An Act to Amend the Provisions of the Maine Workers' Compensation Act of 1992 Governing Requirements for Self-insurers
Sponsored By: Donna Bailey (Democratic)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 0 benefits, 0 costs, 4 mixed.
New security and letter-of-credit rules for self-insured employers
Self-insured employers can meet Maine security rules with a surety bond, a standby letter of credit, cash and approved securities, or a fully funded trust. A standby letter of credit renews for one year unless the bank gives the Superintendent at least 90 days’ notice that it will not renew. The Superintendent may tell the State Treasurer to draw on a letter of credit when bills go unpaid, a bankruptcy starts, or after nonrenewal if you do not replace it after at least 15 days’ notice. Drawn money is held for claimants until replacement security is provided or the Superintendent directs distribution. These letters follow the International Standby Practices (1998), and disputes use Maine law and courts.
Stricter trust funding and oversight for self-insurers
If you use a fully funded trust, it must hold unencumbered assets at least equal to the present value of expected claims, settlement costs, and safety margins; the Superintendent can also require admin costs. The Superintendent reviews liquidity, debt, tangible net worth, size, and net income when you ask to change funding levels and may require periodic group reports. The Superintendent can set a higher confidence level and you must raise funding within 60 days. For surplus releases, only limited outside assets count: cash up to $10,000; receivables and interest deposited on time; tangible assets converted to cash; and approved letters of credit. A group may cover expected claims in the trust and use a qualified letter of credit for the rest. With approval after steady performance, individuals with 5+ years can fund at 75% in aggregate; groups with 10+ years can fund at 65% in aggregate.
Tighter workers’ comp reinsurance for self-insurers
For contracts issued after January 1, 1993, Maine recognizes workers’ comp reinsurance only if it is issued by an admitted insurer, an approved reinsurer that meets state standards, or Lloyd’s as defined. Each proposed primary workers’ comp reinsurance contract must be filed for approval. The Superintendent may allow needed changes with less than 30 days’ notice when they are not contrary to law or rules.
New group and out-of-state rules for self-insurers
Out-of-state self-insurers can take part in the account only through a protected cell. An employer self-insuring Maine liabilities is treated as out-of-state to the extent it reinsures beyond its Maine plan. If a group’s principal member has no Maine employees, it must meet the same standards as a qualified parent corporation, but direct majority ownership is not required. The group indemnity agreement counts as the required irrevocable assignment.
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
Signed by Governor, ACTPUB Chapter 53
4/25/2025PASSED TO BE ENACTED, in concurrence.
4/23/2025SenatePASSED TO BE ENACTED. Sent for concurrence. ORDERED SENT FORTHWITH.
4/22/2025HouseCONSENT CALENDAR - FIRST DAYUnder suspension of the rules CONSENT CALENDAR - SECOND DAY.The Bill was PASSED TO BE ENGROSSED.In concurrence. ORDERED SENT FORTHWITH.
4/17/2025HouseReport READ and ACCEPTED.READ ONCEUnder suspension of the Rules, READ A SECOND TIME and PASSED TO BE ENGROSSED.Ordered sent down forthwith for concurrence.
4/15/2025SenateCARRIED OVER, in the same posture, to the next special or regular session of the 132nd Legislature, pursuant to Joint Order SP 519.
3/21/2025SenateThe Bill was REFERRED to the Committee on HEALTH COVERAGE, INSURANCE AND FINANCIAL SERVICES.In concurrence. ORDERED SENT FORTHWITH.
3/20/2025HouseCommittee 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
Enacted
Introduced
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