Sec. 1. 24-A MRSA §3701, as amended by PL 1997, c. 661, §1, is further amended to read:

§3701. Purpose

The Maine Employers' Mutual Insurance Company is established for the purposes of providing workers' compensation insurance and employers' liability insurance incidental to and written in connection with workers' compensation coverage to employers of this State at the highest level of service and savings consistent with reasonable applicable actuarial standards and the sound financial integrity of the company. It is also the purpose of the company to encourage employer involvement and to be responsive to each division's employer experience, and advice, practice and operating effectiveness.

Sec. 2. 24-A MRSA §3702, sub-§3, as amended by PL 1997, c. 661, §2, is repealed.

Sec. 3. 24-A MRSA §3710, as amended by PL 1997, c. 661, §9, is further amended to read:

§3710. Funding; surplus

2. Ongoing funding. The company:

A. Shall collect from each applicant an advance premium of 25% of the estimated annual premium and shall bill subsequent premiums with advance notice to insureds to ensure that, if periodic premiums are not paid by insureds in a timely manner, adequate time is available to give proper notice of cancellation prior to a previously collected premium being fully earned;

B. May assess its policyholders for additional funds to meet operating needs or as required by law; and

C. May provide premium payment plans and premium financing programs providing payment terms other than those specified in paragraph A. Until the company has obtained the surplus otherwise required under this Title for casualty insurance companies, the company must receive approval from the superintendent before implementing these programs.

3. Transition surplus, premium levels. Notwithstanding other provisions of this Title, the company is permitted to operate for a period of up to 10 years with a level of surplus less than that otherwise required for a mutual insurer authorized to write casualty insurance if the following conditions are met.