An Act To Revise Certain Financial Regulatory Provisions of the Maine Insurance Code
Maine Legislature, Session 130, LD 0006
Committee: Health Coverage, Insurance and Financial Services
Amends: 24-A MRSA §221, 24-A MRSA §222, 24-A MRSA §731-B, 24-A MRSA §1151-A, 24-A MRSA §4215, 24-A MRSA §4353, 24-A MRSA §4367

Legislative Document
No. 6
S.P. 13
In Senate, January 13, 2021
An Act To Revise Certain Financial Regulatory Provisions of the 
Maine Insurance Code
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204.
Received by the Secretary of the Senate on January 11, 2021.  Referred to the Committee 
on Health Coverage, Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered 
printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator SANBORN, H. of Cumberland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  24-A MRSA §221, sub-§3, as amended by PL 1991, c. 828, §2, is repealed.
Sec. 2.  24-A MRSA §221, sub-§3-A, as enacted by PL 1993, c. 313, §3, is 
amended to read:
3-A.  On or after January 1, 1994 the The superintendent may accept a full examination 
report by the insurance regulatory authority of the insurance company's state of domicile 
or port-of-entry state for any foreign or alien insurer licensed in this State in lieu of an 
examination by the superintendent if, at the time of the examination, that regulatory 
authority was accredited under the National Association of Insurance Commissioners' 
Financial Regulation Standards and Accreditation Program or if the examination was 
performed under the supervision of an accredited insurance regulatory authority or with the 
participation of one or more examiners who are employed by an accredited insurance 
regulatory authority and who, after a review of the examination workpapers and report, 
state under oath that the examination was performed in a manner consistent with the 
standards and procedures required by the regulatory authority.
Sec. 3.  24-A MRSA §222, sub-§7, ¶A, as amended by PL 2013, c. 238, Pt. A, §14 
and affected by §34, is further amended to read:
A.  The superintendent shall hold a hearing in accordance with the procedures set forth 
in the Maine Administrative Procedure Act, section 231 and Title 5, chapter 375, 
subchapter 4, within 30 days after the application required by subsection 4‑C has been 
filed with the superintendent.  The superintendent shall make a determination within 
days after the conclusion of that hearing.  The superintendent shall approve any 
purchase, exchange, merger or other change of control referred to in subsection 4‑C 
unless the superintendent finds that:
(1)  After the change of control, the domestic insurer could not satisfy the 
requirements for the issuance of a certificate of authority according to requirements 
in force at the time of the issuance or last renewal or continuation of its certificate 
of authority to do the insurance business that it intends to transact in this State;
(2)  The effect of the purchases, exchanges, merger of a controlling person of the 
insurer or other changes of control may be substantially to lessen competition in 
insurance in this State or tend to create a monopoly in this State or would violate 
the laws of this State or of the United States relating to monopolies or restraints of 
trade;
(3)  The financial condition of an acquiring person would jeopardize the financial 
stability of the insurer or prejudice the interest of its policyholders;
(4)  The plans or proposals that the acquiring or divesting person has to liquidate 
the insurer, to sell its assets or to merge it with any person, or to make any other 
major change in its business or corporate structure or management, are unfair or 
prejudicial to policyholders;
(5)  The competence, experience and integrity of those persons who would control 
the operation of the insurer indicate that it would not be in the interest of 
policyholders or the public to permit them to do so;
(6)  Any merger of a domestic insurer does not comply with section 3474; or
(7)  The change of control would tend to affect adversely the contractual 
obligations of the domestic insurer or its ability and tendency to render service in 
the future to its policyholders and the public.
Sec. 4.  24-A MRSA §222, sub-§7-A, ¶D, as enacted by PL 2013, c. 238, Pt. A, 
§15 and affected by §34, is amended by amending subparagraph (3) to read:
(3)  The proceeding is public to the same extent as a proceeding conducted under 
subsection 7, except that deliberations of a decision-making panel are not public 
proceedings and communications in the course of those deliberations among panel 
members and their advisers, other than the decision itself, are not public records.
Sec. 5.  24-A MRSA §222, sub-§8, ¶B-3, as enacted by PL 2013, c. 238, Pt. A, 
§18 and affected by §34, is amended to read:
B-3.  A domestic insurer that is subject to registration, and has annual premium of 
$500,000,000 or more or is a member of an insurance holding company system with 
annual premium of $1,000,000,000 or more, shall conduct an own risk and solvency 
assessment in accordance with the requirements of this paragraph and the ORSA 
guidance manual at least annually, and also at any time when there are significant 
changes to the risk profile of the insurer or its insurance holding company system, 
except as otherwise provided in subparagraph (1).  For purposes of this paragraph, 
"premium" means direct written and unaffiliated assumed premium, including 
international direct and assumed premium but excluding premiums reinsured with the 
Federal Crop Insurance Corporation within the United States Department of 
Agriculture, Risk Management Agency and with the National Flood Insurance 
Program within the United States Department of Homeland Security, Federal 
Emergency Management Agency.
(1)  This paragraph does not apply if:
(a)  The insurer is an agency, authority or instrumentality of the United States, 
its possessions and territories, the Commonwealth of Puerto Rico, the District 
of Columbia or a state or political subdivision of a state;
(b)  The insurer and its insurance holding company system did not meet either 
of the minimum premium criteria of this paragraph in the financial statements 
immediately preceding their most recent financial statements and the 
superintendent has not required compliance with this paragraph under 
subparagraph (2); or
(c)  The superintendent has granted a waiver from the requirements of this 
paragraph based upon unique circumstances.  In deciding whether to grant a 
waiver, the superintendent may consider the type and volume of business 
written by the insurer, the ownership and organizational structure of the insurer 
and its insurance holding company system and any other factor the 
superintendent considers relevant to the insurer or the insurer's insurance 
holding company system.  If the insurer's insurance holding company system 
includes insurers domiciled in more than one state, the superintendent shall 
coordinate with the lead regulator and with other domiciliary regulators in 
considering whether to grant the insurer's request for a waiver.
(2)  The superintendent may require an insurer that does not meet either of the 
minimum premium criteria of this paragraph to comply with the requirements of 
this paragraph if:
(a)  The superintendent determines that the insurer should be subject to this 
paragraph due to unique circumstances, including, but not limited to, the type 
and volume of business written by the insurer, the ownership and 
organizational structure of the insurer and its insurance holding company 
system, federal agency requests and international supervisor requests;
(b)  The insurer is subject to a corrective order or required to adopt a risk-based 
capital plan under sections 6453 to 6456;
(c)  The superintendent has determined in accordance with rules adopted by 
the superintendent that the insurer is in hazardous financial condition; or
(d)  The superintendent has determined that the insurer otherwise exhibits 
qualities of a troubled insurer.
(3)  If an insurer's insurance holding company system has annual premium of 
$1,000,000,000 or more, the assessment and reporting required by this paragraph 
must be conducted for each insurer within the insurance holding company system, 
either on a systemwide basis or separately for insurers or combinations of insurers 
within the insurance holding company system.
(4)  An insurer subject to this paragraph shall maintain a risk management 
framework to assist the insurer with identifying, assessing, monitoring, managing 
and reporting on its material and relevant risks.  An insurer may satisfy this 
requirement by participating in an applicable risk management framework 
maintained by the insurance holding company system of which the insurer is a 
member.
(5)  An insurer subject to this paragraph shall prepare and submit regular ORSA 
summary reports that satisfy the requirements of this subparagraph and shall 
provide additional information to the superintendent upon request.
(a)  Beginning no later than 2015, the ORSA summary report must be prepared 
at least annually, on a timetable consistent with the insurer's internal strategic 
planning processes, and submitted to the lead regulator of the insurer's 
insurance holding company system, as determined by the procedures within a 
financial analysis handbook adopted by the National Association of Insurance 
Commissioners.  If the superintendent is not the lead regulator, the insurer shall 
submit the insurer's or insurance holding company system's most recent ORSA 
summary report to the superintendent on request.
(b)  The ORSA summary report must be prepared consistent with the ORSA 
guidance manual.  Documentation and supporting information must be 
maintained and made available upon examination by or upon request of the 
superintendent.
(c)  The insurer's or insurance holding company system's chief risk officer, or 
other executive having responsibility for the oversight of the insurer's 
enterprise risk management process, shall sign the ORSA summary report 
attesting to the best of the signer's belief and knowledge that the insurer applies 
the enterprise risk management process described in the ORSA summary 
report and that a copy of the report has been provided to the insurer's board of 
directors or the appropriate committee of the board.
(d)  An insurer may comply with this paragraph by providing the most recent 
ORSA summary report and a report or reports that are substantially similar to 
the ORSA summary report that are provided by the insurer or another member 
of its insurance holding company system to the insurance commissioner of 
another state or to an insurance supervisor or regulator of a foreign jurisdiction 
if that report provides information that is comparable to the information 
described in the ORSA guidance manual.  Any report in a language other than 
English must be accompanied by an English translation.
(6)  The superintendent's review of the ORSA summary report, and any additional 
requests for information, must be consistent with accepted regulatory procedures 
for the analysis and examination of multistate or global insurers and insurance 
groups.
Sec. 6.  24-A MRSA §731-B, sub-§1, as amended by PL 2007, c. 169, Pt. C, §1, is 
further amended to read:
1.  Credit Except to the extent that the liabilities ceded are secured in accordance with 
subsection 3, credit for reinsurance is allowed a domestic ceding insurer as either an asset 
or a deduction from liability on account of reinsurance ceded only when the reinsurance is 
ceded to a solvent assuming insurer that:
A.  Is licensed to transact insurance or reinsurance in this State, provided the assuming 
insurer maintains surplus as regards policyholders in an amount not less than the sum 
of paid-in capital stock, if any, and surplus as otherwise required for a certificate of 
authority for the kinds and amount of insurance and assumed reinsurance the insurer 
has in force net of any applicable ceded reinsurance.  If the assuming insurer is licensed 
as a special purpose reinsurance vehicle pursuant to section 782 and maintains capital 
and surplus in accordance with the requirements of section 787, credit for reinsurance 
under a special purpose reinsurance vehicle contract, as defined in section 781, 
subsection 15, is allowed only to the extent that:
(1)  The fair value of the assets held by or for the benefit of the ceding insurer 
equals or exceeds the obligations due and payable to the ceding insurer by the 
special purpose reinsurance vehicle under the special purpose reinsurance vehicle 
contract;
(2)  The assets are held in accordance with the requirements in subchapter 6;
(3)  The assets are administered in the manner and pursuant to arrangements under 
subchapter 6;
(4)  The assets are held or invested in one or more of the forms allowed in section 
795; and
(5)  The contract complies with all other relevant requirements of subchapter 6;
B.  Is domiciled and licensed in a state that employs standards regarding credit for 
reinsurance substantially similar to those applicable under this section, if the insurer:
(1)  Submits to the authority of this State to examine its books and records; and
(2)  Except where reinsurance is ceded and assumed pursuant to pooling 
arrangements among insurers in the same holding company system, maintains a 
surplus regarding policyholders in an amount not less than $20,000,000;
B-1.  Is accredited as a reinsurer in this State, in accordance with the following 
standards.
(1)  To apply for accreditation, a reinsurer shall file with the superintendent a 
written application on a form prescribed by the superintendent, accompanied by 
the fee prescribed in section 601, subsection 26 and an agreement to submit to the 
jurisdiction of the courts of this State and to the authority of the superintendent to 
examine the reinsurer's books and records.
(2)  An accredited reinsurer must be licensed to transact insurance or reinsurance 
in at least one state, or in the case of a United States branch of an alien reinsurer, 
that reinsurer must be entered through and licensed to transact insurance or 
reinsurance in at least one state.
(3)  An accredited reinsurer shall file with the superintendent, as part of its 
application and annually thereafter, a copy of its annual statement filed with the 
insurance department of its state of domicile or United States port of entry and a 
copy of its most recent audited financial statement.
(4)  A reinsurer applying for accreditation that maintains a surplus as regards to 
policyholders in an amount not less than $20,000,000 is deemed to be accredited 
if the reinsurer's application is not denied by the superintendent within 90 days 
after submission of the application.  The superintendent has the discretion to grant 
accreditation to an applicant with a surplus less than $20,000,000 subject to such 
terms and conditions as the superintendent determines to be necessary and 
appropriate for the protection of domestic ceding insurers and their policyholders.;
B-2.  Is certified as a reinsurer in this State and secures its obligations in accordance 
with this paragraph.
(1)  To be eligible for certification, the assuming insurer must meet the following 
requirements:
(a)  The assuming insurer must be domiciled and licensed to transact insurance 
or reinsurance in a jurisdiction determined by the superintendent to be a 
qualified jurisdiction pursuant to subparagraph (3);
(b)  The assuming insurer must maintain minimum capital and surplus, or its 
equivalent, in an amount to be determined by the superintendent pursuant to 
rules adopted under subsection 7;
(c)  The assuming insurer must maintain financial strength ratings from 2 or 
more rating agencies determined by the superintendent to be acceptable 
pursuant to rules adopted under subsection 7;
(d)  The assuming insurer must agree to submit to the jurisdiction of this State 
and to appoint an agent for service of process in the same manner as provided 
for authorized insurers under section 421 and agree to provide security for 
100% of the assuming insurer's liabilities attributable to reinsurance ceded by 
United States ceding insurers if the assuming insurer resists enforcement of a 
final United States judgment;
(e)  The assuming insurer must agree to meet applicable information filing 
requirements as determined by the superintendent, both with respect to an 
initial application for certification and on an ongoing basis.  Documents filed 
with the superintendent by the assuming insurer are not public records if the 
documents are confidential under the laws of the assuming insurer's 
domiciliary jurisdiction;
(f)  The assuming insurer must pay the application fee prescribed in section 
601, subsection 26-A and, to the extent provided in rules adopted under 
subsection 7, must agree to pay reasonable costs of review; and
(g)  The assuming insurer must satisfy any other requirements for certification 
established by the superintendent.
(2)  An association including incorporated and individual unincorporated 
underwriters may be a certified reinsurer.  In order to be eligible for certification, 
in addition to satisfying the requirements of subparagraph (1):
(a)  The association may satisfy its minimum capital and surplus requirements 
through the capital and surplus equivalents, net of liabilities, of the association 
and its members, which must include a joint central fund that may be applied 
to any unsatisfied obligation of the association or any of its members, in an 
amount determined by the superintendent to provide adequate protection;
(b)  The incorporated members of the association may not be engaged in any 
business other than underwriting as a member of the association and must be 
subject to the same level of regulation and solvency control by the association's 
domiciliary regulator as are the unincorporated members; and
(c)  Within 90 days after its financial statements are due to be filed with the 
association's domiciliary regulator, the association shall provide to the 
superintendent an annual certification by the association's domiciliary 
regulator of the solvency of each underwriter member of the association or, if 
a certification is unavailable, financial statements, prepared by independent 
public accountants, of each underwriter member of the association.
(3)  The superintendent shall create and publish a list of jurisdictions that are 
qualified to serve as the domiciliary regulators of certified reinsurers.
(a)  In order to determine whether the domiciliary jurisdiction of an alien 
assuming insurer is eligible to be recognized as a qualified jurisdiction, the 
superintendent shall evaluate the appropriateness and effectiveness of the 
reinsurance supervisory system of the jurisdiction, both initially and on an 
ongoing basis, and consider the rights, benefits and the extent of reciprocal 
recognition afforded by the jurisdiction to reinsurers licensed and domiciled in 
the United States.  To be recognized as qualified, a jurisdiction must agree to 
share information and cooperate with the superintendent with respect to all 
certified reinsurers domiciled within that jurisdiction.  A jurisdiction may not 
be recognized as a qualified jurisdiction if the superintendent has determined 
that the jurisdiction does not adequately and promptly enforce final United 
States judgments and arbitration awards.  The superintendent may consider 
additional factors.
(b)  If the National Association of Insurance Commissioners has published a 
list of recommended qualified jurisdictions, the superintendent shall consider 
that list in determining qualified jurisdictions.  If the superintendent recognizes 
a jurisdiction as qualified that does not appear on the list published by the 
National Association of Insurance Commissioners, the superintendent shall 
make detailed findings of fact supporting the recognition in accordance with 
criteria to be developed in rules adopted under subsection 7.
(c)  United States jurisdictions that are accredited by the National Association 
of Insurance Commissioners must be recognized as qualified jurisdictions.
(d)  If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified 
jurisdiction, the superintendent may suspend the reinsurer's certification 
indefinitely, in lieu of revocation.
(4)  The superintendent shall assign a rating to each certified reinsurer, giving due 
consideration to the financial strength ratings that have been assigned by rating 
agencies determined to be acceptable pursuant to rules adopted under subsection 
7.  The superintendent shall publish a list of all certified reinsurers and their ratings.
(5)  A certified reinsurer shall secure all obligations assumed from United States 
ceding insurers under this subsection, and under comparable laws of other states, 
at a level consistent with its rating and in a form acceptable to the superintendent, 
in compliance with rules adopted under subsection 7.
(a)  If the security is insufficient, the superintendent shall reduce the allowable 
credit by an amount proportionate to the deficiency and may impose further 
reductions in allowable credit upon finding that there is a material risk that the 
certified reinsurer's obligations will not be paid in full when due.
(b)  The reinsurer may secure its obligations as a certified reinsurer through a 
multibeneficiary trust that meets the requirements of paragraph C and 
subsection 2-A, with the following modifications.
(i)  The maximum credit allowable may exceed the value of the qualifying 
security to the extent provided in this subparagraph.
(ii)  The minimum trusteed surplus is $10,000,000, rather than the amount 
specified in paragraph C.
(iii)  If the certified reinsurer also maintains a multibeneficiary trust for 
obligations required to be fully secured under paragraph C or comparable 
laws of other states, the certified reinsurer shall maintain separate trust 
accounts for its obligations incurred under reinsurance agreements issued 
or renewed with reduced security as permitted by this paragraph or 
comparable laws of other United States jurisdictions and for its obligations 
that are required to be fully secured.  The trust accounts may not be 
approved as qualifying security unless the reinsurer has bound itself, by 
the language of the trust and by agreement with the insurance regulator 
with principal oversight of each such trust account, to apply, upon 
termination of any such trust account, the remaining surplus of that trust 
to the extent necessary to fund any deficiency of any other such trust 
account.
(c)  If a certified reinsurer does not secure its obligations through a qualifying 
multibeneficiary trust, it must secure its obligations to the ceding insurer 
consistent with the requirements of subsection 3, except that the maximum 
credit allowable may exceed the value of the qualifying security to the extent 
provided in this subparagraph.
(d)  For purposes of this subparagraph, a certified reinsurer whose certification 
has been terminated for any reason must be treated as a certified reinsurer 
required to secure 100% of its obligations, unless the superintendent has 
continued to assign a higher rating, as permitted by other provisions of this 
section, to a certified reinsurer in inactive status or to a reinsurer whose 
certification has been suspended.
(6)  If an applicant for certification has been certified as a reinsurer in a jurisdiction 
accredited by the National Association of Insurance Commissioners, the 
superintendent may defer to that jurisdiction's certification to grant certification in 
this State and may defer to the rating assigned by that jurisdiction.
(7)  A certified reinsurer that ceases to assume new business in this State may 
request to maintain its certification in inactive status in order to continue to qualify 
for a reduction in security for its in-force business.  An inactive certified reinsurer 
shall continue to comply with all applicable requirements of this subsection, and 
the superintendent shall assign a rating that takes into account, if relevant, the 
reasons why the reinsurer is not assuming new business.;
B-3.  Meets each of the conditions established in subparagraphs (2) to (8).
(1)  For purposes of this paragraph, the following terms have the following 
meanings.
(a)  "Covered agreement" means an agreement, entered into pursuant to the 
federal Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 
United States Code, Sections 313 and 314, that is in effect or in a period of 
provisional application and addresses the elimination, under specified 
conditions, of collateral requirements as a condition for entering into any 
reinsurance agreement with a ceding insurer domiciled in this State or for 
allowing the ceding insurer to recognize credit for reinsurance.
(b)  "Reciprocal jurisdiction" means a jurisdiction that is:
(i)  A non-United States jurisdiction that is subject to an in-force covered 
agreement with the United States, as long as each agreeing jurisdiction is 
within its legal authority to enter the agreement, or, in the case of a covered 
agreement between the United States and the European Union, a member 
state of the European Union;
(ii) A United States jurisdiction that meets the requirements for 
accreditation under the financial regulation standards and accreditation 
program of the National Association of Insurance Commissioners; or
(iii)  A qualified jurisdiction, as determined by the superintendent pursuant 
to paragraph B-2, subparagraph (3), that meets certain additional 
requirements, consistent with the terms and conditions of covered 
agreements, as specified by the superintendent by rule.
(2)  The assuming insurer must have its domicile or head office in, and be licensed 
in, a reciprocal jurisdiction.
(3)  The assuming insurer must have and maintain on an ongoing basis minimum 
capital and surplus, or its equivalent, calculated according to the methodology 
applicable in its domiciliary jurisdiction, in an amount established by rule.  If the 
assuming insurer is an association that includes incorporated and individual 
unincorporated underwriters, it must have and maintain on an ongoing basis 
minimum capital and surplus equivalents, net of liabilities, calculated according to 
the methodology applicable in its domiciliary jurisdiction, and a central fund 
containing a balance in amounts established by rule.
(4)  The assuming insurer must have and maintain on an ongoing basis a minimum 
solvency or capital ratio, as applicable, as established by rule.  If the assuming 
insurer is an association that includes incorporated and individual unincorporated 
underwriters, it must have and maintain on an ongoing basis a minimum solvency 
or capital ratio, as applicable, in the jurisdiction where the assuming insurer has its 
head office or is domiciled, as applicable.
(5)  The assuming insurer must agree, and provide adequate assurance to the 
superintendent in a form specified by the superintendent by rule, as follows:
(a)  The assuming insurer must provide prompt written notice and explanation 
to the superintendent if it fails to meet the minimum requirements set forth in 
subparagraph (3) or (4) or if any regulatory action is taken against it for serious 
noncompliance with applicable law;
(b)  The assuming insurer must consent in writing to the jurisdiction of the 
courts of this State and to the appointment of the superintendent as agent for 
service of process.  The superintendent may require the assuming insurer to 
include such consent in each reinsurance agreement for which credit is taken 
under this paragraph.  This division does not limit or in any way alter the 
capacity of parties to a reinsurance agreement to agree to alternative dispute 
resolution mechanisms, except to the extent that such agreements are 
unenforceable under applicable insolvency or delinquency laws;
(c)  The assuming insurer must consent in writing to pay all final judgments, 
wherever enforcement is sought, that are obtained by a ceding insurer or its 
legal successor and that have been declared enforceable in the jurisdiction 
where the judgment was obtained;
(d)  Each reinsurance agreement for which credit is taken under this paragraph 
must include a provision requiring the assuming insurer to provide security for 
the full amount of the assuming insurer's liabilities attributable to reinsurance 
ceded pursuant to that agreement if the assuming insurer resists enforcement 
of a final judgment that is enforceable under the law of the jurisdiction where 
the final judgment was obtained or resists enforcement of a properly 
enforceable arbitration award, whether the judgment or award is obtained by 
the ceding insurer or by its legal successor on behalf of its resolution estate.  
As used in this division, "resolution estate" means the estate of an insurer or 
reinsurer that has been placed into a receivership or comparable legal status; 
and
(e)  The assuming insurer must confirm that it is not participating in any solvent 
scheme of arrangement that involves this State's ceding insurers and must 
agree to notify the ceding insurer and the superintendent and to provide 
security for the full amount of the assuming insurer's liabilities to the ceding 
insurer should the assuming insurer enter into such a solvent scheme of 
arrangement. Such security must be in a form consistent with the provisions of 
paragraph B-2 and subsection 3 and as specified by the superintendent by rule.
(6)  The assuming insurer or its legal successor must provide, on behalf of itself 
and any legal predecessors, certain documentation to the superintendent as 
specified by the superintendent by rule, if requested by the superintendent.
(7)  The assuming insurer must maintain a practice of prompt payment of claims 
under reinsurance agreements, pursuant to criteria established by rule.
(8)  The supervisory authority for insurance for the jurisdiction of the assuming 
insurer must confirm to the superintendent on an annual basis that, as of the 
preceding December 31st or the annual date specified in statute for reporting to 
that supervisory authority in the assuming insurer's jurisdiction, the assuming 
insurer complies with the requirements of subparagraphs (3) and (4).
(9)  The assuming insurer may provide additional information on a voluntary basis.
(10)  The superintendent shall promptly create, publish and administer a list of 
reciprocal jurisdictions as described in this subparagraph.
(a)  The superintendent shall include all reciprocal jurisdictions identified in 
subparagraph (1), division (b), subdivisions (i) and (ii) in the list maintained 
pursuant to this subparagraph.
(b)  If the National Association of Insurance Commissioners has published a 
list of recommended reciprocal jurisdictions, the superintendent shall consider 
that list and may defer to that list in determining whether a jurisdiction qualifies 
as a reciprocal jurisdiction pursuant to subparagraph (1), division (b), 
subdivision (iii).  The superintendent may determine that a jurisdiction that 
does not appear on the recommended list is a reciprocal jurisdiction in 
accordance with criteria established in rules adopted by the superintendent.
(c)  If a jurisdiction has been determined to be a reciprocal jurisdiction pursuant 
to subparagraph (1), division (b), subdivision (iii), the superintendent, in 
accordance with a process established by rule by the superintendent, may 
determine that the jurisdiction is no longer a reciprocal jurisdiction and remove 
it from the list of reciprocal jurisdictions upon a determination that the 
jurisdiction no longer meets the conditions of this paragraph.  Upon removal 
of a reciprocal jurisdiction from the list, credit for reinsurance ceded to an 
assuming insurer that has its head office or is domiciled in that jurisdiction is 
allowed only as otherwise allowed pursuant to this section.
(11)  The superintendent shall promptly create, publish and administer a list of 
assuming insurers that have satisfied the conditions set forth in subparagraphs (2) 
to (8) for recognition for credit for reinsurance.  The superintendent may add an 
assuming insurer to the list if it has been listed under a substantially similar law by 
a jurisdiction accredited by the National Association of Insurance Commissioners 
or if, upon a request for recognition of eligibility, the assuming insurer submits the 
information to the superintendent as required under subparagraph (5) and complies 
with any additional requirements that the superintendent may impose by rule, 
except to the extent that those requirements conflict with an applicable covered 
agreement.
(12)  If the superintendent determines that an assuming insurer no longer meets 
one or more of the conditions of this paragraph, the superintendent may suspend 
or revoke the recognition of the assuming insurer for credit for reinsurance under 
this paragraph in accordance with procedures established by rule.
(a)  While an assuming insurer's recognition for credit is suspended, a 
reinsurance agreement issued, amended or renewed after the effective date of 
the suspension does not qualify for credit under this paragraph.  Credit may be 
granted only to the extent that the assuming insurer's obligations under the 
contract are secured in accordance with other provisions of this subsection or 
with subsection 3.
(b)  If an assuming insurer's recognition for credit is revoked, credit for 
reinsurance may not be granted after the effective date of the revocation with 
respect to any reinsurance agreements entered into by the assuming insurer, 
including reinsurance agreements entered into before the date of revocation, 
except to the extent that the assuming insurer's obligations under the contract 
are secured in a form acceptable to the superintendent and consistent with other 
provisions of this subsection or with subsection 3.
(13)  If a ceding insurer that has been granted credit under this paragraph is subject 
to a legal process of rehabilitation, liquidation or conservation, the ceding insurer 
or its representative may seek and, if determined appropriate by the court in which 
the proceedings are pending, may obtain an order requiring the assuming insurer 
to post security for all outstanding ceded liabilities.
(14)  This paragraph does not limit or in any way alter the capacity of parties to a 
reinsurance agreement to agree on requirements for security or other terms in that 
reinsurance agreement, except as expressly prohibited by this section or other 
applicable law or rule.
(15)  Credit under this paragraph may be taken only for reinsurance pursuant to 
reinsurance agreements entered into, renewed or amended on or after the effective 
date of this paragraph and only with respect to losses incurred or reserves reported 
on or after the date on which the assuming insurer has met all eligibility 
requirements pursuant to subparagraphs (2) to (8) or the effective date of the new 
reinsurance agreement, amendment or renewal, whichever is later.
This subparagraph does not alter or impair a ceding insurer's right to take credit for 
reinsurance, to the extent that credit is not available under this paragraph, as long 
as the reinsurance qualifies for credit under any other applicable provision of this 
section.
(16)  Nothing in this paragraph:
(a)  Authorizes an assuming insurer to withdraw or reduce the security 
provided under any reinsurance agreement except as permitted by the terms of 
the agreement; or
(b)  Limits, or in any way alters, the capacity of parties to any reinsurance 
agreement to renegotiate the agreement;
C.  Maintains a trust fund in a qualified United States financial institution for the 
payment of the valid claims of its United States ceding insurers, their assigns and 
successors in interest.
(1)  The assuming insurer shall report annually to the superintendent information 
substantially the same as that required to be reported on the National Association 
of Insurance Commissioners Annual Statement form by licensed insurers to enable 
the superintendent to determine the sufficiency of the trust fund.
(2)  In the case of a single assuming insurer, the trust must consist of a trusteed 
account representing the assuming insurer's liabilities attributable to reinsurance 
ceded by United States ceding insurers and, in addition, unless the assuming 
insurer has permanently discontinued underwriting new business secured by the 
trust for at least 3 full years, must include a trusteed surplus of at least $20,000,000.  
The trust must provide that after the assuming insurer has permanently 
discontinued underwriting new business secured by the trust for at least 3 full years, 
the insurance regulator with principal oversight of the trust may authorize a 
reduction in the required trusteed surplus, but only after a finding, based on an 
assessment of the risk, that the new required surplus level is adequate for the 
protection of United States ceding insurers, policyholders and claimants in light of 
reasonably foreseeable adverse loss development.  The risk assessment may 
involve an actuarial review, including an independent analysis of reserves and cash 
flows, and must consider all material risk factors, including when applicable the 
lines of business involved, the stability of the incurred loss estimates and the effect 
of the surplus requirements on the assuming insurer's liquidity or solvency.  The 
minimum required trusteed surplus may not be reduced to an amount less than 30% 
of the assuming insurer's liabilities attributable to reinsurance ceded by United 
States ceding insurers covered by the trust.
(3-A)  A group including incorporated and individual unincorporated underwriters 
may secure its obligations with funds held in trust in compliance with the following 
standards.
(a)  For reinsurance ceded under reinsurance agreements with an inception, 
amendment or renewal date on or after January 1, 1993, the trust must consist 
of a trusteed account in an amount at least equal to the respective underwriters' 
several liabilities attributable to reinsurance ceded by United States domiciled 
ceding insurers to any underwriter that is a member of the group.
(b)  Notwithstanding the other provisions of this section, for reinsurance ceded 
under reinsurance agreements with an inception date on or before December 
31, 1992 and not amended or renewed after that date, the trust must consist of 
a trusteed account in an amount not less than the respective underwriters' 
several insurance and reinsurance liabilities attributable to business written in 
the United States.
(c)  In addition, the group shall maintain a trusteed surplus of at least 
$100,000,000 held jointly for the benefit of the United States domiciled ceding 
insurers of any member of the group for all years of account.
An incorporated member of the group may not be engaged in any business other 
than underwriting as a member of the group and is subject to the same level of 
solvency regulation and control by the group's domiciliary regulator as are the 
unincorporated members. Within 90 days after its financial statements are due to 
be filed with the group's domiciliary regulator, the group shall provide to the 
superintendent an annual certification by the group's domiciliary regulator of the 
solvency of each underwriter member of the group or, if a certification is 
unavailable, financial statements prepared by independent public accountants.
(4-A)  The superintendent in rules adopted pursuant to subsection 7 may establish 
alternative criteria for approval of a reinsurance trust if the superintendent 
determines that the criteria provide adequate protection to policyholders of United 
States ceding insurers and are in substantial conformance with standards approved 
by the National Association of Insurance Commissioners.
(5)  The trust must be established in a form approved by the superintendent and 
consistent with any rules adopted by the superintendent pursuant to this section.  
The form of the trust and any amendments to the trust must also have been 
approved by the insurance regulatory official of the state where the trust is 
domiciled or of another state that, pursuant to the terms of the trust instrument, has 
accepted principal regulatory oversight of the trust.  The trust instrument must 
provide that contested claims are valid and enforceable upon the final order of any 
court of competent jurisdiction in the United States.  The trust must vest legal title 
to its assets in the trustees of the trust for the benefit of the assuming insurer's 
United States ceding insurers, their assigns and successors in interest.  The trust 
and the assuming insurer are subject to examination, as determined by the 
superintendent, at the assuming insurer's expense.  The trust must remain in effect 
for as long as the assuming insurer has outstanding obligations due under the 
reinsurance agreements subject to the trust.
(6)  The trustees of the trust shall report to the superintendent in writing by 
February 28th of each year, setting forth the balance of the trust and listing the 
trust's investments at the end of the preceding year and certifying the date of 
termination of the trust, if so planned, or certifying that the trust does not expire 
before December 31st of the current year.
(7)  The corpus of the trust is to be valued as any other admitted asset or assets; or
D.  Does not meet the requirements of paragraph A, B, B-1, B-2, B-3 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. 7.  24-A MRSA §731-B, sub-§2-B, ¶E, as enacted by PL 2017, c. 169, Pt. C, 
§2, is amended to read:
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 
states.; or
(3)  Is eligible for credit for assumed reinsurance by reciprocity pursuant to 
subsection 1, paragraph B-3.
Sec. 8.  24-A MRSA §731-B, sub-§3, ¶B, as amended by PL 2013, c. 238, Pt. B, 
§8, is further amended to read:
B.  Securities listed by the Securities Valuation Office of the National Association of 
Insurance Commissioners, including those designated as exempt from filing in the 
purposes and procedures manual of the Securities Valuation Office, and qualifying as 
admitted assets; or
Sec. 9.  24-A MRSA §731-B, sub-§3, ¶C, as amended by PL 1993, c. 313, §18, is 
further amended by amending subparagraph (2) to read:
(2)  The letter of credit must indicate that it is not subject to any condition or 
qualification outside the letter of credit, and that the beneficiary need only draw a 
sight draft under the letter and present the letter to obtain funds and that no other 
document need be presented.; or
Sec. 10.  24-A MRSA §731-B, sub-§3, ¶D is enacted to read:
D.  Any other form of security that the superintendent may permit by rule adopted as 
set forth in subsection 7.
Sec. 11.  24-A MRSA §1151-A, sub-§41, as enacted by PL 1999, c. 715, §8, is 
amended to read:
41.  Repurchase transaction.  "Repurchase transaction" means a transaction in which 
an insurer purchases securities from a counter-party that is obligated to repurchase the 
purchased securities or equivalent securities from the insurer sells securities to a qualified 
bank or a qualified business entity or to a bank or a business entity whose obligations with 
respect to the transaction are guaranteed by a qualified bank or a qualified business entity 
and the insurer is obligated to repurchase the sold securities or equivalent securities from 
the bank or business entity at a specified price, either within a specified period of time or 
upon demand.
Sec. 12.  24-A MRSA §1151-A, sub-§42, as enacted by PL 1999, c. 715, §8, is 
amended to read:
42.  Reverse repurchase transaction.  "Reverse repurchase transaction" means a 
transaction in which an insurer sells securities to a qualified bank or a qualified business 
entity or a bank or a business entity whose obligations with respect to such transaction are 
guaranteed by a qualified bank or a qualified business entity and the insurer is obligated to 
repurchase the sold securities or equivalent securities from the bank or business entity 
purchases securities from a counter-party that is obligated to repurchase the purchased 
securities or equivalent securities from the insurer at a specified price, either within a 
specified period of time or upon demand.
Sec. 13.  24-A MRSA §4215, sub-§1, as enacted by PL 1975, c. 503, is amended 
to read:
1.  The superintendent may make an examination of the affairs of any health 
maintenance organization as often as he deems the superintendent considers it necessary 
for the protection of the interests of the people of this State, but not less frequently than 
once every 3 years.  The superintendent may defer making an examination for no more 
than 2 additional years. In lieu of the superintendent's making an examination of a foreign 
or alien health maintenance organization, the superintendent may accept a full report of the 
most recent examination certified by the chief regulatory official of another state with 
responsibility for the financial oversight of health maintenance organizations.
Sec. 14.  24-A MRSA §4353, sub-§6, as amended by PL 1973, c. 585, §12, is 
further amended to read:
6.  "Reciprocal state" means any state other than this State in which there is in force, in 
substance and effect, a law substantially similar to the uniform insurers liquidation act, as 
defined in section 4363, is in force Uniform Insurers Liquidation Act or another law 
determined by the superintendent to establish adequate procedures for the conduct and 
interstate coordination of the rehabilitation and liquidation of delinquent insurers, including 
provisions requiring that the Insurance Superintendent insurance superintendent or 
equivalent insurance supervisory official be the receiver of a delinquent insurer, and in 
which effective provisions exist for avoidance of fraudulent conveyances and unlawful 
preferential transfers.
Sec. 15.  24-A MRSA §4367, sub-§3 is enacted to read:
3.  The courts of this State shall give full faith and credit to any stay of or injunction 
barring new actions against an insurer or its receiver, or the continuation of existing actions 
against an insurer or its receiver, when the stay or injunction is pursuant to an order to 
liquidate or rehabilitate an insurer issued in accordance with the delinquency laws of a 
reciprocal state.
SUMMARY
This bill updates several provisions of the Maine Insurance Code by incorporating 
recent amendments to model laws adopted by the National Association of Insurance 
Commissioners, or NAIC, and making related technical changes.
It corrects a conflict in the law governing examination of insurers by the Superintendent 
of Insurance and eliminates obsolete transition language.
It clarifies that adjudicatory proceedings conducted under the Maine Revised Statutes, 
Title 24-A, section 222 to review changes of control of domestic insurers are governed by 
the same procedural requirements as other Department of Professional and Financial 
Regulation, Bureau of Insurance adjudicatory proceedings and that multistate proceedings 
conducted under Maine law are considered public proceedings to the same extent as single-
state proceedings subject only to the exceptions expressly enumerated in Title 24-A, section 
222, subsection 7-A, paragraph D.
It clarifies that when an insurer or insurance group is required to conduct an own risk 
and solvency assessment, the assessment must be conducted in compliance with the NAIC 
Own Risk and Solvency Assessment (ORSA) Guidance Manual, as well as include the 
summary report as required under current law.
It corrects a conflict between Title 24-A, section 731-B, subsections 1 and 3, clarifying 
that subsection 1 is not the exclusive mechanism by which credit for reinsurance may be 
granted, and clarifies that section 731-B, subsection 3 allows other forms of security to the 
extent authorized by the Superintendent of Insurance by rule.
It provides that documents that a certified reinsurer is required to file are not public 
records if they are confidential under the laws of the reinsurer's domiciliary jurisdiction.
It brings Maine into compliance with the bilateral agreements entered into by the 
United States with the European Union and the United Kingdom by enacting the 2019 
amendments to the NAIC Credit for Reinsurance Model Law, which provide a mechanism 
for large, financially strong non-United States reinsurers to qualify for eligibility by 
reciprocity to assume reinsurance from domestic insurers without posting security.
It corrects a NAIC drafting error from 2000 that inadvertently transposed the content 
of the definitions of "repurchase transaction" and "reverse repurchase transaction."
It corrects an inconsistency between Title 24-A, section 4215, subsection 1, which 
requires health maintenance organizations, or HMOs, to be examined by the 
Superintendent of Insurance at least every 3 years, and Title 24-A, section 221, which 
applies to HMOs pursuant to Title 24-A, section 4222-B, subsection 5 and which permits 
the examination period to be extended to 5 years.  It also authorizes the superintendent to 
accept the domiciliary chief regulatory official's examination in satisfaction of Maine's 
requirement when a company is domiciled outside Maine.  The purpose of these 
amendments is to allow Maine to participate in coordinated examinations with 
synchronized schedules for HMOs that are members of insurance groups.
It amends the reciprocity provisions of Maine's receivership laws by recognizing as 
reciprocal states those states with laws determined by the Superintendent of Insurance to 
be adequate or substantially similar to the NAIC's model insolvency laws, and brings Maine 
into conformity with the NAIC's guidelines for interstate recognition of stays and 
injunctions in receivership.