Sec. 1. 24-A MRSA §2910-A, sub-§1, as enacted by PL 1997, c. 369, §2, is amended to read:

1. Policy requirements. A casualty insurance policy subject to this chapter may not provide for subrogation or priority over the insured of payment for any hospital, nursing, medical or surgical services or of any expenses paid or reimbursed under the medical payments coverage in the policy in the event the insured is entitled to receive payment or reimbursement from any other person as a result of legal action or claim, except as provided in this section.

The coverage may contain a provision that allows the payments if that provision is approved by the superintendent and if that provision required the prior written approval of the insured and provides that the insurer's subrogation right is subject to subtraction to account for the pro rata share of the insured's attorney's fees incurred in obtaining the recovery from another source.

The coverage may contain a provision that allows the payments if:

A.__That provision is approved by the superintendent;

B.__That provision requires the prior written approval of the insured after notice to the insured;

C.__Approval of the insured is obtained within 30 days prior to any action by the insurer to recover medical payments from any source other than through the insured's action for recovery; and

D.__That provision provides that the insurer's subrogation right is subject to subtraction to account for the pro rata share of the insured's attorney's fees incurred in obtaining the recovery from another source.

Sec. 2. 24-A MRSA §2910-A, sub-§3, as enacted by PL 1997, c. 369, §2, is amended to read:

3. Exception. Nothing in this section prevents an insurer from exercising its subrogation rights directly against any person legally responsible for the insured's injury. In the event that the insurer pursues its subrogation rights directly against such a person, the insurer's subrogation right is not subject to any subtraction to account for attorney's fees and the insurer is entitled to full recovery. This section does preclude an insurer from exercising its subrogation rights against the