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MaineLD 1195132nd Maine Legislature (2025-2026)SenateWALLET

An Act to Amend the Provisions of the Maine Workers' Compensation Act of 1992 Governing Requirements for Self-insurers

Sponsored By: Donna Bailey (Democratic)

Became Law

WORKERS COMPENSATIONWORKERS COMPENSATION - INSURANCE

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 0 benefits, 1 costs, 5 mixed.

Stricter trust funding and reviews

Self‑insurers using a trust must hold unencumbered assets equal to the present value of ultimate expected claims and settlement costs, plus safety margins; the Superintendent may also require admin costs. Year one funding stays at a 90% confidence level. After the first year, funding may drop to 75% with an actuarial review (at least 6 months after year‑end, or 4 months for groups with 36+ months) and prior approval for individual self‑insurers. Long‑standing trusts may fund all years in aggregate at 75% (5+ years for individuals) or 65% (10+ years for groups) with prior approval. The Superintendent can order higher funding within 60 days, trustees report quarterly, and a qualified actuary values the trust at least once a year.

Cost to leave a self-insured group

If a member leaves a group self‑insurer, the member must fund its share of the trust to a 95% confidence level. If the member does not pay, the trust must cover those liabilities. The Superintendent may count any unpaid share when approving the trust’s surplus or deficit.

How surplus is counted and paid out

When a group checks for surplus, only limited outside assets count: up to $10,000 cash; receivables actually collected and put in the trust by the payout date; interest collectible within 6 months; tangible assets convertible to cash before payout; and allowed letters of credit. Cash above $10,000 may count with proper documents. A group may declare surplus anytime but can pay it out only after a plan year ends. It must provide an actuarial review, audited statements, and a worksheet within 10 days after the payout. The Superintendent can adjust the surplus within 60 days, and any deficit must be funded within 45 days.

More security options and reinsurance rules

Self‑insurers may secure obligations with a surety bond, a standby letter of credit, cash, acceptable securities, or a fully funded actuarial trust, with the Superintendent’s approval. A group may use a trust for expected claims and cover any remaining balance with a compliant letter of credit. Groups can choose to fund at higher confidence levels using cash, marketable securities, or reinsurance. Reinsurance must come from an admitted insurer, an approved reinsurer meeting state standards, or Lloyd’s; each primary reinsurance contract must be filed for approval. The Superintendent may allow needed contract changes with less than 30 days’ notice when consistent with law.

Stronger letters of credit, quicker payouts

Letters of credit must be the bank’s own promise to pay. They auto‑extend one year unless the bank gives the Superintendent 90 days’ notice not to renew. If a bill is unpaid, a bankruptcy starts, or a bank won’t renew after at least 15 days to replace security, the Superintendent can direct the Treasurer to draw. The bank must promptly honor the Treasurer’s draft. For groups, a letter can only cover the gap between the required confidence and that level minus 10 points, and the trust (excluding the letter) must still meet a 65% confidence value. Older letter‑of‑credit rules are repealed and replaced by these terms.

Out-of-state rules and stronger oversight

Out‑of‑state self‑insurers may participate only through a protected cell. If a Maine‑authorized employer reinsures liabilities outside Maine, those are treated as out‑of‑state participation. A principal member with no Maine employees can qualify like a subsidiary without direct majority ownership, and the indemnity agreement counts as an irrevocable assignment. The Superintendent reviews liquidity, leverage, tangible net worth, size, and net income, may require forms, and can set extra review rules.

Sponsors & Cosponsors

Sponsor

  • Donna Bailey

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

Actions Timeline

  1. ACTPUB Chapter 53

    5/1/2026

  2. PASSED TO BE ENACTED, in concurrence.

    4/23/2025Senate

  3. PASSED TO BE ENACTED. Sent for concurrence. ORDERED SENT FORTHWITH.

    4/22/2025House

  4. CONSENT CALENDAR - FIRST DAYUnder suspension of the rules CONSENT CALENDAR - SECOND DAY.The Bill was PASSED TO BE ENGROSSED.In concurrence. ORDERED SENT FORTHWITH.

    4/17/2025House

  5. Report READ and ACCEPTED.READ ONCEUnder suspension of the Rules, READ A SECOND TIME and PASSED TO BE ENGROSSED.Ordered sent down forthwith for concurrence.

    4/15/2025Senate

  6. CARRIED OVER, in the same posture, to the next special or regular session of the 132nd Legislature, pursuant to Joint Order SP 519.

    3/21/2025Senate

  7. The Bill was REFERRED to the Committee on HEALTH COVERAGE, INSURANCE AND FINANCIAL SERVICES.In concurrence. ORDERED SENT FORTHWITH.

    3/20/2025House

  8. Committee on LABOR suggested and ordered printed On motion by Senator TIPPING of Penobscot REFERENCE to the Committee on HEALTH COVERAGE, INSURANCE AND FINANCIAL SERVICES Ordered sent down forthwith for concurrence

    3/20/2025Senate

Bill Text

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