An Act To Implement the Requirements of the Federal Nonadmitted and Reinsurance Reform Act of 2010
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the federal Nonadmitted and Reinsurance Reform Act of 2010, Title V, Subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, which takes effect July 21, 2011, was enacted after the adjournment of the Second Regular Session of the 124th Legislature and requires states to revise their eligibility standards for surplus lines insurance and directs states to adopt a multistate premium tax allocation system before June 16, 2011; and
Whereas, the implementation dates imposed by federal law are less than 90 days after the anticipated adjournment of the Legislature; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Sec. 1. 24-A MRSA §2001-A is enacted to read:
§ 2001-A. Scope
This chapter applies exclusively to transactions when this State is the home state of the applicant or insured. Nothing in this chapter applies to the sale, solicitation, negotiation, placement or writing of contracts of insurance for any applicant or insured whose home state is in a jurisdiction other than in this State.
Sec. 2. 24-A MRSA §2002-A, sub-§3, as amended by PL 1997, c. 592, §48, is further amended to read:
(1) The producer has disclosed to the exempt commercial purchaser that such insurance may or may not be available from the admitted market that provides greater protection with more regulatory oversight; and
(2) The exempt commercial purchaser has subsequently requested in writing for the producer to procure or place such insurance from a nonadmitted insurer.
Sec. 3. 24-A MRSA §2003, as amended by PL 1997, c. 592, §49, is further amended to read:
§ 2003. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
(1) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or
(2) If 100% of the insured risk is located out of the state referred to in subparagraph 1, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated; or
Sec. 4. 24-A MRSA §2007, as amended by PL 1997, c. 592, §54, is further amended to read:
§ 2007. Eligible surplus lines insurers
(1) The minimum capital and surplus that would be required if the insurer were licensed in this State; and
Sec. 5. 24-A MRSA §2016, sub-§2, as enacted by PL 1991, c. 674, §1, is repealed.
Sec. 6. 24-A MRSA §2101, sub-§2, ¶E, as amended by PL 1973, c. 625, §141, is further amended to read:
Sec. 7. 24-A MRSA §2101, sub-§2, ¶F is enacted to read:
Sec. 8. 24-A MRSA §2113, as corrected by RR 2001, c. 2, Pt. A, §39, is repealed.
Sec. 9. 36 MRSA §191, sub-§2, ¶PP, as corrected by RR 2009, c. 2, §107, is amended to read:
Sec. 10. 36 MRSA §191, sub-§2, ¶QQ, as reallocated by RR 2009, c. 2, §108, is amended to read:
Sec. 11. 36 MRSA §191, sub-§2, ¶RR is enacted to read:
Sec. 12. 36 MRSA §2513, first ¶, as amended by PL 2009, c. 625, §9, is further amended to read:
Every insurance company or association that does business or collects premiums or assessments including annuity considerations in the State, including surety companies and companies engaged in the business of credit insurance or title insurance, shall, for the privilege of doing business in this State and in addition to any other taxes imposed for that privilege, pay a tax upon all gross direct premiums including annuity considerations, whether in cash or otherwise, on contracts written on risks located or resident in the State for insurance of life, annuity, fire, casualty and other risks at the rate of 2% a year. Every surplus lines nonadmitted insurer that does business or collects premiums in the State shall, for the privilege of doing business in this State and in addition to any other taxes imposed for that privilege, pay a tax upon all gross direct premiums, whether in cash or otherwise, on contracts written on risks located or resident in the State at the rate of 3% a year as provided in section 2531. The producer of those contracts must collect the tax and report and pay the tax to the State Tax Assessor as provided in section 2521-A, except that an insurance agency may elect to collect and pay the tax on surplus lines premiums on behalf of all of its employees who are surplus lines producers. For purposes of this section, the term "annuity considerations" includes amounts paid to an insurance company for the purchase of a contract that may result in an annuity, even if the annuitization never occurs or does not occur until some time in the future and the amounts are in the meantime applied to an investment vehicle other than an annuity. This section does not apply to mutual fire insurance companies subject to tax under section 2517 or to captive insurance companies formed or licensed under Title 24-A, chapter 83 or under the laws of another state.
Sec. 13. 36 MRSA §2519, as repealed and replaced by PL 1973, c. 727, §9, is amended to read:
§ 2519. Ratio of tax on foreign insurance companies
Any insurance company incorporated by a state of the United States or province of the Dominion of Canada whose laws impose upon insurance companies chartered by this State any greater tax than is herein provided shall pay the same tax upon business done by it in this State, in place of the tax provided in any other section of this Title. If it is not paid as provided in section 2521-A, the Superintendent of Insurance shall suspend the right of said company to do business in this State. Any insurance company incorporated by another country shall be is regarded for the purpose of this section as though incorporated by the state where it has elected to make its deposit and establish its principal agency in the United States. For nonadmitted insurance premiums subject to section 2531, the rate applied pursuant to this section must be the highest rate that the state or province applies to nonadmitted insurance premiums taxed in that state or province.
Sec. 14. 36 MRSA §2531 is enacted to read:
§ 2531. Taxation of nonadmitted insurance coverage
Sec. 15. 36 MRSA §2532 is enacted to read:
§ 2532. Authority to enter into multistate agreement
(1) Is in this State's financial best interest;
(2) Does not significantly increase administrative burden and cost to the State, surplus lines insurers and insureds; and
(3) Is consistent with the requirements of the federal Nonadmitted and Reinsurance Reform Act of 2010, Public Law 111-203.
Sec. 16. Effective date. This Act takes effect July 21, 2011, except that that section of this Act that enacts the Maine Revised Statutes, Title 36, section 2532 takes effect when approved.
Sec. 17. Application. This Act applies to taxes on all premiums received on or after July 1, 2011.
Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved, except as otherwise indicated.