person or entity from the any requirement to appoint 
an agent for service of process or from the applicable penalties for failure to comply with 
that requirement. 
Sec. E-2.  24-A MRSA §4435, sub-§6, as amended by PL 1989, c. 67, §2, is 
further amended to read: 
6.  Member insurer.  "Member insurer" means any authorized insurer which that 
writes any kind of insurance to which this subchapter applies and that is not a risk 
retention group as defined in section 6093, subsection 13.  If an insurer is authorized at 
the time of an insolvency and subsequently is approved to withdraw its license authority 
for the kinds of insurance covered by any account to which claims relating to the 
insolvency are allocated, the withdrawn insurer shall continue to be a member of each 
account solely for purposes of assessments relating to claims resulting from the 
insolvency until these claims are paid or otherwise extinguished. 
Sec. E-3.  24-A MRSA §6095, sub-§1, ¶C, as amended by PL 1997, c. 592, §73, 
is further amended to read: 
C.  A designation of an agent for the purpose of receiving service of legal documents 
or process.  That designation is subject to the provisions of section 421, except that 
the appointment of a private agent is optional.  A risk retention group that does not 
elect to designate an agent in accordance with section 421, subsection 1 shall appoint 
the superintendent as its agent. 
Sec. E-4.  24-A MRSA §6098, sub-§2, as amended by PL 1997, c. 592, §74, is 
further amended to read: 
2.  Registration.  The purchasing group shall register with the superintendent and 
designate an the superintendent as its agent solely for the purpose of receiving service of 
legal documents or process, except that the requirements do not apply in the case of a 
purchasing group:  
A.  That in any state of the United States:  
(1)  Was domiciled before April 2, 1986; and  
(2)  Is domiciled on and after October 27, 1986; 
B.  That:  
(1)  Before October 27, 1986, purchased insurance from an insurance carrier 
licensed in any state; and  
(2)  Since October 27, 1986, purchased its insurance from an insurance carrier 
licensed in any state; 
C.  That was a purchasing group under the requirements of the Product Liability 
Retention Act of 1981 before October 27, 1986; and 
D.  That does not purchase insurance that was not authorized for purposes of an 
exemption under that Act, as in effect before October 27, 1986.  That designation 
shall be subject to section 421. 
Sec. E-5.  24-A MRSA §6718, as amended by PL 2011, c. 90, Pt. I, §7, is repealed 
and the following enacted in its place: 
§6718.  Rules 
1.  Authority.  The superintendent may adopt rules to implement this chapter.  Rules 
adopted pursuant to this subsection are major substantive rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
2.  Risk retention groups.  Notwithstanding section 6719, the superintendent shall 
adopt rules establishing financial standards and corporate governance standards for 
captive insurance companies that are risk retention groups as defined in section 6093, 
subsection 13.  Such rules may include, but are not limited to, rules making specified 
provisions of this Title applicable to captive insurance companies that are risk retention 
groups, subject to any modifications that the superintendent determines to be appropriate 
to the nature of a risk retention group's business.  Rules adopted pursuant to this 
subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill amends several provisions of the Maine Insurance Code to incorporate 
recent amendments to model laws adopted by the National Association of Insurance 
Commissioners, or NAIC, and to make related technical changes.  These amendments 
maintain the State's compliance with uniform financial solvency standards and with the 
NAIC's accreditation requirements for state insurance regulators. 
Part A amends the insurance holding company laws to conform them to the current 
version of the relevant NAIC Model Act.  It reorganizes provisions governing 
examinations, confidentiality and proposed change-of-control transactions, incorporating 
additional disclosure requirements and specific provisions on divestitures of controlling 
interests.  It establishes new reporting requirements, including an enterprise risk report 
requirement and an own risk and solvency assessment requirement, and amends the 
review process with respect to disclaimers of affiliation and makes the process applicable 
to proposed acquisitions of presumptive control.  It allows the Superintendent of 
Insurance to participate in consolidated approval proceedings for multistate transactions 
and in supervisory colleges, which are temporary or permanent forums for 
communication and cooperation among the regulators supervising an international 
insurance holding company system. 
Part B amends the reinsurance laws to conform them to the current version of the 
NAIC's Credit for Reinsurance Model Act.  It makes financially strong reinsurers 
domiciled in qualifying jurisdictions outside the United States eligible to apply for 
approval as certified reinsurers, with lower collateral requirements commensurate with 
their financial strength and domiciliary oversight. 
Part C amends Maine's Standard Valuation Law to conform it to the current version 
of the relevant NAIC Model Act, incorporating the new principle-based reserving 
requirements that will become effective when adopted by a supermajority of states. 
Part D amends the risk-based capital laws to strengthen the NAIC trend test and to 
make it applicable to companies transacting all types of insurance. 
Part E gives the superintendent rule-making authority to establish financial standards 
and corporate governance standards for captive insurance companies that are risk 
retention groups, to maintain compliance with NAIC accreditation requirements.  It also 
makes various technical corrections to the laws governing risk retention groups for 
internal consistency and consistency with federal law.