An Act To Update the Maine Insurance Code To Maintain Conformance with Uniform National Standards
Maine Legislature, Session 128, LD 1544
Committee: Insurance and Financial Services
Sponsors: WHITTEMORE
Amends: 24 MRSA §2306, 24 MRSA §2317-B, 24-A MRSA §423-A, 24-A MRSA §423-G, 24-A MRSA §1102, 24-A MRSA §1152, 24-A MRSA §4134, 24-A MRSA §4204-A, 24-A MRSA §4208, 24-A MRSA §4222-B, 24-A MRSA §221, 24-A MRSA §222, 24-A MRSA §223, 24-A MRSA §731-B, 24-A MRSA §4379, 24-A MRSA §4386, 24-A MRSA §6401, 24-A MRSA §6402, 24-A MRSA §6403, 24-A MRSA §6404, 24-A MRSA §6405, 24-A MRSA §6406, 24-A MRSA §6407, 24-A MRSA §6456, 24-A MRSA §6458, 24-A MRSA §6460, 24-A MRSA §6701, 24-A MRSA §6702, 24-A MRSA §6706, 24-A MRSA §6707, 24-A MRSA §6715, 24-A MRSA §6724

Legislative Document
No. 1544
S.P. 539
In Senate, April 27, 2017
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.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator WHITTEMORE of Somerset.
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-1.  24 MRSA §2306, as amended by PL 1997, c. 592, §3, is further 
amended to read: 
§2306.  Reports 
Annually, on or before March 1st, every Every corporation organized under this 
chapter shall file in the office of the superintendent a statement
 annual and quarterly 
financial statements substantially similar to those required of health insurers under Title 
24-A, sections 423, 423-A and 423-D verified by at least 2 of the principal officers of that 
corporation showing its condition on the previous December 31st
.  The statement must be 
on an annual or quarterly
 statement blank of the National Association of Insurance 
Commissioners for use by nonprofit hospital or medical service corporations, be prepared 
in accordance with the association's annual or quarterly
 statement instructions, follow 
practices and procedures prescribed by the association's accounting practices and 
procedures manual and be accompanied by any useful or necessary modification or 
adaptation and any additional information required by the superintendent.  The 
superintendent may by rule or order require the filing of more frequent reports. 
A nonprofit hospital or medical service corporation that controls and operates a 
health maintenance organization as a division or line of business of the corporation shall 
file on a continuing basis any additional periodic financial reports required by the 
superintendent by rule Title 24-A, section 4208. 
Sec. A-2.  24 MRSA §2317-B, sub-§§1-A and 1-B are enacted to read: 
1-A.  Title 24-A, section 423-C.  Reports of material transactions, Title 24-A, section 
423-C; 
1-B.  Title 24-A, section 423-G.  Corporate governance annual disclosure, Title 
24-A, section 423-G; 
Sec. A-3.  24 MRSA §2317-B, sub-§16-B is enacted to read: 
16-B.  Title 24-A, chapter 11.  Assets and liabilities, Title 24-A, chapter 11; 
Sec. A-4.  24-A MRSA §423-A, as enacted by PL 1985, c. 330, §6, is amended to 
read: 
§423-A.  Interim financial reporting requirements 
1.  Quarterly statement.  Within 45 days No later than the 15th day of the 2nd 
month following the close of any calendar quarter, except the 4th quarter, an authorized 
insurer,
 that is subject to the requirements of section 423, shall upon the superintendent's 
request, made to the authorized insurer, not later than the end of the quarter to be reported 
upon file a quarterly report statement of financial condition with the Bureau of Insurance 
superintendent
. 
2.  Form and content.  The quarterly report shall statement must be in the form 
requested by the superintendent and shall contain such information as the superintendent 
deems necessary or if the superintendent elects shall be conformed to the reporting format 
developed prescribed by the National Association of Insurance Commissioners and which 
is in customary use in the United States for differing types of authorized insurers must be 
prepared in accordance with the association's quarterly statement instructions. 
3.  Verification.  The report shall must be verified by the oath of the insurer's 
president or vice-president, and the secretary or actuary as applicable, or in the absence of 
the foregoing, by 2 other principal officers; or if a reciprocal insurer, by the oath of the 
attorney-in-fact or its like officers if a corporation. 
4.  Supplemental reporting.  Upon the superintendent's request, the insurer shall file 
periodic reports of financial condition on a monthly basis, or at other intervals prescribed 
by the superintendent, in such form and containing such information as the 
superintendent prescribes. 
Sec. A-5.  24-A MRSA §423-G is enacted to read: 
§423-G.  Corporate governance annual disclosure 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Corporate governance annual disclosure" or "CGAD" means a confidential 
report filed by an insurer or insurance group pursuant to this section. 
B.  "Domestic insurance carrier" means an insurance company, health maintenance 
organization, fraternal benefit society, nonprofit hospital or medical service 
organization or nonprofit health plan domiciled in this State. 
C.  "Insurance group" means the insurance carriers and affiliates included within a 
domestic insurance carrier's insurance holding company system as defined in section 
222, subsection 2, paragraph C. 
D.  "Lead state," with respect to an insurance group, means the state designated as the 
lead state for the insurance group as determined by the procedures outlined in the 
most recent financial analysis handbook adopted by the NAIC, except that if the 
designated lead state does not have a corporate governance disclosure law 
substantially similar to this section, the superintendent shall designate this State or 
another state with a substantially similar law as the lead state for purposes of this 
section. 
E.  "NAIC" means the National Association of Insurance Commissioners or its 
successor organization of insurance regulators. 
2.  Disclosure requirement.  This subsection governs corporate governance annual 
disclosure filings. 
A.  A domestic insurance carrier shall file a corporate governance annual disclosure 
in accordance with this subsection no later than June 1st of each calendar year.  The 
carrier's insurance group may file the CGAD on behalf of the carrier. 
(1)  If the CGAD is completed at the insurance group level, and this State is not 
the group's lead state, the CGAD must be filed with the chief insurance regulator 
of the lead state in accordance with the laws of the lead state, and a copy must be 
filed with the superintendent if requested by the superintendent. 
(2)  If the CGAD is completed at the legal entity level or if this State is the 
group's lead state, the CGAD must be filed with the superintendent. 
B.  The CGAD must contain the information described in subsection 3, paragraph B 
and must include a signature of the domestic insurance carrier or insurance group's 
chief executive officer or corporate secretary attesting to the best of that individual's 
belief and knowledge that the domestic insurance carrier has implemented the 
corporate governance practices and that a copy of the CGAD has been provided to 
the domestic insurance carrier's board of directors or the appropriate committee 
thereof. 
C.  A CGAD may provide information regarding corporate governance at the level of 
the group's ultimate controlling parent or intermediate holding company, at the 
individual legal entity level or at any combination of these levels depending upon 
how the domestic insurance carrier or insurance group has structured its system of 
corporate governance. The domestic insurance carrier or insurance group is 
encouraged to make the CGAD at the level: 
(1)  At which the domestic insurance carrier's or insurance group's risk appetite is 
determined; 
(2)  At which the earnings, capital, liquidity, operations and reputation of the 
domestic insurance carrier are overseen collectively and at which the supervision 
of those factors is coordinated and exercised; or 
(3)  At which legal liability for failure of general corporate governance duties is 
placed. 
If the domestic insurance carrier or insurance group determines the level of reporting 
based on the 3 criteria under this paragraph, it shall indicate which of the criteria 
were used to determine the level or levels of reporting and explain any subsequent 
changes in the level of reporting. 
D.  If the CGAD is completed at the insurance group level, the lead state shall 
conduct the review of the CGAD and any additional requests for information must be 
made through the lead state. 
E.  Domestic insurance carriers providing information substantially similar to the 
information required by this section in other documents provided to the 
superintendent, including proxy statements filed in conjunction with Form B 
requirements or other state or federal filings provided to the bureau, may not be 
required to duplicate that information in the CGAD, but may only be required to 
cross-reference the document in which the information is included. 
3.  Contents of corporate governance annual disclosure.  This subsection governs 
the contents of corporate governance annual disclosure filings. 
A.  The domestic insurance carrier or insurance group shall ensure that the CGAD 
contains the material information necessary to permit the superintendent to gain an 
understanding of the domestic insurance carrier's or insurance group's corporate 
governance structure, policies and practices.  The superintendent may require 
additional information that is determined to be material and necessary to provide a 
clear understanding of the corporate governance policies, including the reporting or 
information system or controls implementing those policies. 
B.  The CGAD must be prepared consistent with rules adopted pursuant to subsection 
6.  Documentation and supporting information must be maintained and made 
available upon examination or upon request of the superintendent. 
C.  The domestic insurance carrier or insurance group has discretion over its 
responses to the CGAD inquiries, as long as those responses meet the requirements of 
this section. 
4.  Confidentiality.  This subsection governs confidentiality in corporate governance 
annual disclosure filings. 
A.  Documents, materials or other information in the possession or control of the 
bureau that are obtained by, created by or disclosed to the superintendent or any other 
person under this section, including the CGAD, are confidential and privileged, are 
not public records within the meaning of the Freedom of Access Act, are not subject 
to subpoena, are not subject to discovery or admissible in evidence in any private 
civil action and may not be made public without the prior written consent of the 
domestic insurance carrier.  Neither the superintendent nor any person who received 
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 information 
that is confidential under this subsection. 
B.  This subsection does not prohibit the superintendent from using information that 
is confidential under this subsection in the furtherance of any regulatory or legal 
action brought as a part of the superintendent's official duties. 
C.  The superintendent may share information that is confidential under this 
subsection only in accordance with the requirements of section 216, subsection 5. 
D.  The privilege provided by this subsection does not supersede any other applicable 
privilege or confidentiality protection, nor does disclosure of confidential information 
to the superintendent pursuant to this section constitute a waiver of any such privilege 
or protection. 
5.  NAIC and independent consultants.  This subsection governs independent 
consultants retained to review corporate governance annual disclosure and compliance 
with this section. 
A.  The superintendent may retain, at the domestic insurance carrier's expense, 
independent consultants as provided in section 208, including attorneys, actuaries, 
accountants and other experts as may be reasonably necessary to assist the 
superintendent in reviewing the CGAD and related information or the domestic 
insurance carrier's compliance with this section. 
B.  Any persons retained under paragraph A must be under the direction and control 
of the superintendent, are subject to the same confidentiality standards and 
requirements as the superintendent and must act in a purely advisory capacity. 
C.  The superintendent may not retain an independent consultant that has not verified 
to the superintendent, with notice to the domestic insurance carrier, that it is free of a 
conflict of interest and that it has internal procedures in place to monitor ongoing 
freedom from conflicts and to comply with the confidentiality standards and 
requirements of this section. 
D.  The superintendent may share confidential information provided or obtained 
under this section with the NAIC only in accordance with a written agreement that 
contains the provisions specified in section 216, subsection 5, paragraph C and the 
following additional provisions: 
(1)  Procedures and protocols for sharing by the NAIC only with other state 
regulators from states in which the insurance group has domiciled insurance 
carriers.  The agreement must provide that the recipient agrees to maintain the 
confidentiality and privileged status of the CGAD-related documents, materials 
or other information and must document the NAIC's legal authority to maintain 
confidentiality; 
(2)  A provision that prohibits the NAIC from storing the information shared 
pursuant to this section in a permanent database after the underlying analysis is 
completed; 
(3)  A provision requiring the NAIC to provide prompt notice to the 
superintendent, in addition to the notice to the domestic insurance carrier or 
insurance group required by section 216, regarding any subpoena, request for 
disclosure or request for production of the domestic insurance carrier's or 
insurance group's CGAD-related information; and 
(4)  A provision expressly requiring the written consent of the domestic insurance 
carrier before any information shared pursuant to this section may be made 
public. 
E.  The superintendent may share confidential information provided or obtained 
under this section with an independent consultant only in accordance with a written 
agreement that makes compliance with the confidentiality requirements of this 
section one of the consultant's duties as a state contractor and includes all protections 
that the NAIC is required to provide in an agreement entered into under paragraph D. 
6.  Rules.  The superintendent may adopt reasonable rules as necessary to implement 
this section.  Rules adopted pursuant to this subsection are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A. 
7.  Severability.  If any provision of this section other than subsection 4, or the 
application thereof to any person or circumstance, is determined to be invalid, that 
determination does not affect the provisions or applications of this section that can be 
given effect without the invalid provision or application, and to that end the provisions of 
this section with the exception of subsection 4 are severable. 
8.  Relationship to other laws.  This section may not be construed to prescribe or 
impose corporate governance standards and internal procedures beyond those required of 
business corporations under Title 13-C.  This section may not be construed to limit the 
superintendent's examination authority under sections 221 and 222 or the rights or 
obligations of 3rd parties in connection with examinations conducted under those 
sections. 
Sec. A-6.  24-A MRSA §1102, sub-§4, as amended by PL 1987, c. 399, §4, is 
further amended to read: 
4.    Any investment limitation or diversification requirement based upon the amount 
of the insurer's assets or particular funds shall must relate to such assets or funds as 
shown by the insurer's annual or quarterly
 statement as of the December 31st next 
statement date immediately
 preceding the date of acquisition of the investment by the 
insurer or as shown by a current applicable financial statement, prepared on the same 
basis as that annual or quarterly
 statement, resulting from merger with another insurer, 
bulk reinsurance or change in capitalization. 
Sec. A-7.  24-A MRSA §1152, sub-§4, as enacted by PL 1987, c. 399, §14, is 
amended to read: 
4.  Basis for limitation or diversification.  Any investment limitation or 
diversification requirement based upon the amount of the insurer's assets or particular 
funds shall must relate to such assets or funds as shown by the insurer's annual or 
quarterly statement as of the December 31st next statement date immediately preceding 
the date of acquisition of the investment by the insurer, or as shown by a current 
applicable financial statement, prepared on the same basis as that annual or quarterly
statement, resulting from merger with another insurer, bulk reinsurance or change in 
capitalization. 
Sec. A-8.  24-A MRSA §4134, sub-§1, as amended by PL 1997, c. 592, §70, is 
further amended to read: 
1.    Every society transacting business in this State shall annually, on or before the 
first day of March, unless for cause shown such time has been extended by the 
superintendent, file with the superintendent a true statement of its financial condition, 
transactions and affairs for the preceding calendar year.  The statement must be in general 
form and context as approved by the National Association of Insurance Commissioners 
for fraternal benefit societies and as supplemented by additional information required by 
the superintendent.  The society shall also file quarterly statements in accordance with the 
National Association of Insurance Commissioners quarterly statement instructions for 
fraternal benefit societies, if applicable, and shall report material investment and 
reinsurance transactions consistent with section 423-C.  If the society provides health care 
benefits, it shall file a health insurance supplement consistent with section 423-D.  The 
fee for filing the annual statement is the same as for an insurer as provided in section 601. 
Sec. A-9.  24-A MRSA §4134, sub-§7, as amended by PL 1973, c. 585, §12, is 
further amended to read: 
7.    A society neglecting to file the annual or quarterly statement in the form and 
within the time provided by this section shall forfeit $100 for each day during which such 
neglect continues, and, upon notice by the superintendent to that effect, its authority to do 
business in this State shall cease
 ceases while such default continues. 
Sec. A-10.  24-A MRSA §4204-A, sub-§2, as amended by PL 2001, c. 88, §§3 to 
5, is further amended to read: 
2.  Surplus maintained.  Except as provided in this section, every health 
maintenance organization must maintain a minimum surplus equal to the greater of: 
A.  One million dollars; 
B.  Two percent of the first $150,000,000 of annual premium revenues as reported in 
the most recent
 annual financial statement covering filed with the superintendent by 
the health maintenance organization's immediately preceding fiscal year as filed with 
the superintendent on the first $150,000,000 of premium and organization, plus 1% of 
annual premium on the premium
 in excess of $150,000,000; 
C.  An amount equal to the sum of 3 months months' uncovered health care 
expenditures as reported on
 in the most recent annual financial statement covering 
filed with the superintendent by
 the health maintenance organization's immediately 
preceding fiscal year as filed with the superintendent organization; 
D.  An amount equal to 8% of the health maintenance organization's annual health 
care expenditures, except those paid on a capitated basis,
 as reported on in the most 
recent annual financial statement covering filed with the superintendent by the health 
maintenance organization's immediately preceding fiscal year as filed with the 
superintendent organization; or 
E.  An amount equal to the company action level risk-based capital as defined in 
chapter 79. 
Sec. A-11.  24-A MRSA §4208, as amended by PL 1993, c. 313, §§33 to 35, is 
further amended to read: 
§4208.  Annual and interim reports 
1.    Every health maintenance organization shall file annually, on or before March 
1st or within any reasonable extension of time that the superintendent for good cause 
shown may have granted on or before March 1st, with the superintendent a full and true 
statement of its financial condition, transactions and affairs as of December 31st of the 
preceding year annual and quarterly financial statements substantially similar to those 
required of health insurers under sections 423, 423-A and 423-D, verified by at least 3 
principal officers,
 and shall provide a copy of that each statement to the Commissioner of 
Health and
 Human Services.  The superintendent may by rule or order require the filing 
of quarterly or
 more frequent reports, which may be required to include liability for 
uncovered expenditures as well as an audit opinion. 
1-A.  The annual and quarterly statements must be prepared in accordance with the 
National Association of Insurance Commissioners annual and quarterly statement 
instructions and must follow practices and procedures prescribed by the National 
Association of Insurance Commissioners accounting practices and procedures manual for 
health maintenance organizations.  If the health maintenance organization is operated as a 
division or line of business by an insurer or by a nonprofit hospital or medical service 
corporation, the superintendent shall designate the applicable portions of the financial 
statement form that must be filed, so as to eliminate information that is inapplicable to 
health maintenance organizations that are not separately incorporated and to minimize 
duplication between the statement filed under this section and the overall financial 
statement of the insurer or nonprofit hospital or medical service corporation. 
1-B.  Every health maintenance organization shall file an annual audit opinion 
substantially similar to those required of insurers under section 221-A. 
3.    The annual statement must be prepared in accordance with the National 
Association of Insurance Commissioners annual statement instructions and must follow 
practices and procedures prescribed by the National Association of Insurance 
Commissioners accounting practices and procedures manual for health maintenance 
organizations.  The annual statement and quarterly statements must include, if required by 
the Commissioner of Health and Human Services or by the superintendent: 
A.  A summary of information compiled pursuant to section 4204 in the form 
required by the Commissioner of Health and Human Services; and 
B.  Other information related to the performance of the health maintenance 
organization that is necessary to enable the superintendent to carry out the 
superintendent's duties under this chapter. 
4.    The superintendent may refuse to continue or may suspend or revoke the 
certificate of authority of a health maintenance organization failing to file an annual or 
quarterly statement when due. 
Sec. A-12.  24-A MRSA §4222-B, sub-§5, as amended by PL 2001, c. 88, §6, is 
further amended to read: 
5.    The requirements of section 222, subsections 2 to 9, subsections 11-A and 11-B 
and subsections 13 to 18 sections 221 to 228, to the extent not inconsistent with this 
chapter and the reasonable implications of this chapter, apply to domestic health 
maintenance organizations. 
Sec. A-13.  24-A MRSA §4222-B, sub-§§23 and 24 are enacted to read: 
23.  Section 423-C, relating to reporting of material investment and reinsurance 
transactions, applies to health maintenance organizations. 
24.  Section 423-G, relating to corporate governance annual disclosure filings, applies 
to health maintenance organizations. 
Sec. A-14.  Corporate governance annual disclosure filing due date.  A 
domestic insurance carrier's initial corporate governance annual disclosure filing pursuant 
to the Maine Revised Statutes, Title 24-A, section 423-G, is due on June 1, 2018. 
PART B 
Sec. B-1.  24-A MRSA §221, sub-§1, as amended by PL 1993, c. 313, §2, is 
further amended to read: 
1.    For the purpose of determining its financial condition, fulfillment of its 
contractual obligations and compliance with the law, the superintendent shall examine the 
affairs, transactions, accounts, records and assets of each authorized insurer, and of any 
person as to any matter relevant to the financial affairs of the insurer or to the 
examination, as often as the superintendent determines advisable.  In determining the 
nature, scope and timing of an examination, the superintendent shall consider criteria, 
including, but not limited to, the results of financial statement analyses and ratios, 
changes in management or ownership, actuarial opinions, reports of independent certified 
public accountants and other criteria adopted by the National Association of Insurance 
Commissioners and published in its Examiners' Financial Condition Examiners 
Handbook or Market Regulation Handbook, as applicable, or their successor publications
.  
Except as otherwise expressly provided, domestic insurers must be examined at least 
once every 3 years, unless the superintendent defers making an examination for a longer 
period; but in no event may an authorized insurer be examined less frequently than once 
every 5 years.  Examination of an alien insurer is limited to its insurance transactions, 
assets, trust deposits and affairs in the United States, except as otherwise required by the 
superintendent. 
Sec. B-2.  24-A MRSA §222, sub-§2, ¶B-3 is enacted to read: 
B-3.  "Groupwide supervisor" means the regulatory official who is determined or 
acknowledged by the superintendent under subsection 7-C to have the authority to 
engage in conducting and coordinating groupwide supervision activities over an 
internationally active insurance group or other insurance group that has requested 
groupwide supervision. 
Sec. B-3.  24-A MRSA §222, sub-§2, ¶D-2, as enacted by PL 1993, c. 313, §8, 
is amended to read: 
D-2.  "Net gains gain from operations" means: 
(1)  For life insurers, the net income or loss after dividends to policyholders and 
federal income taxes but before the inclusion of net realized capital gains or 
losses; and 
(2)  For nonlife insurers, the net income or loss after dividends to policyholders 
and federal income taxes and net realized capital gains or losses. 
Sec. B-4.  24-A MRSA §222, sub-§2, ¶D-6 is enacted to read: 
D-6.  "Internationally active insurance group" means an insurance holding company 
system that meets the following criteria: 
(1)  The group has premiums written in at least 3 countries; 
(2)  The percentage of gross premiums written outside the United States is at least 
10% of the insurance holding company system's total gross written premiums; 
and 
(3)  Based on a 3-year rolling average, the total assets of the insurance holding 
company system are at least $50,000,000,000 or the total gross written premiums 
of the insurance holding company system are at least $10,000,000,000. 
Sec. B-5.  24-A MRSA §222, sub-§4-C, ¶C, as enacted by PL 2013, c. 238, Pt. 
A, §11 and affected by §34, is amended to read: 
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. 
Sec. B-6.  24-A MRSA §222, sub-§7-C is enacted to read: 
7-C.  Groupwide supervision.  This subsection governs groupwide supervision. 
A.  The superintendent is authorized to act as the groupwide supervisor in accordance 
with the provisions of this subsection for any internationally active insurance group, 
or any other insurance holding company system that has requested the identification 
of a groupwide supervisor pursuant to this subsection, or to acknowledge another 
regulatory official as the groupwide supervisor if the insurance group: 
(1)  Does not have substantial insurance operations in the United States; 
(2)  Has substantial insurance operations in the United States, but not in this 
State; or 
(3)  Has substantial insurance operations in the United States and this State, but 
the superintendent has determined pursuant to the factors set forth in paragraphs 
B and G that the other regulatory official is the appropriate groupwide supervisor. 
B.  In cooperation with other state, federal and international regulatory agencies, and 
in consultation with the insurance group, the superintendent shall identify a single 
groupwide supervisor for each internationally active insurance group that includes an 
insurer registered under subsection 8 and has the discretion to identify a single 
groupwide supervisor for any other insurance holding company system that has 
requested that the superintendent identify a groupwide supervisor.  The 
superintendent may determine that the superintendent is the appropriate groupwide 
supervisor for an insurance group that conducts substantial insurance operations 
concentrated in this State or may acknowledge that a regulatory official from another 
jurisdiction is the appropriate groupwide supervisor for the insurance group.  The 
superintendent shall consider the following factors when making a determination or 
acknowledgment under this paragraph and shall reconsider that determination or 
acknowledgment if the superintendent finds that there has been a material change in 
the following factors: 
(1)  The place of domicile of the insurers within the insurance group that hold the 
largest share of the group's written premiums, assets or liabilities; 
(2)  The place of domicile of the top-tiered insurer or insurers in the insurance 
holding company system of the insurance group; 
(3)  The location of the executive offices or largest operational offices of the 
insurance group; 
(4)  The recommendation made by a regulatory official who is a candidate for 
designation under the criteria in this paragraph but has notified the superintendent 
that a different regulatory official would be a more appropriate groupwide 
supervisor; 
(5)  Whether another regulatory official is acting or is seeking to act as the 
groupwide supervisor under a regulatory system that the superintendent 
determines to be: 
(a)  Substantially similar to the system of regulation provided under the laws 
of this State; or 
(b)  Otherwise sufficient in terms of providing for groupwide supervision, 
enterprise risk analysis and cooperation with other regulatory officials; and 
(6)  Whether another regulatory official acting or seeking to act as the groupwide 
supervisor provides the superintendent with reasonably reciprocal recognition 
and cooperation. 
C.  If another regulatory official is acting as the groupwide supervisor of an insurance 
group subject to groupwide supervision under this subsection, the superintendent 
shall acknowledge that regulatory official as the groupwide supervisor and may not 
consider designating the superintendent as the groupwide supervisor under paragraph 
B unless there is a material change in the insurance group that results in: 
(1)  The insurance group's insurers domiciled in this State holding the largest 
share of the group's premiums, assets or liabilities; or 
(2)  This State being the place of domicile of the top-tiered insurer or insurers in 
the insurance holding company system of the insurance group. 
D.  If more than one regulatory official is acting as the groupwide supervisor of an 
insurance group, the superintendent is authorized to cooperate with any of them under 
paragraph G. 
E.  Pursuant to subsection 1-A, the superintendent is authorized to collect from any 
insurer registered pursuant to subsection 8 all information necessary to determine 
whether the superintendent should act as the groupwide supervisor of an insurance 
group or whether the superintendent should acknowledge another regulatory official 
to act as the groupwide supervisor.  Before issuing a determination that an insurance 
group is subject to groupwide supervision by the superintendent, the superintendent 
shall notify the insurer registered pursuant to subsection 8 and the ultimate 
controlling person within the insurance group.  The insurance group has no less than 
days to provide the superintendent with additional information pertinent to the 
pending determination.  The superintendent shall publish on the bureau's publicly 
accessible website the identity of all insurance groups that the superintendent has 
determined are subject to groupwide supervision by the superintendent. 
F.  If the superintendent is the groupwide supervisor for an insurance group, the 
superintendent is authorized to engage in any of the following groupwide supervision 
activities: 
(1)  Assess the enterprise risks within the insurance group to ensure that: 
(a)  The material financial condition and liquidity risks to the members of the 
insurance group that are engaged in the business of insurance are identified 
by management; and 
(b)  Reasonable and effective mitigation measures are in place; 
(2)  Request, from any member of the insurance group, information necessary 
and appropriate to assess enterprise risk, including, but not limited to, 
information about the members of the insurance group regarding: 
(a)  Governance, risk assessment and management; 
(b)  Capital adequacy; and 
(c)  Material intercompany transactions; 
(3)  Coordinate and, through the authority of the regulatory officials of the 
jurisdictions where members of the insurance group are domiciled, compel 
development and implementation of reasonable measures designed to ensure that 
the insurance group is able to promptly recognize and mitigate enterprise risks to 
members of the insurance group that are engaged in the business of insurance; 
(4)  Communicate with other state, federal and international agencies that 
regulate members of the insurance group and share relevant information subject 
to the confidentiality provisions of subsection 13-A, through supervisory colleges 
as set forth in subsection 7-B or otherwise; 
(5)  Enter into agreements with or obtain documentation from any insurer 
registered under subsection 8, any member of the insurance group and any other 
state, federal and international regulatory agencies for members of the insurance 
group, providing the basis for or otherwise clarifying the superintendent's role as 
groupwide supervisor, including provisions for resolving disputes with other 
regulatory officials.  Such agreements or documentation may not serve as 
evidence in any proceeding that any insurer or person within an insurance 
holding company system not domiciled or incorporated in this State is doing 
business in this State or is otherwise subject to jurisdiction in this State; and 
(6)  Other groupwide supervision activities, consistent with the authorities and 
purposes set out in subparagraphs (1) to (5), as considered necessary by the 
superintendent. 
G.  If the superintendent acknowledges that another regulatory official from a 
jurisdiction that is not accredited by the National Association of Insurance 
Commissioners is the groupwide supervisor, the superintendent is authorized to 
cooperate reasonably, through supervisory colleges or otherwise, with groupwide 
supervision undertaken by the groupwide supervisor, as long as: 
(1)  The superintendent's cooperation is in compliance with the laws of this State; 
and 
(2)  The regulatory official acknowledged as the groupwide supervisor also 
recognizes and cooperates with the superintendent's activities as a groupwide 
supervisor for other insurance groups as applicable.  When such recognition and 
cooperation is not reasonably reciprocal, the superintendent is authorized to 
refuse recognition and cooperation. 
H.  The superintendent is authorized to enter into agreements with or obtain 
documentation from any insurer registered under subsection 8, any affiliate of the 
insurer and other state, federal and international regulatory agencies for members of 
the insurance group in order to provide the basis for or otherwise clarify a regulatory 
official's role as groupwide supervisor. 
I.  The superintendent may adopt rules necessary for the administration of this 
subsection.  Rules adopted pursuant to this paragraph are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A. 
J.  A registered insurer subject to this subsection is liable for and shall pay the 
reasonable expenses of the superintendent's participation in the administration of this 
subsection, including the engagement of attorneys, actuaries and any other 
professionals and all reasonable travel expenses. 
Sec. B-7.  24-A MRSA §222, sub-§9, ¶A-1, as enacted by PL 2013, c. 238, Pt. 
A, §21 and affected by §34, is amended to read: 
A-1.  Agreements for cost-sharing management services and management cost 
sharing must include any provisions required by the superintendent by rule. 
Sec. B-8.  24-A MRSA §222, sub-§9, ¶E, as amended by PL 2013, c. 238, Pt. A, 
§21 and affected by §34, is further amended to read: 
E.  A domestic insurer 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 preceding year 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 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 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 and 25% of surplus to 
policyholders; 
(3)  All reinsurance pooling agreements, 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)  All management agreements, cost-sharing arrangements, tax allocation 
agreements, service contracts 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; 
(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 transactions when aggregated over any 12-month 
period exceed the reporting thresholds of this paragraph. 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 for the 
purpose of avoiding regulatory review by circumventing statutory reporting 
requirements, that determination is a sufficient basis for disapproving the 
transactions 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 a transaction that is subject to this paragraph if 
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. 
Sec. B-9.  24-A MRSA §222, sub-§11-C, ¶C, as enacted by PL 2009, c. 511, Pt. 
A, §5, is amended to read: 
C.  An extraordinary dividend may not be paid until affirmatively approved by the 
superintendent or until at least 60 days after the superintendent has received a request 
to pay an extraordinary dividend. 
(1)  For purposes of this subsection, "extraordinary dividend" means any 
dividend or distribution, other than a pro rata distribution of a class of the 
insurer’s own securities, that: 
(a)  Exceeds When aggregated with all other dividends and distributions paid 
or proposed to be paid by the insurer less than a full year before the payment 
date, exceeds the greater of 10% of the insurer's surplus to policyholders as 
of December 31st of the preceding year or
 and the net gain from operations 
for the preceding calendar year, whichever is greater
; 
(b)  Is declared within 5 years after any acquisition of control of a domestic 
insurer or of any person controlling that insurer, unless it has been approved 
by a number of continuing directors equal to a majority of the directors in 
office immediately preceding that acquisition of control; or 
(c)  Is not paid entirely from unassigned funds.  For purposes of this division, 
50% of the net of unrealized capital gains and unrealized capital losses, 
reduced, but not to less than zero, by that portion of the asset valuation 
reserve attributable to equity investments, must be excluded from the 
calculation of unassigned funds. 
(2)  An insurer may declare an extraordinary dividend on a conditional basis, 
subject to the superintendent’s approval.  A declaration pursuant to this 
subparagraph does not confer any rights upon stockholders until the 
superintendent has approved the payment or the 60-day review period has 
elapsed. 
Sec. B-10.  24-A MRSA §222, sub-§13-A, ¶A, as enacted by PL 2013, c. 238, 
Pt. A, §26 and affected by §34, is amended to read: 
A.  For purposes of this subsection, "holding company information" means any of the 
following documents, materials and other information if the document, material or 
other information has not specifically and expressly been designated as a public 
record by other applicable law: 
(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 4-C, paragraph E; 
(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; 
(8-A)  Groupwide supervision information reported or provided to the 
superintendent under subsection 7-C; 
(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; 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. 
Sec. B-11.  24-A MRSA §223, sub-§1, as amended by PL 1991, c. 828, §7, is 
further amended to read: 
1.    Whenever the superintendent determines to examine the affairs of any person, 
the superintendent shall designate one or more examiners and instruct them as to the 
scope of the examination.  The superintendent may designate a bureau employee or may 
designate an examiner outside the bureau if the designee is a competent public accountant 
or an actuary who is a member of the American Academy of Actuaries and is in active 
practice who has been retained pursuant to section 208.  Examiners may be attorneys, 
appraisers, independent actuaries, independent certified public accountants or other 
professionals and specialists with skills relevant to the examination.  The examiner shall, 
upon demand, exhibit the examiner's official credentials to the person under examination. 
A.  An examiner may not be designated by the superintendent if the examiner directly 
or indirectly has a conflict of interest or is affiliated with the management of or owns 
a pecuniary interest in any person subject to examination under sections 221 and 222.  
This section may not be construed to preclude automatically an examiner from being: 
(1)  A policyholder or claimant under an insurance policy; 
(2)  A grantor of a mortgage or similar instrument on the examiner's residence to 
a regulated entity if done under customary terms and in the ordinary course of 
business; 
(3)  An investment owner in shares of regulated diversified investment 
companies; or 
(4)  A settlor or beneficiary of a "blind trust" into which any otherwise 
impermissible holdings have been placed. 
Sec. B-12.  24-A MRSA §223, sub-§2, as amended by PL 1993, c. 313, §14, is 
further amended to read: 
2.    The superintendent shall conduct each examination in an expeditious, fair and 
impartial manner, consistent with current guidelines and procedures adopted from time to 
time by the National Association of Insurance Commissioners and published in its 
Examiners' Financial Condition Examiners Handbook or Market Regulation Handbook, 
as applicable, or their successor publications. 
PART C 
Sec. C-1.  24-A MRSA §731-B, sub-§1, ¶D, as amended by PL 2013, c. 238, Pt. 
B, §6, 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 may waive the requirements of subsections 2 and 5 to the extent 
that compliance with those requirements is not feasible for compulsory reinsurance 
subject to this paragraph.  The superintendent for good cause after notice and 
opportunity for hearing may disallow or reduce the credit otherwise permitted under 
this paragraph. 
Sec. C-2.  24-A MRSA §731-B, sub-§2-B is enacted to read: 
2-B.  Through rules adopted under subsection 7, the superintendent may establish 
additional requirements that reinsurance agreements that are subject to this subsection 
must satisfy to qualify for credit. 
A.  This subsection applies only to reinsurance of: 
(1)  Life insurance policies with guaranteed nonlevel gross premiums or 
guaranteed nonlevel benefits; 
(2)  Universal life insurance policies with provisions resulting in the ability of a 
policyholder to keep a policy in force over a secondary guarantee period; 
(3)  Variable annuities with guaranteed death or living benefits; 
(4)  Long-term care insurance policies; or 
(5)  Other life and health insurance and annuity products for which the National 
Association of Insurance Commissioners adopts model regulatory requirements 
with respect to credit for reinsurance. 
B.  Requirements established under this subsection may address: 
(1)  The valuation of assets or reserve credits; 
(2)  The amount and forms of acceptable security, in accordance with rules that 
may supplement or modify the requirements of subsection 3; and 
(3)  The circumstances pursuant to which credit will be reduced or eliminated. 
C.  Requirements established under this subsection may take into consideration the 
results of applying the valuation manual adopted under section 959 to ceded policies 
whose statutory reserves are calculated according to a prior methodology. 
D.  Requirements established with respect to reinsurance described in paragraph A, 
subparagraphs (1) and (2) may apply to any treaty for which the risk ceded includes: 
(1)  Policies issued on or after January 1, 2015; or 
(2)  Risk on policies issued before January 1, 2015 and ceded in connection with 
the treaty, in whole or in part, on or after January 1, 2015. 
E.  This subsection does not apply to cessions to an assuming insurer that: 
(1)  Is certified in this State pursuant to subsection 1, paragraph B-2; or 
(2)  Maintains at least $250,000,000 in capital and surplus as determined in 
accordance with section 901-A, excluding the impact of any permitted or 
prescribed practices; and is: 
(a)  Licensed in at least 26 states; or 
(b)  Licensed in at least 10 states and licensed or accredited in a total of at 
least 35 states. 
PART D 
Sec. D-1.  24-A MRSA §4379, first ¶, as enacted by PL 1969, c. 132, §1, is 
amended to read: 
The priorities in distribution of assets from the insurer's estate shall be to pay 
unsecured claims, including the unsecured portion of undersecured claims, are in the 
order as shown in this section. The first $50 of the amount allowed on each claim in the 
classes under subsections 2 to
 3, 4, 4-B, 5 and 6 shall must be deducted from the claim 
and included in the class under subsection 8. Claims shall
 may not be cumulated by 
assignment to avoid application on the $50 deductible provision. Subject to the $50 
deductible provision, every claim in each class shall
 must be paid in full or adequate 
funds retained for the payment thereof before claims of the next succeeding class receive 
any payment. No subclasses shall
 may be established within any class:. 
Sec. D-2.  24-A MRSA §4379, sub-§2, as enacted by PL 1969, c. 132, §1, is 
repealed. 
Sec. D-3.  24-A MRSA §4379, sub-§§4-A and 4-B are enacted to read: 
4-A.  Federal claims.  Claims of the Federal Government not included in the classes 
under subsections 3 or 4, except to the extent that a similar claim would be subordinated 
in a proceeding conducted under the United States Bankruptcy Code. 
4-B.  Wages.  Debts due to employees of the insurer, other than officers, for services 
performed, not to exceed $1,000 to each employee and earned within one year 
immediately preceding the filing of the petition for liquidation.  This priority is in lieu of 
any other similar priority authorized by law as to wages or compensation of such 
employees. 
Sec. D-4.  24-A MRSA §4379, sub-§5, as enacted by PL 1969, c. 132, §1, is 
amended to read: 
5.  Residual classification. All other claims, including claims of the federal or any 
state or local government, not falling within other classes under this section. Claims, 
including those of any governmental body, for a penalty or forfeiture shall be allowed
 are 
included in this class only to the extent of the pecuniary loss sustained from the act, 
transaction or proceeding out of which the penalty or forfeiture arose, with reasonable 
and actual costs occasioned thereby. The remainder of such claims shall
 must be 
postponed to the class of claims under subsection 8. 
Sec. D-5.  24-A MRSA §4379, sub-§8, ¶A, as enacted by PL 1969, c. 132, §1, is 
amended to read: 
A.  The first $50 of each claim in the classes under subsections 2 through 3, 4, 4-B, 5 
and 6 subordinated under this section; 
Sec. D-6.  24-A MRSA §4386, sub-§2, ¶A, as enacted by PL 1981, c. 347, is 
amended to read: 
A.  Reserving amounts for the payment of the expenses of administration and the 
claims falling within the priorities established in section 4379, subsections 1 and 2 
4-B
; 
PART E 
Sec. E-1.  24-A MRSA §6401, as enacted by PL 1991, c. 828, §33, is amended to 
read: 
§6401.  Short title 
This chapter may be known and cited as the "Maine Business Transacted with 
Broker-Controlled Producer-controlled Insurer Act." 
Sec. E-2.  24-A MRSA §6402, sub-§2, as enacted by PL 1991, c. 828, §33, is 
repealed. 
Sec. E-3.  24-A MRSA §6402, sub-§4, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
4.  Controlling producer.  "Controlling broker producer" means a broker producer 
who directly or indirectly controls an insurer. 
Sec. E-4.  24-A MRSA §6402, sub-§5, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
5.  Controlled insurer.  "Controlled insurer" means a licensed property or casualty 
insurer that is controlled directly or indirectly by a broker
 producer. 
Sec. E-5.  24-A MRSA §6402, sub-§6, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
6.  Licensed property or casualty insurer.  "Licensed property or casualty insurer" 
or "insurer"
 means any person licensed to transact a property or casualty insurance 
business, or both, in this State.  The follo
wing, inter alia, are not licensed insurers for the 
purposes of this chapter with the exception of: 
A.  All risk retention groups as defined in the federal Superfund Amendments 
Reauthorization Act of 1986, Public Law No. 99-499, 100 Stat. 1613 (1986) and the 
Risk Retention Act, 15 United States Code, Section 3901 et seq. and the Maine 
Liability Risk Retention Act; 
B.  All A residual market pools and pool or joint underwriting authorities authority or 
associations
 association; and or 
C.  All captive insurers, which for the purposes of this chapter are insurance 
companies owned by another organization whose exclusive purpose is to insure risks 
of the parent organization and affiliated companies or, in the case of groups and 
associations, insurance organizations owned by the insureds whose exclusive purpose 
is to insure risks to member organizations or group members and their affiliates. A 
special purpose reinsurance vehicle holding a limited certificate of authority under 
section 782 or a captive insurance company, other than a risk retention group, 
licensed under section 6702. 
Sec. E-6.  24-A MRSA §6402, sub-§7, as amended by PL 1997, c. 457, §53 and 
affected by §55, is further amended to read: 
7.  Producer.  "Producer" means an insurance producer licensed or required to be 
licensed pursuant to chapter 16 or a person holding or required to hold a comparable 
license in another state where a licensed property or casualty insurer does business. 
Sec. E-7.  24-A MRSA §6402, sub-§8, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
8.  Subproducer.  "Subproducer" means a producer who, for shared commission or 
other recompense, places business with a controlled insurer through a controlling broker 
producer
. 
Sec. E-8.  24-A MRSA §6403, as enacted by PL 1991, c. 828, §33, is amended to 
read: 
§6403.  Applicability 
This Act chapter applies to licensed property or casualty insurers as defined in section 
6402, either domiciled in this State or domiciled in a state that is not an accredited state 
with a substantially similar law in effect.  Section 222, to the extent not modified by this 
chapter, continues to apply to all parties within holding company systems subject to this 
chapter. 
Sec. E-9.  24-A MRSA §6404, as enacted by PL 1991, c. 828, §33, is amended to 
read: 
§6404.  Minimum standards 
1.  Applicability.  This section applies as follows. 
A.  This section applies if, in any calendar year, the aggregated amount of gross 
written premium on business placed with a controlled insurer by a controlling broker 
producer
 is equal to or greater than 5% of the admitted assets of the controlled insurer 
as of September 30th of the preceding year, as reported in the controlled insurer's 
quarterly statement. 
B.  Notwithstanding paragraph A, this section does not apply if: 
(1)  The controlling broker producer: 
(a)  Places insurance only with the controlled insurer, only with the 
controlled insurer and a member or members of the controlled insurer's 
holding company system or only with the controlled insurer's parent, affiliate 
or subsidiary and receives no compensation based upon the amount of 
premiums written in connection with such insurance; and 
(b)  Accepts insurance placements only from  nonaffiliated subproducers and 
not directly from insureds; and 
(2)  The controlled insurer, except for insurance business written through a 
residual market facility such as the workers' compensation residual market 
mechanism or the State's automobile assigned risk plan, accepts insurance 
business only from a controlling broker producer, a producer controlled by the 
controlled insurer or a producer that is a subsidiary of the controlled insurer. 
2.  Required contract provisions.  A controlled insurer may not accept business 
from a controlling broker producer and a controlling broker producer may not place 
business with a controlled insurer unless there is a written contract between the 
controlling broker
 producer and the controlled insurer specifying the responsibilities of 
each party.  The contract must be approved by the board of directors of the insurer and 
must contain the following minimum provisions. 
A.  The controlled insurer may terminate the contract for cause upon written notice to 
the controlling broker producer.  The controlled insurer shall suspend the authority of 
the controlling broker producer to write business during the pendency of any dispute 
regarding the cause for the termination. 
B.  The controlling broker producer shall render timely accounts to the controlled 
insurer detailing all material transactions including information necessary to support 
all commissions, charges and other fees received by or owed to the controlling broker
producer
. 
C.  The controlling broker producer shall remit all funds due under the terms of the 
contract to the controlled insurer on at least a monthly basis.  The due date must be 
fixed so that premiums or installments of premiums collected are remitted no later 
than 90 days after the effective date of any policy placed with the controlled insurer 
under the contract. 
D.  All funds collected for the controlled insurer's account must be held in trust by the 
controlling broker producer in a fiduciary capacity, in one or more appropriately 
identified bank accounts in banks that are members of the Federal Reserve System, in 
accordance with applicable insurance laws.  Funds of a controlling broker
 producer 
not licensed in this State must be maintained in compliance with the requirements of 
the controlling broker's
 producer's domiciliary jurisdiction. 
E.  The controlling broker producer shall maintain separately identifiable records of 
business written for the controlled insurer.  The controlled insurer must have access 
and may copy all accounts and records related to its business in a form usable by the 
insurer.  The records must be retained according to section 3408. 
F.  The contract may not be assigned in whole or in part by the controlling broker 
producer
. 
G.  The controlled insurer shall provide the controlling broker producer with its 
underwriting standards, rules, procedures, rates and conditions, including manuals 
setting forth the rates to be charged and the conditions for the acceptance or rejection 
of risks.  The controlling producer shall comply with those standards, rules, 
procedures, rates and conditions, which
 must be the same as those applicable to 
comparable business placed with the controlled insurer by a producer other than the 
controlling broker
 producer. 
H.  The rates of the controlling broker's producer's commissions, charges and other 
fees may not be greater than those applicable to comparable business placed with the 
controlled insurer by producers other than controlling brokers
 producers.  For 
purposes of this paragraph and paragraph G, examples of "comparable business" 
include the same lines of insurance, the same kinds of insurance, the same kinds of 
risks, similar policy limits and similar quality of business. 
I.  If the contract provides that the controlling broker producer, on insurance business 
placed with the insurer, must be compensated contingent upon the insurer's profits on 
that business, then that compensation may not be determined and paid until at least 5 
years after the premiums on liability insurance are earned and at least one year after 
the premiums are earned on any other insurance.  The commissions may not be paid 
until the adequacy of the controlled insurer's reserves on remaining claims are 
independently verified pursuant to subsection 3. 
J.  The controlled insurer shall place a limit on the controlling broker's producer's 
writings in relation to the controlled insurer's surplus and total writings.  The insurer 
may establish a different limit for each line or subline of business.  The controlled 
insurer shall notify the controlling broker
 producer when the applicable limit is 
approached and may not accept business from the controlling broker
 producer if the 
limit is reached.  The controlling broker
 producer may not place business with the 
controlled insurer if notified by the controlled insurer that the limit has been reached. 
K.  The controlling broker producer may negotiate but may not bind reinsurance on 
behalf of the controlled insurer on business the controlling broker
 producer places 
with the controlled insurer, except that the controlling broker
 producer may bind 
facultative reinsurance contracts pursuant to obligatory facultative agreements.  All 
such contracts with the controlled insurer must contain underwriting guidelines 
including, for reinsurance both assumed and ceded, a list of reinsurers with which the 
automatic agreements are in effect, the coverages and amounts or percentages that 
may be reinsured and schedules of the commissions allowed. 
3.  Audit committee.  Every controlled insurer must have an audit committee of the 
board of directors composed of independent directors.  The audit committee shall 
annually meet with management, the insurer's independent certified public accountants 
and an independent casualty actuary acceptable to the superintendent to review the 
adequacy of the insurer's loss reserves. 
4.  Reporting requirements.  A controlled insurer shall make the following reports. 
A.  In addition to any other required loss reserve certification, by April 1st of each 
year, the controlled insurer shall file with the superintendent an opinion of an 
independent casualty actuary acceptable to the superintendent reporting loss ratios for 
each line of business written and attesting to the adequacy of loss reserves established 
for losses incurred and outstanding at the preceding year end, including incurred but 
not reported losses, on business placed by the controlled broker producer. 
B.  The controlled insurer shall report annually to the superintendent the amount of 
commissions paid to the controlling broker producer, the percentage that amount 
represents of the net premiums written and comparable amounts and percentage paid 
to noncontrolling producers for placement of the same kinds of insurance. 
Sec. E-10.  24-A MRSA §6405, as corrected by RR 1991, c. 2, §94, is amended to 
read: 
§6405.  Disclosure 
Prior to Before the effective date of the any policy placed with a controlled insurer by 
a controlling producer or a controlling producer's subproducer, the controlling insurer 
producer
 shall cause the controlling broker to deliver written notice to the prospective 
insured disclosing the relationship between the broker
 producer and the controlled 
insurer, except that if the business is placed through a subproducer who is not a 
controlling broker
 producer, the controlling insurer producer shall cause the controlling 
broker to retain and enforce a signed commitment from the subproducer that the 
subproducer is aware of the relationship between the insurer and the controlling broker 
producer
 and that the subproducer has notified or will notify the insured. 
Sec. E-11.  24-A MRSA §6406, sub-§1, as enacted by PL 1991, c. 828, §33, is 
repealed and the following enacted in its place: 
1.  Civil action by superintendent.  If the superintendent has good cause to believe 
that a controlled insurer or any policyholder of the controlled insurer has suffered any 
loss or damage resulting from a violation of this chapter, the superintendent may maintain 
a civil action or intervene in an action brought by or on behalf of the insurer or 
policyholder for recovery of compensatory damages or other appropriate relief for the 
benefit of the insurer or policyholder. 
Sec. E-12.  24-A MRSA §6406, sub-§2, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
2.  Civil action by receiver.  If an order for liquidation or rehabilitation of the a 
controlled insurer is entered pursuant to chapter 57 and a receiver is appointed, and the 
superintendent finds pursuant to subsection 1
 receiver has good cause to believe that the 
controlling broker
 producer or any other person has not complied with this chapter or any 
rule or order made under this chapter and that the insurer suffered any loss or damage 
because of that noncompliance, the receiver appointed under that order
 may maintain a 
civil action for recovery of damages or other appropriate sanctions for the benefit of the 
insurer. 
Sec. E-13.  24-A MRSA §6406, sub-§3, as enacted by PL 1991, c. 828, §33, is 
amended to read: 
3.  Other action.  Nothing contained in this section affects the right of the 
superintendent to impose any other penalties provided for in this Title or other remedies 
authorized under section 12-A or other applicable law. 
Sec. E-14.  24-A MRSA §6407, as enacted by PL 1991, c. 828, §33, is repealed. 
Sec. E-15.  Maine Revised Statutes headnote amended; revision clause.  In 
the Maine Revised Statutes, Title 24-A, chapter 77, in the chapter headnote, the words 
"business transacted with broker-controlled property or casualty insurer" are amended to 
read "business transacted with producer-controlled property or casualty insurer" and the 
Revisor of Statutes shall implement this revision when updating, publishing or 
republishing the statutes. 
PART F 
Sec. F-1.  24-A MRSA §6456, sub-§2, as amended by PL 1997, c. 81, §8, is 
repealed and the following enacted in its place: 
2.  Superintendent duties; mandatory control level event.  When a mandatory 
control level event occurs, the superintendent shall take those actions that are necessary to 
cause the insurer to be placed under regulatory control under chapter 57 or take 
alternative action as authorized under paragraphs A and B.  If the superintendent takes 
those actions, the mandatory control level event is deemed sufficient grounds for the 
superintendent to take action under chapter 57, and the superintendent has the rights, 
powers and duties with respect to the insurer as are set forth in chapter 57.  If the 
superintendent takes actions pursuant to an adjusted risk-based capital report, the insurer 
is entitled to those protections that are afforded to insurers under the provisions of chapter 
57, subchapter 2 pertaining to summary proceedings. 
A.  The superintendent may forgo action for up to 90 days after the mandatory 
control level event if the superintendent finds there is a reasonable expectation that 
the mandatory control level event may be eliminated within the 90-day period. 
B.  In the case of a property and casualty insurer that is not authorized to write new 
business, the superintendent may allow the insurer to continue to run off its existing 
business under the superintendent's supervision if the superintendent determines that 
there will be sufficient funds to meet the insurer's obligations as they become due.  
This paragraph does not apply to health insurers. 
Sec. F-2.  24-A MRSA §6458, sub-§1, as enacted by PL 1993, c. 634, Pt. A, §1, 
is amended to read: 
1.  Confidentiality.  The following constitute information that might be damaging to 
the insurer if made available to its competitors and must be kept confidential by the 
superintendent: 
A.  Risk-based capital reports, with respect to any domestic insurer or foreign insurer, 
that are filed with the superintendent, to the extent that the information in the reports 
is not required to be set forth in a publicly available annual statement schedule; and 
B.  Risk-based capital plans, with respect to any domestic insurer or foreign insurer, 
that are filed with the superintendent, including the results or report of any 
examination or analysis of an insurer performed pursuant to this chapter and any 
corrective order issued by the superintendent pursuant to the examination or analysis. 
The information listed in paragraph A or B may be shared on a confidential basis in 
accordance with section 216, subsection 5 but may not be made public or be subject to 
subpoena, other than by the superintendent and then only for the purpose of enforcement 
actions taken by the superintendent pursuant to this chapter or any other provision of the 
insurance laws of this State. 
Sec. F-3.  24-A MRSA §6458, sub-§3 is enacted to read: 
3.  Prohibition on use in ratemaking.  Risk-based capital instructions, risk-based 
capital reports, adjusted risk-based capital reports, risk-based capital plans and revised 
risk-based capital plans may not be used by the superintendent for purposes of rate 
review, considered or used as evidence in any rate proceeding or used by the 
superintendent to calculate or derive any elements of an appropriate premium level or 
appropriate rate of return.  This subsection does not prohibit the consideration of 
premium rates and projected or realized rates of return for purposes of company action or 
regulatory action taken under this chapter. 
Sec. F-4.  24-A MRSA §6460, sub-§2, as enacted by PL 1993, c. 634, Pt. A, §1, 
is amended to read: 
2.  Risk-based capital plan.  When a company action level event or, regulatory 
action level event or authorized control level event
 with respect to a foreign insurer 
occurs, as determined under laws governing risk-based capital applicable in the state of 
domicile of the insurer, or, if no such risk-based capital provision is in force in that state, 
under the provisions of this chapter, if the insurance superintendent of the state of 
domicile of the foreign insurer fails to require the foreign insurer to file a risk-based 
capital plan in the manner specified under the laws governing risk-based capital in that 
state, or, if no such risk-based capital provision is in force in that state, under this chapter, 
the superintendent may require the foreign insurer to file a risk-based capital plan with 
the superintendent.  In this event, the failure of the foreign insurer to file a risk-based 
capital plan with the superintendent is grounds to order the insurer to desist from writing 
new insurance business in this State. 
PART G 
Sec. G-1.  24-A MRSA §6701, sub-§5, as amended by PL 2009, c. 335, §§3 and 
4, is further amended to read: 
5.  Controlled unaffiliated business.  "Controlled unaffiliated business" means a 
company business entity that has a contractual relationship, such as a subcontractor or 
franchisee relationship, with the parent of a pure captive insurance company or with one 
or more of its affiliates, satisfying the following criteria: 
A.  Is The business entity is not in the corporate system of a parent and affiliated 
companies the pure captive insurance company's parent; 
B.  Has an existing The contractual relationship with a parent or affiliated company 
provides that all or a material part of the business entity's operations are dedicated to 
business activities undertaken or managed by the pure captive insurance company's 
parent or by one or more of its affiliates; and 
D.  Has all its Substantially all of the captive insurance company's coverage of the 
business entity is for risks arising out of the activities described in paragraph B, and 
those risks are managed by a pure the captive insurance company in accordance with 
this chapter. 
Sec. G-2.  24-A MRSA §6701, sub-§12, as enacted by PL 1997, c. 435, §1, is 
amended to read: 
12.  Pure nonprofit captive insurance company.  "Pure nonprofit captive insurance 
company" means a pure captive insurance company formed without capital stock as a 
nonprofit corporation, whose voting of or membership interest is held by a parent 
organization formed under a nonprofit law or by a nonprofit parent, its or controlled 
unaffiliated business affiliated companies but does not include those insurers otherwise 
qualifying for a certificate of authority as an insurer. 
Sec. G-3.  24-A MRSA §6702, sub-§3, ¶C, as enacted by PL 1997, c. 435, §1, is 
amended to read: 
C.  The A plan of operation satisfactory to the superintendent, with supporting 
information demonstrating the overall soundness of its plan of operation; 
Sec. G-4.  24-A MRSA §6706, sub-§1, ¶C, as enacted by PL 2009, c. 335, §12, 
is amended to read: 
C.  Organized as a manager-managed limited liability company with a limited 
liability company agreement approved by the superintendent. 
Sec. G-5.  24-A MRSA §6706, sub-§2, ¶D, as enacted by PL 2009, c. 335, §12, 
is amended to read: 
D.  Organized as a manager-managed limited liability company with a limited 
liability company agreement approved by the superintendent. 
Sec. G-6.  24-A MRSA §6706, sub-§3, as amended by PL 2009, c. 335, §12, is 
further amended to read: 
3.  Incorporators.  A captive insurance company, other than a limited liability 
company, may not have fewer than 3 incorporators or 3 organizers of whom at least one 
must be a resident of this State.  If the captive insurance company is a limited liability 
company, at least one manager
 its certificate of formation must be executed by a resident 
of this State. 
Sec. G-7.  24-A MRSA §6706, sub-§6, as amended by PL 2013, c. 588, Pt. A, 
§30, is further amended to read: 
6.  Board of directors.  If a captive insurance company incorporated in this State is 
formed as a corporation, then at least one of the members of the board of directors of the 
company incorporated in this State must be a resident of this State.  If the company is 
formed as a reciprocal insurer, then at least one of the members of the subscribers' 
advisory committee must be a resident of this State. If the company is organized as a 
limited liability company, then at least one manager member of its governing body must 
be a resident of this State. 
Sec. G-8.  24-A MRSA §6707, as amended by PL 1997, c. 583, §4, is further 
amended to read: 
§6707.  Financial statements and other reports 
1.  Financial statement.  A captive insurance company shall submit an annual 
statement of financial condition written according to generally accepted accounting 
principles and audited by an independent certified public accountant to the superintendent 
on or before the last day of the 6th month following the end of the company's fiscal year. 
A.  The audited financial statement of an association captive insurance company or 
industrial insured captive insurance company must be prepared in conformity with 
statutory accounting principles. 
B.  The audited financial statement of a captive insurance company other than those 
set out in paragraph A must be prepared in conformity with either generally accepted 
accounting principles or statutory accounting principles, at the election of the 
company. 
2.  Annual and quarterly statements.  An association captive insurance company or 
industrial insured captive insurance company shall file an annual statement annual and 
quarterly statements in accordance with statutory accounting practices principles, each of 
which must be a true statement of its financial condition, transactions and affairs as of the 
immediately preceding December 31st, substantially similar to the statements required 
under sections 423 and 423-A for insurance companies certified under section 414, in 
general form and context as approved by the National Association of Insurance 
Commissioners, or other format prescribed by the superintendent, verified by oaths of at 
least 2 of the insurer's principal officers. 
3.  Reserves.  The statements required under subsections 1 and 2 must include, but 
are not limited to, actuarially appropriate reserves for: 
A.  Known claims and associated expenses; 
B.  Claims incurred but not reported and associated expenses; 
C.  Unearned premiums; and 
D.  Bad debts, reserves for which must be shown as liabilities. 
An actuarial opinion regarding reserves for known claims and claims incurred but not 
reported, and expenses associated with those claims, must be included in the audited 
statements.  The actuarial opinion must be given by a member of the American Academy 
of Actuaries or other qualified loss reserve specialist as defined in the annual statement 
instructions adopted by the National Association of Insurance Commissioners. 
4.  Other reports.  The superintendent may prescribe the format and frequency of 
other reports, which may include, but are not limited to, summary loss reports, material 
transaction reports and quarterly interim financial statements. 
Sec. G-9.  24-A MRSA §6715, as amended by PL 1997, c. 583, §5, is further 
amended to read: 
§6715.  Confidential information 
All information submitted to the superintendent pursuant to section 6702, subsection 
and section 6724, subsection 3 is confidential and is not a public record within the 
meaning of Title 1, chapter 13, subchapter I
 1.  Each report or statement filed with the 
superintendent pursuant to section 6707, except those filed by or with respect to industrial 
insured groups as defined in section 6701, subsection 8, is confidential and is not a public 
record within the meaning of Title 1, chapter 13, subchapter I
 1.  The confidential nature 
of this information does not limit the ability of the superintendent, in the superintendent's 
discretion, to disclose such information to a public official in another state, as long as the 
public official agrees in writing to maintain the confidentiality of such information and 
the laws of the state in which the public official serves designate such information as 
confidential. 
Sec. G-10.  24-A MRSA §6724, sub-§2, as enacted by PL 2009, c. 335, §23, is 
amended to read: 
2.  Formation.  One or more sponsors may form a sponsored captive insurance 
company under this chapter. In addition to the general provisions of this chapter, the 
provisions of this section apply to sponsored captive insurance companies. A sponsored 
captive insurance company must be incorporated as a stock insurer with its capital 
divided into shares and held by the stockholder, as a nonprofit corporation with one or 
more members or as a manager-managed limited liability company with a limited liability 
company agreement approved by the superintendent. 
Sec. G-11.  24-A MRSA §6724, sub-§4, ¶B, as enacted by PL 2009, c. 335, §23, 
is amended to read: 
B.  Each participant contract must specify one or more protected cells as the sole 
source of the participant's coverage and limit the covered losses of the participant to 
its pro rata share of
 an amount not to exceed the amount recoverable from the assets 
of the protected cell or cells
 identified in the contract and shall provide for pro rata 
distribution if the assets of a cell are insufficient to pay all liabilities to participants. If 
the sponsored captive insurance company enters into a contract involving more than 
one protected cell, the rights and obligations relating to each protected cell must be 
several rather than joint and the contract must make clear provisions for 
apportionment of the rights and obligations between protected cells; 
Sec. G-12.  24-A MRSA §6724, sub-§4, ¶B-1 is enacted to read: 
B-1.  A sponsored captive insurance company may only reinsure risks of its 
participants, and its liability to a ceding insurer must be limited to amounts 
recoverable from the assets of the protected cell or cells participating in the risks 
giving rise to the underlying losses in accordance with paragraph B.  Any 
management fees or other unallocated expenses payable to a ceding insurer or its 
affiliate or contractor must be charged pro rata to the protected cell or cells assuming 
the reinsurance and may not be a liability of the general account; 
Sec. G-13.  24-A MRSA §6724, sub-§4, ¶C, as enacted by PL 2009, c. 335, §23, 
is amended to read: 
C.  Each protected cell must be accounted for separately on the books and records of 
the sponsored captive insurance company to reflect the financial condition and results 
of operations of each protected cell, net income or loss, dividends or other 
distributions to participants and such other factors as may be provided in the 
participant contract or required by the superintendent.  All attributions of assets and 
liabilities between a protected cell and the general account must be in accordance 
with the plan of operation approved by the superintendent; 
Sec. G-14.  24-A MRSA §6724, sub-§4, ¶L, as enacted by PL 2009, c. 335, §23, 
is amended to read: 
L.  A sponsored captive insurance company shall notify the superintendent in writing 
within 10 business days after the special purpose reinsurance vehicle
 company or any 
protected cell becomes impaired or insolvent. 
SUMMARY 
This bill updates 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 makes 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 enhances regulatory oversight and complies with NAIC accreditation 
requirements by requiring domestic insurance carriers to file corporate governance annual 
disclosure reports and clarifying the filing requirement for quarterly financial statements.  
These requirements apply to health maintenance organizations, nonprofit hospital and 
medical service organizations and fraternal benefit societies as well as to traditional 
commercial insurance companies.  Part A also updates the procedures for examinations 
and holding company supervision for health maintenance organizations, updates other 
financial reporting laws to conform to current requirements and clarifies the applicability 
of statutory accounting principles to nonprofit hospital and medical service organizations. 
Part B facilitates coordinated regulatory action and complies with NAIC accreditation 
requirements by incorporating a group supervision framework.  It amends the law 
regarding Maine insurance holding companies and examination laws to update obsolete 
references to the former NAIC Examiners' Handbook.  It clarifies the Superintendent of 
Insurance's ability to hire examiners with any necessary credentials. It resolves 
inconsistencies in the criminal conviction reporting requirements and clarifies that 
dividend payments and affiliate transactions are aggregated over any consecutive 12-
month period for purposes of applying statutory materiality thresholds. 
Part C amends the law regarding credit for reinsurance to allow the Superintendent of 
Insurance to waive certain requirements and to incorporate the recently developed 
framework establishing uniform minimum collateral requirements for reserve financing 
transactions. 
Part D corrects a conflict between state and federal insolvency laws and clarifies the 
priority of secured claims and federal claims. 
Part E updates the Maine Business Transacted with Broker-Controlled Insurer Act to 
conform it to the current NAIC model act and comply with NAIC accreditation 
requirements.  It corrects an inconsistency by clarifying the law's applicability to 
domestic risk retention groups, and it replaces obsolete references to "brokers" with 
references to "producers."  Part E also clarifies a definition of "licensed insurer," amends 
the disclosure section to treat the producer rather than the insurer as the controlling party, 
removes superfluous enforcement language and repeals an obsolete transition clause. 
Part F makes technical corrections to the risk-based capital standards laws to address 
issues identified during the most recent Department of Professional and Financial 
Regulation, Bureau of Insurance accreditation review.  These amendments codify current 
practice and maintain compliance with NAIC accreditation requirements, clarifying that 
the solvent run-off exception to mandatory control does not apply to health insurers, 
clarifying that confidential risk-based capital information may be shared with other public 
officials and agencies on the same basis as other confidential regulatory information, 
providing that risk-based capital information may not be used for rate-making purposes 
except to the extent that ratemaking and related activities are part of a corrective action 
for a risk-based capital impaired insurer and clarifying that the corrective action plan 
requirements for foreign insurers apply at all action levels. 
Part G updates the captive insurance companies laws to respond to emerging 
regulatory issues and to make technical corrections.  It clarifies the definitions of 
"controlled unaffiliated business" and "pure nonprofit captive insurance company" and 
clarifies that a captive insurance company's license application's supporting documents 
must include a plan of operation and that the additional supporting documents required 
for sponsored captive insurers are subject to the same confidentiality provisions as the 
other supporting documents.  It corrects obsolete references to manager-managed limited 
liability companies and updates the reporting provisions for association and industrial 
captive insurers consistent with Part A of the bill.  It provides that statutory rather than 
generally accepted accounting principles audits are to be filed when the captive insurer 
uses statutory accounting principles as its general basis of accounting, requires a 
sponsored captive insurer's plan of operation to specify how assets and liabilities are 
attributed between the protected cells and the general account and clarifies that a 
sponsored captive insurer's obligations to reinsurers follow the reinsured participant and 
not the general account.