CHAPTER 42

S.P. 132 - L.D. 408

An Act Limiting Recovery of Disability Benefits Subject to

Offsets

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 24-A MRSA §2717-A, as enacted by PL 2003, c. 321, §1, is repealed and the following enacted in its place:

§2717-A.__Disability benefit offsets

1. Disclosure to applicants. At or before the time of application for any policy subject to this chapter that provides disability income benefits, the insurer shall provide the applicant with a clear and conspicuous written notice, on the application form or in a separate document, that accurately explains to the applicant all types of other sources of income that may result in a reduction of the benefits payable under the policy.

2. Recovery of disability benefit overpayments.__For claims filed after January 1, 2006, an insurer that is entitled to reduce disability income benefit payments when the insured receives income from other sources and that is entitled to recover overpayments through offsets against current payments to the insured may not recover such overpayments at a rate greater than 20% of the net benefit per benefit payment period unless:

A.__For policies applied for after September 13, 2003, the insurer has complied with the requirements of subsection 1;