§ 39-A §403 — Insurance by assenting employer; requirements as to self-insurers

An employer subject to this Act shall secure compensation and other benefits to the employer's employees in one or more of the ways described in this section. The failure of any employer subject to this Act to procure insurance coverage for the payment of compensation and other benefits to the employer's employees in one of the ways described in this section constitutes failure to secure payment of compensation provided for by this Act within the meaning of section 324, subsection 3 and subjects the employer to the penalties prescribed by that section.
1.
Insuring under workers' compensation insurance policy.
The employer may comply with this section by insuring and keeping insured the payment of such compensation and other benefits under a workers' compensation insurance policy. The insurance company shall file with the board notice, in the form required by the board, of the issuance of any workers' compensation policy to an employer. The insurance may not be cancelled within the time limited in such policy for its expiration until at least 30 days after the insurance company mails to the board and to the employer a notice of the cancellation of the insurance. In the event that the employer has obtained a workers' compensation policy from another insurance company, or has otherwise secured compensation as provided in this section, and such insurance or other security becomes effective prior to the expiration of the 30-day notice period, cancellation takes effect on the effective date of the other insurance or on receipt of security.
2.
Pilot projects.
3.
Proof of solvency and financial ability to pay; trust.
The employer may comply with this section by furnishing satisfactory proof to the Superintendent of Insurance of solvency and financial ability to pay the compensation and benefits, and depositing cash, satisfactory securities, irrevocable standby letters of credit issued by a qualified financial institution or a surety bond with the superintendent, in such sum as the superintendent may determine pursuant to subsection 8, the Treasurer of State to be listed as beneficiary of the bond or the irrevocable standby letter of credit and the bond or the irrevocable standby letter of credit to be conditional upon the faithful performance of this Act relating to the payment of compensation and benefits to any injured employee. In case of cash or securities being deposited, or drawn on a surety bond or letter of credit, the cash or securities must be placed in an account at interest by the Treasurer of State, and the accumulation of interest on the cash or securities so deposited must be credited to the account and may not be paid to the employer to the extent that the interest is required to secure the employer's self-insurance obligations, including the amount needed to support any present value discounting in the determination of the amount of the deposit. Any security deposit must be held by the Treasurer of State in trust for the benefit of the self-insurer's employees for the purposes of making payments under this Act. If the superintendent determines that the self-insurer has experienced a deterioration in financial condition that adversely affects the self-insurer's ability to pay obligations under this Act, the security amount may be in excess of the minimum amount required by this Title.
4.
Group self-insurers; application.
Except for the provision relating to individual public employer self-insurers, subsection 3 is equally applicable in all respects to group self-insurers. Any employer or group of employers desiring to become a self-insurer shall submit to the Superintendent of Insurance with an application for self-insurance, in a form prescribed by the superintendent, the following:
4-A.
Group self-insurance reinsurance account.
As an alternative to obtaining a reinsurance contract providing coverage against losses arising out of one occurrence, an individual or group self-insurer authorized under this section may, with the approval of the Superintendent of Insurance, participate in a group self-insurance reinsurance account, referred to in this subsection as "an account," as provided in this subsection. A group self-insurer authorized under the laws of another state may participate in an account through a protected cell arrangement as provided in paragraph L. More than one account may be established pursuant to this subsection. An account established pursuant to this subsection may be established as either an independent private entity or an instrumentality of the State, but the debts and liabilities of an account established as an instrumentality of the State are not debts and liabilities of the State. An account established as an instrumentality of the State within 24 months of its formation, with the approval of the Superintendent of Insurance, may transfer all of its assets and liabilities into an account established as an independent private entity.
4-B.
Group self-insurance reinsurance fronting arrangements.
4-C.
Continuation of authority to administer and handle claims; group self-insurer; fronting arrangement.
5.
Group self-insurance; participation.
Participation in a group self-insurance plan is governed by the following provisions.
6.
Annual renewal; actuarial evaluation.
Renewal and actuarial evaluation are governed by this subsection.
7.
Self-insurance.
"Self-insurance," as used in this section, means the system of securing compensation as provided in subsections 3 to 16.
8.
Security deposit and reinsurance requirements for individual self-insurers.
The following security deposit and reinsurance requirements apply to individual self-insurers.
9.
Acceptable deposit funds or investments for trust funds.
The following requirements apply to assets deposited or held in trust as security for an individual or group self-insurer under this section.
10.
Form of reinsurance contracts.
All reinsurance contracts issued or renewed after the effective date of this subsection must be issued by companies that meet the requirements of subsection 11 and must name the Maine Self-Insurance Guarantee Association as an additional insured. These reinsurance contracts must recognize the Maine Self-Insurance Guarantee Association's rights of recovery, within the terms of coverage provided by the contract, for payments made by the association to or on behalf of claimants regarding covered claims and for claims in the course of settlement, the value of which when reduced to payments will create an obligation on the part of the reinsurance carrier to reimburse the association to the extent of funds disbursed by the association to discharge covered claims. The requirements of this subsection apply to any reinsurance contract issued to any individual or group self-insurer as part of a self-insurance program approved for use within this State and are in addition to any other requirement applicable to reinsurance contracts imposed by law or rule.
11.
Qualifications for reinsurance carriers.
A workers' compensation contract or policy issued after January 1, 1993 may not be recognized by the Superintendent of Insurance in considering the ability of an individual or group self-insurer to fulfill its financial obligations under this Act, unless the contract or policy is issued by an admitted insurance company or a reinsurance company that meets on a continuous basis the requirements of Title 24‑A, chapter 9, subchapter 3 and the reinsurance company has been approved by the superintendent to issue in this State contracts of primary workers' compensation reinsurance, or by Lloyd's of London, a formally organized association of incorporated underwriters and individual unincorporated underwriters, any one or more of which underwrite and assume as insurer a portion of the risk insured by them as set forth in the contract of insurance. Each contract of primary workers' compensation reinsurance that is proposed for use in this State must be filed for approval in the manner set out in Title 24‑A, section 2412. To the extent practicable, a contract so approved may be modified with less than 30 days advance filing notice if the superintendent determines the modifications suggested are not contrary to provisions of Title 24‑A, section 2412, this Title or Bureau of Insurance Rule Chapter 250 and are necessary to effect required reinsurance coverage to authorize the self-insurer to operate a plan of workers' compensation self-insurance.
12.
Qualifications for claims personnel.
Persons who investigate, settle or negotiate the settlement of claims on behalf of self-insurers or employees of self-insurers are required to be licensed as insurance adjusters pursuant to Title 24‑A, chapter 16.
13.
Revocation or termination of self-insurance privilege.
The following may constitute grounds for denial of the right of any individual or group to continue the option of self-insurance:
14.
Reportable events; termination of self-insurance authority; application for continuing self-insurance authority and nonrenewal or revocation order.
A self-insurer must report the occurrence of events as required by this subsection. An employer may elect to voluntarily terminate its authority to self-insure at any time or may make application for continuing authority to self-insure subject to the requirements of this subsection and any rules adopted by the Superintendent of Insurance. The superintendent may make a determination that an employer's authority to self-insure has terminated in accordance with this subsection and any rules adopted by the superintendent or may grant approval of an application for continuing self-insurance authority. For the purposes of this subsection, "employer" includes a successor employer assuming all workers' compensation liabilities of an approved self-insured employer as a result of the occurrence of one of the events in paragraph A.
15.
Confidentiality of information.
All written, printed or graphic matter or any mechanical or electronic data compilation from which information can be obtained, directly or after translation into a form susceptible of visual or aural comprehension, all information contained in the minutes of trustee meetings and all information relating to individual compensation cases, that a self-insurer is required to file with or make available to the superintendent under this section, section 404 or rules adopted pursuant to it are confidential and are not public records.
16.
Registration of self-insurers.
Registration of self-insurers is governed as follows.
17.
Report required.
In order to comply with Title 26, section 61, subsection 1‑A, on or before March 1st of each year, every individual workers' compensation self-insurer and workers' compensation group self-insurer shall file a report with the superintendent showing the amount of total actual paid workers' compensation losses and the total actual paid workers' compensation medical payments for the previous calendar year.
18.
Prohibition against using funds for political contributions.
Once deposited into a trust fund created to comply with the requirements of this section, funds and assets may not be withdrawn for the purpose of making a contribution to a political candidate or political action committee required to file a report under Title 21‑A, chapter 13, subchapter 2 or 4.

Legislative History

PL 1991, c. 885, §A8 (NEW). PL 1991, c. 885, §§A9-11 (AFF). RR 1993, c. 1, §141 (COR). PL 1993, c. 349, §73 (AMD). PL 1993, c. 491, §1 (AMD). PL 1993, c. 510, §§1,2 (AMD). PL 1995, c. 36, §1 (AMD). PL 1995, c. 150, §1 (AMD). PL 1995, c. 277, §1 (AMD). PL 1995, c. 398, §§2-4 (AMD). PL 1995, c. 560, §G27 (AMD). PL 1995, c. 594, §§2-6 (AMD). PL 1995, c. 619, §7 (AMD). PL 1997, c. 126, §§7-9 (AMD). PL 1997, c. 457, §54 (AMD). PL 1999, c. 113, §30 (AMD). PL 1999, c. 790, §A53 (AMD). PL 2001, c. 44, §14 (AFF). PL 2001, c. 48, §§1,11 (AMD). PL 2001, c. 48, §§2,14 (AFF). PL 2001, c. 224, §1 (AMD). PL 2003, c. 38, §1 (AMD). PL 2003, c. 315, §§1,2 (AMD). PL 2003, c. 424, §§1,2 (AMD). PL 2003, c. 671, §§A11,12 (AMD). PL 2005, c. 98, §§1,2 (AMD). PL 2007, c. 75, §1 (AMD). PL 2009, c. 232, §2 (AMD). PL 2011, c. 98, §1 (AMD). PL 2011, c. 180, §§1, 2 (AMD). PL 2013, c. 172, §§1, 2 (AMD). PL 2015, c. 59, §1 (AMD). PL 2017, c. 401, §§1-6 (AMD). PL 2023, c. 393, §§1, 2 (AMD). PL 2025, c. 1, §§1, 2 (AMD). PL 2025, c. 53, §§1-12 (AMD).