CHAPTER 478
S.P. 268 - L.D. 915
An Act to Amend the Maine Insurance Guaranty Association Act
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 24-A MRSA §4433, sub-§2, ¶C, as amended by PL 1987, c. 707, §4, is further amended to read:
C. Credit insurance, vendors single-interest insurance, collateral protection insurance or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;
Sec. 2. 24-A MRSA §4433, sub-§2, ¶F, as amended by PL 1989, c. 67, §1, is further amended to read:
F. Financial guaranty insurance or other forms of insurance offering protection against investment risks; and
Sec. 3. 24-A MRSA §4433, sub-§2, ¶G, as amended by PL 1991, c. 885, Pt. E, §32 and affected by §47, is further amended to read:
G. Contracts of workers' compensation excess insurance issued to workers' compensation self-insurers approved under former Title 39, section 23 or under Title 39-A, section 403 by any insurer after the effective date of this paragraph, or in the case of a contract that automatically re-news, not later than one year after the effective date of this paragraph.;
Sec. 4. 24-A MRSA §4433, sub-§2, ¶¶H to K are enacted to read:
H. Life, annuity, health or disability insurance;
I. Insurance of warranties or service contracts, including insurance that provides for the repair, replacement or service of goods or property, or indemnification of repair, replacement or service; for the operational or structural failure of the goods or property due to a defect in materials, workmanship or normal wear and tear; or for reimbursement for the liability incurred by the issuer of agreements or service contracts that provide such benefits;
J. A transaction or combination of transactions between a person, including affiliates of that person, and an insurer, including affiliates of that insurer, that involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk; and
K. Insurance provided by or guaranteed by a governmental entity.
Sec. 5. 24-A MRSA §4435, sub-§4, as amended by PL 1995, c. 289, §12, is further amended to read:
4. Covered claim. "Covered claim" means an unpaid claim, including one for unearned premiums but excluding one for punitive damages, arising under and within the coverage and applicable limits of a policy of a kind of insurance referred to in section 4433 to which this subchapter applies issued by an insurer that becomes an insolvent insurer after May 9, 1970, and where:
A. The claimant or insured is a resident of this State at the time of the insured event; or
B. The property from which the claim arises is permanently located in this State.
"Covered claim" does not include any amount due any insurer, reinsurer, affiliate, insurance pool or underwriting association, as subrogation recoveries or otherwise, except that any payment made to the workers' compensation residual market pool pursuant to section 4438, subsection 1, paragraph A-1 must be included as a covered claim. "Covered claim" does not include any first-party claims by an insured whose net worth exceeds $25,000,000 on December 31st of the year prior to the year in which the member insurer becomes an insolvent insurer. An insured's net worth on that date is deemed to include the aggregate net worth of the insured and all its subsidiaries as calculated on a consolidated basis.
Sec. 6. 24-A MRSA §4435, sub-§5, as amended by PL 1995, c. 289, §13, is further amended to read:
5. Insolvent insurer. "Insolvent insurer" means an a member insurer:
A. Authorized to transact insurance in this State either at the time the policy was issued or when the insured event occurred; and
B. Determined to be insolvent Against whom a final order of liquidation has been entered with a finding of insolvency by a court of competent jurisdiction.
Effective July 1, 1995, the workers' compensation residual market pool, as created by the Bureau of Insurance Rules, Chapter 440, is deemed an insolvent insurer.
Sec. 7. 24-A MRSA §4435, sub-§9-A is enacted to read:
9-A. Person. "Person" means an individual or legal entity, including a governmental entity.
Sec. 8. 24-A MRSA §4438, sub-§1, ¶A, as amended by PL 1989, c. 751, §4, is further amended to read:
A. Be obligated to pay covered claims existing prior to the determination of the insolvency or arising within 30 days after the determination of insolvency, or before the policy expiration date if less than 30 days after the determination of insolvency, or before the insured replaces the policy or causes its cancellation, if within 30 days of the determination. The obligation shall must be satisfied by paying to the claimant an amount as follows:
(1) Except as provided in this paragraph, the full amount of a covered claim for benefits or unearned premium under workers' compensation insurance coverage;
(2) An amount not exceeding $100,000 $25,000 per policy for a covered claim for the return of an unearned premium; or
(3) An amount not exceeding $300,000 per claim for all other covered claims.
In no event is the association obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. The association shall pay only that amount of unearned premium in excess of $50. Notwithstanding any other provisions of this subchapter, a covered claim shall does not include any claim filed with the association after the earlier of 24 months after the date of the order of liquidation or the final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer. The association, in its discretion, may accept a late filed claim as a covered claim when the claimant demonstrates good cause. The demonstration of good cause by a claimant includes showing that the existence of the claim was not known to the claimant prior to the bar date and that the claimant filed the claim within 60 days of learning of the claim;
Sec. 9. 24-A MRSA §4438, sub-§2, ¶C, as enacted by PL 1969, c. 561, is amended to read:
C. Sue or be sued and may intervene as a party before any court in this State that has jurisdiction over an insolvent insurer as defined by this subchapter;
Sec. 10. 24-A MRSA §4441, sub-§2, ¶A, as enacted by PL 1969, c. 561, is amended to read:
A. Require that the association notify the insureds of the insolvent insurer and any other interested parties of the determination order of liquidation with a finding of insolvency and of their rights under this subchapter. Such notifications shall must be by mail at their last known addresses, where available, but if required information for notification by mail is not available, notice by publication in a newspaper of general circulation in this State shall be is sufficient. Any notification given under this paragraph must prominently display the date by which all claims must be filed with the association.
Sec. 11. Application. This Act applies to the obligations of the Maine Insurance Guaranty Association, established pursuant to the Maine Revised Statutes, Title 24-A, section 4436, under policies of insolvent insurers as these obligations exist on or after the effective date of this Act, except that the first-party exclusion contained in Title 24-A, section 4435, subsection 4; the unearned premium cap and the bar date contained in Title 24-A, section 4438, subsection 1, paragraph A; and the right of intervention contained in Title 24-A, section 4438, subsection 2, paragraph C apply only to new insolvencies occurring on or after the effective date of this Act.
Effective July 25, 2002, unless otherwise indicated.
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