Sec. 1. 24-A MRSA §2739, as enacted by PL 1969, c. 132, §1, is repealed and the following enacted in its place:

§2739. Lapse of policy, advance notice; limitation of action

An individual policy of health insurance issued or delivered in this State, except a policy that by its terms is renewable or continuable with the insurer's consent, or except a policy the premiums for which are payable monthly or at shorter intervals, may not terminate or lapse for nonpayment of any premium until the expiration of 3 months from the due date of that premium unless the insurer, within not less than 10 nor more than 45 days prior to the due date, has mailed by certified mail, return receipt requested, to the insured at the insured's last address shown by the insurer's records a notice showing the amount of the premium and its due date.__If a notice is not sent, the insured may pay the premium in default at any time within the period of 3 months.__The affidavit of any officer, clerk or agent of the insurer, or of any other person authorized to mail the notice, that the notice required by this section has been duly mailed by the insurer in the manner required is prima facie evidence that the notice was duly given.__Action may not be maintained on any policy to which this section applies and that has lapsed for nonpayment of any premium unless the action is commenced within 2 years from the due date of the premium.

Sec. 2. 24-A MRSA §2809-A, sub-§1-A, as amended by PL 2003, c. 428, Pt. B, §2, is further amended to read:

1-A. Notification of cancellation. An insurer may not cancel or refuse to renew any policy for hospital, surgical, dental or major medical expense insurance until the insurer has provided by first class certified mail, return receipt requested at least 10 days' prior notification according to this section. The notice must include the date of cancellation of coverage and, if applicable, the time period for exercising policy conversion rights. The notice also must include an explanation of any applicable grace period. Notification is not required when the insurer has received written notice from the group policyholder that replacement coverage has been obtained.

A. Notice must be mailed to the group policyholder or subgroup sponsor.

B-1. At the time of notification under paragraph A, notice must be mailed to the certificate holder at the last address provided to the insurer by the subgroup sponsor, the group policyholder or the certificate holder. If the insurer does