B.__Is unreasonably contesting claims that are within the association's statutory payment obligations; and

C.__Has complied with reporting requirements established pursuant to subsection 2.

2.__Annual reporting requirement.__Subject to the applicable requirements of the Maine Administrative Procedure Act, the superintendent shall establish by rule an annual reporting requirement for the association with respect to the association's payment of workers' compensation claims and the termination of payments.

3.__Cooperation.__The association shall cooperate fully with the board and provide the information required by the rules established by the superintendent.

4.__Confidentiality.__Audit working papers are confidential and may not be disclosed to any person outside of the board except the association.__For purposes of this subsection, "audit working papers" means all documentary and other information acquired, prepared or maintained by the board during the conduct of an audit of the association under this section, including all intra-agency and interagency communications relating to an audit and draft reports or any portion of a draft report.__The final draft report, including the underlying reconciled information, is not confidential.

5.__Opportunity for hearing.__Prior to issuing a final audit report under this section, the board shall provide the association an opportunity for a hearing, at which the association may respond to the board's findings.

6.__Regulatory penalty.__If as a result of an audit and subsequent hearing pursuant to subsection 5 the board determines that the association has engaged in a pattern of questionable claims-handling techniques or unreasonably contesting claims, the board shall certify its determination to the superintendent, who shall take appropriate action to halt that practice.__The superintendent has sole authority to impose any regulatory penalty.

7.__Rulemaking.__Rules adopted pursuant to this section are