ME Concludes 2010 Legislative Session

Augusta, ME - The Maine Legislature adjourned sine die on Monday, April 12, completing the second year of its two year legislative cycle.  Though property-casualty insurance was not a top priority on the legislative agenda this session, the Legislature addressed a number of peripheral issues with implications for the property-casualty insurance industry, according to the American Insurance Association (AIA).

“From a property-casualty insurance standpoint, Maine was relatively quiet this year,” said John Murphy, AIA Northeast regional vice president.  “That said, we were pleased with the legislative decisions that impact our industry,” he added.

In particular, AIA praised the Legislature for enacting LD 1562, an Act to Amend the Motor Vehicle Laws.  The final legislation includes a provision that that clarifies the proof of responsibility requirements for non-residents.  Previously, automobile insurance policies of non-residents would not be recognized by Maine unless the insurer were authorized to underwrite policies in the state.  Now a policy issued by a carrier that is authorized to write auto insurance in the driver's home state will satisfy Maine's financial responsibility law.

“Clearly this fix was needed to avoid potential problems for out of state residents driving in Maine,” said Murphy of LD 1562.  “Drivers with valid insurance policies need to know their policies are valid across state boundaries, even if their carrier doesn't do business there.”

In LD 1256, or an Act to Provide Protections for Consumers Subject to Mandatory Arbitration Clauses, the Legislature specifically exempted insurance from consumer arbitration agreements. 

“We were pleased that Maine legislators correctly recognized that property-casualty insurance should be exempt from contracts that are subject to this legislation, as our policies are already subject to regulation by the Bureau of Insurance and contain ample consumer protections,” said Murphy.

With the enactment of LD 1830, the Legislature clarifies that the effective dates for implementation of last year's sales tax legislation if the People's Veto fails to repeal the measure in the June 8th election.  Under LD 1830, all of the effective dates in the original bill will be extended by one year.

“We're encouraged by the Legislature's foresight to address what the effective dates will be if last year's sales tax law is not repealed,” Murphy said.  “This action will preemptively prevent any confusion and problems with compliance,” he added.

Also of importance this session, were several workers compensation bills dealing with properly classifying workers.  LD 1815, Act to Clarify the Construction Subcontractor Status of the Maine Workers' Compensation Act of 1992, clarifies the process for predetermination of "independent contractor" status for subcontractors on construction sites.  LD 1565, An Act to Amend the Laws Governing the Misclassification of Construction Workers, allows the Workers' Compensation Board to issue a stop work order if an employer knowingly misclassifies a construction worker.

“Properly classifying a worker's status is an important measure to ensure that workers are appropriately covered when they need to file a workers' compensation claim, and that insurers are collecting the right premium for the risks they are assuming,” said Murphy. 

Finally, AIA supported the Legislature's approval of LD 1639, an Act to Stimulate the Maine Economy and Promote the Development of Maine's Priority Transportation Infrastructure Needs, as it pertains to public-private partnership infrastructure projects.  “AIA worked with lawmakers to ensure that public-private partnerships are subject to the same requirements with respect to surety bonds as public works projects.  This was an important issue for AIA members that operate in Maine, and we were pleased that legislators recognized the importance of consistency across infrastructure projects,” concluded Murphy.

The American Insurance Association (AIA) is the leading property-casualty insurance trade organization, representing approximately 300 insurers that write more than $117 billion in premiums each year. AIA member companies offer all types of property - casualty insurance, including personal and commercial auto insurance, commercial property and liability coverage for small businesses, workers' compensation, homeowners' insurance, medical malpractice coverage, and product liability insurance.

Source: American Insurance Association

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