Sec. 1. 29-A MRSA §1602, sub-§§1-A and 3-A are enacted to read:

1-A.__Demand after cancellation or termination of policy.__On the 31st 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.

3-A.__Removal of registration plates.__If the former policyholder does not within 10 days after receipt of notice in subsection 1-A provide the Secretary of State with proof of financial responsibility under section 1605, the Secretary of State shall notify the local law enforcement agency to remove the registration plates from the uninsured motor vehicle and return the registration plates to the Secretary of State.__The Secretary of State shall retain the registration plates until the person provides proof of financial responsibility under section 1605.

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.

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terminated for purposes of this chapter on and after that date, unless that policy has been previously canceled or superseded.