Sec. 1. 24-A MRSA §2164-D, sub-§9, as enacted by PL 1997, c. 634, Pt. A, §1, is amended to read:

9. Applicability. This section does not apply to claims involving workers' compensation, medical malpractice, fidelity, suretyship or boiler and machinery insurance.

Sec. 2. 24-A MRSA c. 26-A is enacted to read:

CHAPTER 26-A

WORKERS' COMPENSATION

MONITORING, AUDITING AND ENFORCEMENT

§2398.__Development of audit, enforcement and monitoring program

The superintendent shall establish an audit, enforcement and monitoring program to ensure that all obligations under Title 39- A are met.__The functions of the audit and enforcement program include, but are not limited to, auditing timeliness of payments and claims handling practices of insurers, self-insurers and 3rd- party administrators; determining whether insurers, self-insurers and 3rd-party administrators are unreasonably contesting claims; and ensuring that all reporting requirements are met.

§2398-A.__Auditing of claims

1.__Audits.__The superintendent shall audit claims records, including files held by insurers, self-insurers and 3rd-party administrators, on an ongoing basis to determine whether insurers, self-insured employers and 3rd-party administrators have met their obligations under Title 39-A and to identify disputes that arose, the reasons for disputes, the method and manner of their resolution, the costs incurred, the reasons for attorney involvement and the services rendered by the attorneys.

2.__Notice of assessment.__If, any as a result of an examination and after providing an opportunity for a hearing, the superintendent determines that any compensation, interest, penalty or other obligation is due and unpaid to an employee, dependent or service provider, the superintendent shall issue a notice of assessment detailing the amounts due and unpaid in each case and shall order the amounts paid to the unpaid party or parties.

3.__Penalty.__In addition to any other penalty permitted under law, the superintendent may assess civil penalties not to exceed $10,000 upon finding, after hearing, that an employer, insurer or 3rd-party administrator for an employer has engaged in