CHAPTER 81
H.P. 815 - L.D. 1103
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 24-A MRSA �6451, sub-��3 and 4, as enacted by PL 1993, c. 634, Pt. A, �1, are amended to read:
3. Domestic insurer. "Domestic insurer" means any life or health insurance company organized domiciled in this State.
4. Foreign insurer. "Foreign insurer" means any life or health insurance company that is authorized to do business in this State under section 404 but is not domiciled in this State.
Sec. 2. 24-A MRSA �6451, sub-�4-A is enacted to read:
4-A. Life or health insurer. "Life or health insurer" means any insurance company described in section 409, subsection 3 and authorized to do business in this State under section 410, or a licensed property and casualty insurer writing only accident and health insurance.
Sec. 3. 24-A MRSA �6451, sub-�6, as enacted by PL 1993, c. 634, Pt. A, �1, is amended to read:
6. Negative trend. "Negative trend" means, with respect to a life or health insurer, a negative trend over a period of time, as determined in accordance with the trend test calculation included in the risk-based capital instructions.
Sec. 4. 24-A MRSA �6451, sub-�6-A is enacted to read:
6-A. Property and casualty insurer. "Property and casualty insurer" means any insurance company authorized to do business in this State under section 410 except a life or health insurer or single line mortgage guaranty insurer, financial guaranty insurer or title insurer.
Sec. 5. 24-A MRSA �6452, sub-�2, as enacted by PL 1993, c. 634, Pt. A, �1, is amended to read:
2. Determination of a life or health insurer's risk-based capital. An A life or health insurer's risk-based capital must be determined in accordance with the formula set forth in the risk-based capital instructions. The formula must take into account, and may adjust for the covariance between, the following:
A. The risk with respect to the insurer's assets;
B. The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;
C. The interest rate risk with respect to the insurer's business; and
D. All other business risks and such other relevant risks as are set forth in the risk-based capital instructions, determined in each case by applying the factors in the manner set forth in the risk-based capital instructions.
Sec. 6. 24-A MRSA �6452, sub-�4 is enacted to read:
4. Determination of a property and casualty insurer's risk-based capital. A property and casualty insurer's risk-based capital is determined in accordance with the formula set forth in the risk-based capital instructions. The formula must take into account and may adjust for the covariance between the following:
A. Asset risk;
B. Credit risk;
C. Underwriting risk; and
D. All other business risks and such other relevant risks as are set forth in the risk-based capital instructions, determined in each case by applying the factors set forth in the risk-based capital instructions.
Sec. 7. 24-A MRSA �6453, sub-�1, �A, as enacted by PL 1993, c. 634, Pt. A, �1, is amended to read:
A. The filing of a risk-based capital report by an insurer that indicates that:
(1) The insurer's total adjusted capital is greater than or equal to its regulatory action level risk-based capital but less than its company action level risk-based capital; or
(2) The A life or health insurer has total adjusted capital that is greater than or equal to its company action level risk-based capital but less than the product of its authorized control level risk-based capital and 2.5 and has a negative trend;
Sec. 8. 24-A MRSA �6456, sub-�2, as enacted by PL 1993, c. 634, Pt. A, �1, is amended to read:
2. Superintendent duties; mandatory control level event. When a mandatory control level event occurs, the superintendent shall take those actions that are necessary to cause the insurer to be placed under regulatory control under chapter 57. If the superintendent takes those actions, the mandatory control level event is deemed sufficient grounds for the superintendent to take action under chapter 57, and the superintendent has the rights, powers and duties with respect to the insurer as are set forth in chapter 57. If the superintendent takes actions pursuant to an adjusted risk-based capital report, the insurer is entitled to those protections that are afforded to insurers under the provisions of chapter 57, subchapter II pertaining to summary proceedings. Notwithstanding any provision of this section to the contrary, the superintendent may forego action for up to 90 days after the mandatory control level event if the superintendent finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period, or, in the case of a property and casualty insurer that is not authorized to write new business, the superintendent may allow the insurer to continue to run off its existing business under the superintendent's supervision.
Sec. 9. 24-A MRSA �6459, as enacted by PL 1993, c. 634, Pt. A, �1, is repealed and the following enacted in its place:
�6459. Supplemental provisions
1. Existing authority supplemented. The provisions of this chapter are supplemental to any other provisions of the laws of this State and do not preclude or limit any other powers or duties of the superintendent under those laws, including, but not limited to, sections 417, 3423 and 3424 and chapter 57.
2. Rules. The superintendent may adopt rules to carry out the purposes of this chapter. Rules adopted pursuant to this chapter are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
3. Exemptions. The superintendent may exempt from the application of this chapter any domestic property and casualty insurer that:
A. Writes business only in the State;
B. Writes direct annual premium of $2,000,000 or less; and
C. Assumes no reinsurance in excess of 5% of direct premium written.
See title page for effective date.
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