Sec. 1. 29-A MRSA §1602, sub-§1-A is enacted to read:

1-A.__Demand after cancellation or termination of policy.__On the 11th day after receipt of a notice of cancellation or termination of the policy required under section 1606, subsection 5, the Secretary of State shall demand of the former policyholder proof of financial responsibility under section 1605.__This notice must include a statement of the legal penalties for failure to provide the proof demanded.

This subsection does not apply to:

A.__Cancellation or termination occasioned by sale of the vehicle insured by the policy; or

B.__Cancellation or termination when substitute proof of financial responsibility has been provided in a timely fashion and accepted by the Secretary of State.

Sec. 2. 29-A MRSA §1606, sub-§5, as enacted by PL 1993, c. 683, Pt. A, §2 and affected by Pt. B, §5, is amended to read:

5. Cancellation of policy. A policy certified as proof of financial responsibility may not be canceled until at least 10 days after notice of cancellation has been filed in the office of the Secretary of State. The company may not cancel a policy until the insured has presented to the company a receipt from the Secretary of State indicating that the registration plates assigned to the insured motor vehicle have been returned to the Secretary of State.

A policy subsequently certified terminates on the effective date of certification the insurance previously certified with respect to a motor vehicle designated in both certificates.

The company may specify on a certificate the expiration date of the policy. When an expiration date is provided, the policy is deemed terminated for purposes of this chapter on and after that date, unless that policy has been previously canceled or superseded. Ten days before the specified expiration date, the company shall send to the Secretary of State a notice of termination by expiration of the policy.

When an expiration date is not specified on the certificate, the policy continues until canceled or superseded in accordance with section 1605, subsection 5.