Sec. 1. 24-A MRSA §2385-F, as enacted by PL 1995, c. 398, §1, is amended to read:

§2385-F. Coverage denial

Workers' compensation coverage may not be issued to an employer or continued if it has been issued until the employer pays any undisputed premiums or assessments to a previous workers' compensation insurer, including a domestic mutual insurer established pursuant to section 3703, a group self- insurer approved pursuant to Title 39-A, section 403, subsection 4, or the workers' compensation residual market mechanism. If a premium or assessment is subject to a good faith dispute at the time of termination of a policy or if such a dispute becomes known as a result of a post-termination audit review or other reason after replacement coverage has been issued and if the premium or assessment remains unpaid upon resolution of the dispute by the bureau, this replacement coverage must be cancelled.

SUMMARY

This bill provides that workers' compensation insurance coverage issued to an employer may not be continued unless the employer pays any undisputed premiums or assessments to a previous workers' compensation insurer. If a premium or assessment is subject to a good faith dispute at the time of termination of a policy or if such a dispute becomes known as a result of a post-termination audit review or other reason after replacement coverage has been issued and if the premium or assessment remains unpaid upon resolution of the dispute by the Bureau of Insurance, this replacement coverage must be cancelled. Current law requires that a new policy not be issued if an undisputed premium is owed to a prior carrier.