HP0136
LD 157
Signed on 2009-03-23 - First Regular Session - 124th Legislature - Text: MS-Word, RTF or PDF LR 512
Item 1
Bill Tracking Chamber Status

An Act To Enhance Oversight of Fraternal Benefit Societies

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 24-A MRSA §12-A, sub-§4,  as enacted by PL 1989, c. 269, §3, is amended to read:

4. Refunds of overcharges.   In the event that any insurer, fraternal benefit society, nonprofit hospital service plan, nonprofit medical service plan, nonprofit health care plan, health maintenance organization or preferred provider organization makes charges to any person which that are not in conformity with a filing which that it is required to submit for approval or disapproval by this Title or Title 24, the superintendent may order that refunds of any overcharges be made.

Sec. 2. 24-A MRSA §2186, sub-§1, ¶B,  as amended by PL 1999, c. 5, §1 and affected by §2, is further amended to read:

B. "Insurer" means an authorized insurance company, fraternal benefit society, reinsurer, surplus lines insurer, unauthorized insurer, nonprofit hospital and medical service organization, health maintenance organization, risk retention group or multiple employer welfare organization. "Insurer" also includes an insurance producer or other person acting on the behalf of an insurer. For the purposes of this section, "insurer" also means the state Medicaid program.

Sec. 3. 24-A MRSA §4126, sub-§6  is enacted to read:

6   Nothing in this section may be construed as limiting the superintendent's authority to take enforcement action under section 12-A in connection with violations of applicable provisions of this Title.

Sec. 4. 24-A MRSA §4127,  as amended by PL 1977, c. 694, §432 and PL 1999, c. 547, Pt. B, §78 and affected by §80, is repealed.

Sec. 5. 24-A MRSA §4127-A  is enacted to read:

§ 4127-A Suspension, revocation or refusal of license of foreign or alien society

The superintendent may suspend, revoke or refuse the license of a foreign or alien society transacting or applying to transact business in this State as set out in this section.

1 Investigation.   If, upon investigation, the superintendent finds that a foreign or alien society transacting or applying to transact business in this State has exceeded its powers, has failed to comply with any of the provisions of this chapter, is not fulfilling its contracts in good faith or is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public, the superintendent shall notify the society of the deficiency or deficiencies and state in writing the reasons that warrant suspension, revocation or refusal of the society's license. The notice must require that the deficiency or deficiencies be corrected.

After receipt of the notice, the society has 30 days to comply with the superintendent's request for correction, and if the society fails to comply, the superintendent shall notify the society of the findings of noncompliance and require the society to show cause, on a date set by the superintendent, why its license should not be suspended, revoked or refused. If on that date the society does not present good and sufficient reason why its authority to do business in this State should not be suspended, revoked or refused, the superintendent may suspend or refuse the license of the society to do business in this State until satisfactory evidence is furnished to the superintendent that the suspension or refusal should be withdrawn or the superintendent may revoke the authority of the society to do business in this State.

2 Continue contracts.   Nothing in this section may be construed as preventing any foreign or alien society from continuing in good faith all contracts made in this State during the time the society was legally authorized to transact business in this State.
3 Enforcement action.   Nothing in this section may be construed as limiting the superintendent's authority to take enforcement action under section 12-A in connection with violations of applicable provisions of this Title.

Sec. 6. 24-A MRSA §4138,  as amended by PL 2001, c. 421, Pt. B, §§91 and 92 and affected by Pt. C, §1, is repealed.

Sec. 7. 24-A MRSA §4138-A  is enacted to read:

§ 4138-A Enforcement; unfair methods of competition and unfair and deceptive acts and practices

A society authorized to do business in this State is subject to the provisions of section 12-A and chapter 23. Nothing in such provisions may be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership or as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society or the offering of benefits only to its members.

Sec. 8. 24-A MRSA §4139,  as enacted by PL 1969, c. 132, §1, is repealed.

summary

This bill gives the Superintendent of Insurance similar administrative and enforcement authority over fraternal benefit societies as the superintendent currently has relating to nonfraternal entities such as insurers and multiple employer welfare arrangements. The superintendent's current authority is significantly restricted and inadequate to ensure compliance with Maine law by such entities authorized to operate in Maine. The bill also amends the definition of "insurer" to include fraternal benefit societies. In addition, the bill brings Maine law more up to date with the regulation of fraternal benefit societies in other states.


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