An Act To Ban Discretionary Clauses in Life and Health Insurance Policies
Maine Legislature, Session 129, LD 1089
Committee: Health Coverage, Insurance and Financial Services
Sponsors: CARPENTER
Amends: 24-A MRSA §2501, 24-A MRSA §2557, 24-A MRSA §2770, 24-A MRSA §2847-V, 24-A MRSA §4260

Legislative Document
No. 1089
S.P. 321
In Senate, March 5, 2019
An Act To Ban Discretionary Clauses in Life and Health Insurance 
Policies
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator CARPENTER of Aroostook.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  24-A MRSA §2501, as amended by PL 2009, c. 244, Pt. I, §1, is further 
amended to read:
§2501.  Scope of chapter
This chapter applies only to contracts of life insurance and annuities, other than 
reinsurance, group life insurance and group annuities, except that:
1.  Section 2537 also applies as to group life insurance and group annuity contracts; 
and
2.  Sections 2541 to 2551 apply to group annuities other than those exempted by 
section 2542.; and
3.  Section 2557 also applies to group life insurance and group annuity contracts.
Sec. 2.  24-A MRSA §2557 is enacted to read:
§2557.  Absolute discretion clauses
A policy, contract or certificate offered, delivered, issued or renewed for delivery in 
this State by an insurer to provide life insurance or annuity benefits may not contain a 
provision purporting to reserve sole or absolute discretion to the insurer to interpret the 
terms of the contract or to provide standards of interpretation or review that are 
inconsistent with the laws of this State.  An insurer may not enforce a provision in a 
policy, contract or certificate that was offered, executed, delivered or issued for delivery 
in this State and has been continued or renewed by a group policy holder or individual 
enrollee in this State that purports to reserve sole or absolute discretion to the insurer to 
interpret the terms of the contract or to provide standards of interpretation or review that 
are inconsistent with the laws of this State.
Sec. 3.  24-A MRSA §2770 is enacted to read:
§2770.  Absolute discretion clauses
An individual health insurance policy, contract or certificate may not contain a 
provision purporting to reserve sole or absolute discretion to the insurer to interpret the 
terms of the contract or to provide standards of interpretation or review that are 
inconsistent with the laws of this State.  An insurer may not enforce a provision in a 
policy, contract or certificate that was offered, executed, delivered or issued for delivery 
in this State and has been continued or renewed by an individual enrollee in this State that 
purports to reserve sole or absolute discretion to the insurer to interpret the terms of the 
contract or to provide standards of interpretation or review that are inconsistent with the 
laws of this State.
Sec. 4.  24-A MRSA §2847-V is enacted to read:
§2847-V.  Absolute discretion clauses
A group health insurance policy, contract or certificate may not contain a provision 
purporting to reserve sole or absolute discretion to the insurer to interpret the terms of the 
contract or to provide standards of interpretation or review that are inconsistent with the 
laws of this State.  An insurer may not enforce a provision in a policy, contract or 
certificate that was offered, executed, delivered or issued for delivery in this State and has 
been continued or renewed by a group policy holder in this State that purports to reserve 
sole or absolute discretion to the insurer to interpret the terms of the contract or to provide 
standards of interpretation or review that are inconsistent with the laws of this State.
Sec. 5.  24-A MRSA §4260 is enacted to read:
§4260.  Absolute discretion clauses
An individual or group health maintenance organization policy, contract or certificate 
may not contain a provision purporting to reserve sole or absolute discretion to the insurer 
to interpret the terms of the contract or to provide standards of interpretation or review 
that are inconsistent with the laws of this State.  An insurer may not enforce a provision 
in a policy, contract or certificate that was offered, executed, delivered or issued for 
delivery in this State and has been continued or renewed by a group policy holder or 
individual enrollee in this State that purports to reserve sole or absolute discretion to the 
insurer to interpret the terms of the contract or to provide standards of interpretation or 
review that are inconsistent with the laws of this State.
SUMMARY
This bill adds a provision in the individual and group life insurance and health 
insurance and health maintenance organization provisions in the Maine Insurance Code 
that prohibits the inclusion or enforcement of a contract provision allowing the insurer 
sole or absolute discretion to interpret the terms of the insurance contract.