Maine's insurance law is the Maine Insurance Code, Title 24-A of the Maine Revised Statutes, with details filled in by numbered Bureau of Insurance Rules (Rule 542 on CE, Rule 917 on annuities, Rule 919 on replacement, and others) and Bureau bulletins. The Maine questions on every exam draw from the same core: the Superintendent, producer licensing and appointments, continuing education, trust money, unfair trade and claims practices, fraud, privacy, and the guaranty associations. This guide covers those rules with citations. The general concepts (types of insurers, agency law, what rebating or twisting means) are in the national Insurance Regulation guide.

About the exam

Maine's licensing exams are delivered by Pearson VUE. Every exam is scored on a scaled score of 70 to pass.

Exam rules in the Code (24-A M.R.S. 1410):

• Each line of authority needs its own exam and fee, though several can be taken the same day.
• If the exam is given in two parts and you fail one, you pay the full fee again but retake only the part you failed.
• The vendor reports pass or fail within 30 days. If you don't apply for the license within 2 years of passing, you must test again.

The regulator

• The Bureau of Insurance sits in the Department of Professional and Financial Regulation (10 M.R.S. 8001). It is headed by the Superintendent of Insurance. Maine does not use the title "Commissioner" (24-A M.R.S. 201).
• The Superintendent is appointed by the Governor, subject to review by the Legislature's insurance committee and confirmation by the Legislature, for a 5-year term (or until a successor qualifies). Removal is for cause, by impeachment or by address of the Governor to both houses (201).
• Powers are those expressly given by Title 24-A or reasonably implied from it (211), including rulemaking (212). Court enforcement and criminal referrals go through the Attorney General (214).
• Examinations: domestic insurers at least every 3 years; no authorized insurer may go more than 5 years between exams (221).

Hearings and appeals

• A person aggrieved by an act or order applies for a hearing within 30 days of learning of it. The hearing is held within 30 days of the application. Failing to hold it counts as a denial (229).
• Written notice of hearing: at least 14 days in advance (230).
• Appeal: 30 days for a party; 40 days for a non-party directly affected (236).

Penalties (12-A)

• The Superintendent may assess up to $500 per violation for an individual and up to $10,000 per violation for an entity. In Superior Court the range is $500–$5,000 (individual) and $2,000–$15,000 (entity).
• An emergency cease and desist order can issue without a prior hearing for unlicensed activity or conduct posing immediate danger. The hearing then follows within 10 days.
• Other remedies include restitution, refunds of overcharges and reprimands.

Insurers

• Domestic = formed in Maine; foreign = formed anywhere else; alien = a foreign insurer formed outside the United States (6).
• Stock insurers have capital divided into shares (400). Mutual insurers have no capital stock and are run by a board elected by policyholders (401).
• An insurer needs a certificate of authority (404). Willfully issuing a contract without one is punishable by a fine up to $5,000, up to 2 years in prison, or both. Surplus lines placed under chapter 19 are exempt (405).

Surplus lines (chapter 19)

• A producer with surplus lines authority may place coverage with an eligible nonadmitted insurer only after a diligent effort shows authorized insurers won't write it. Price alone is not a reason (2004).
• Life, health (except disability), employee benefit excess and workers' compensation can't be exported to surplus lines (2002-A). Bulletin 457 says auto generally shouldn't go there either, because the Maine Automobile Insurance Plan exists.
• The applicant signs a notice in 16-point type saying nonadmitted insurers aren't covered by the guaranty funds. The producer keeps it 5 years from policy expiration (2009).
• Surplus lines licensees post a bond of at least $20,000 (2020).

Producer licensing

Lines of authority (1420-F): life, accident and health or sickness, property, casualty, variable life and variable annuity, personal lines (P&C sold to individuals and families for noncommercial purposes), and others.

Who needs a license

• An insurance producer is anyone who sells, solicits or negotiates insurance (1420-A). To solicit means attempting to sell, or urging someone to apply for a particular kind of insurance from a particular company.
• Exempt: insurer or agency officers and employees whose work is clerical or administrative, only indirectly related to sales, with no commission. Also exempt are employers running their own employee benefit plan who aren't paid by the insurer (1420-C).
• A consultant advises for a fee. Consultants need 5 years of experience to sit for the exam (1410), a $20,000 bond (1464) and a written fee contract (1465). Contract records are kept 3 years (1468).

Getting licensed

• A resident applicant must be at least 18, pass the exam(s) and pay fees (1420-E).
• Nonresidents licensed and in good standing in their home state get a Maine nonresident license without a Maine exam (1420-G).
• Moving to Maine: apply within 90 days of establishing residence and no exam is needed for lines already held (1420-H).
• Moving out: a resident who moves out files within 30 days (1420-G(3)).
• Temporary license: up to 180 days, no exam. It can go to a surviving spouse or personal representative of a deceased or disabled producer, or to the designee of a producer entering military service. The Superintendent may require a sponsor who answers for the temporary licensee's acts (1420-J).
• Apprentice producer license (1420-Q):
  • 180 days, nonrenewable. The applicant must be 18 or older, a Maine resident and employed by the sponsor.
  • The sponsor must have held a Maine license in good standing for at least 1 year and takes legal responsibility for the apprentice. A sponsor may be limited to 2 active apprentices a year.
  • Apprentices may not do anything involving life insurance, annuities, long-term care or ACA plans.
• Business entities designate a licensed producer responsible for compliance and report a change of that person within 14 days (1420-E, 1413). Each additional Maine location needs a branch registration (1413). Notify the Superintendent before using a trade name (1414).

Keeping the license

• A Maine license does not expire on a renewal date. It continues in force as long as fees are paid and resident CE is met (1416-A). Fees unpaid 90 days after the due date lead to suspension or revocation.
• A lapsed individual license can be reinstated within 12 months without an exam (1420-F(3)).
• Report changes of address, phone, e-mail, name or other material facts within 30 days (1419).
• Report administrative actions in another jurisdiction within 30 days of final disposition. Report a criminal prosecution within 30 days of the initial pretrial hearing date (1419).

Continuing education (Rule 542; 24-A M.R.S. 1482)

• 24 credit hours per biennium, at least 3 in ethics. The statute caps the requirement at 30 hours.
• The biennium runs from the first day of the month after your birth month to the last day of your birth month two years later.
• New licensees whose license is issued less than 1 year before the first compliance date are excused for that biennium.
• No carryover. No credit for repeating a course in the same biennium. Sales, motivation and time-management courses don't count.
• Classroom credit: 1 hour per 50 minutes of instruction.
• Late hours cost $25 per hour, up to $250. Continued noncompliance brings a 60-day suspension, then termination.
• Nonresidents meet Maine CE by meeting their home state's, on a reciprocal basis.

Discipline (1417, 1420-K)

• Grounds include false application information; misappropriating or withholding money; forgery; using notes on the exam; knowingly accepting business from an unlicensed person; and failing to pay child support or state taxes.
• A denied applicant gets the reason in writing. The applicant may demand a hearing within 30 days, and it must be held within 30 days of the demand.
• After a revocation, no new license for at least 1 year (1418). Two revocations make a person permanently ineligible.
• A person whose license was revoked, suspended or surrendered may not take part in an insurance business. Doing so is a Class E crime (1412).

Appointments and terminations

• A license gives no authority to represent an insurer. That authority comes from an appointment (1420-A(6)). A producer must be appointed before acting as an insurer's agent (1420-M).
• The insurer files the appointment within 15 days of executing the agency contract or receiving the first application (1420-M(2)).
• A producer who isn't appointed with an insurer may place business through an appointed producer and share the commission, as long as both are licensed for the line (1450(2)).
• Termination: the insurer notifies the Superintendent within 30 days, whether or not the termination is for cause (1420-N).
  • The insurer sends the producer a copy within 15 days. A for-cause notice goes by certified mail or overnight carrier.
  • The producer may file comments within 30 days.
  • Good-faith reporting is immune from civil liability.
• Insurers must train and supervise their appointed producers and are accountable for their conduct (1445).

Money and records

• Premiums and return premiums a producer receives are trust funds held in a fiduciary capacity (1449). Return premiums must be paid or credited within 30 days of receipt.
• Commissions may go only to persons licensed for that line when the application was taken (1450, 1420-L). Renewal commissions may go to a person who was licensed at the time of sale.
• Producers keep transaction records for at least 3 years. The records include the insurer, policy number, premium, insured, and the date and time of every binder (1447).
• An authorized agent's knowledge of the risk binds the insurer (2422).

Unfair trade practices (chapter 23)

What's allowed (2163-A):

• Non-cash gifts costing up to $100 per person per year.
• Free raffles with prizes up to $500.
• Value-added services related to the policy or to risk control.

Bulletin 233: cutting a P&C commission to lower the client's price without an approved filing is rebating.

Claims practices

• An unfair claims practice under 2164-D is one done in conscious disregard of the law or often enough to be a general business practice. For example, claim forms must be provided within 15 calendar days of a request. The section does not apply to workers' comp, medical malpractice, fidelity, surety or boiler and machinery.
• A claim is payable within 30 days of proof of loss (60 days for standard fire policies; 2 months for individual life). An undisputed overdue claim earns interest at 1½% per month (2436).
• An insured harmed by listed practices of its own insurer may sue for damages, attorney's fees and that interest (2436-A).

Fraud

• A fraudulent insurance act is knowingly presenting false material information with intent to defraud. Examples include embezzling premiums and soliciting business for an insurer you know is insolvent (2186).
• Every application and claim form must carry a fraud warning. Leaving it off is no defense to a fraud charge.
• Insurers (not producers) must have an antifraud plan and file an aggregate fraud report by March 1 each year. Maine puts no fraud-reporting duty on individual producers.

Privacy and underwriting

• The Insurance Information and Privacy Protection Act (chapter 24) lets consumers see what's collected, correct it and learn the reasons for an adverse underwriting decision (2202, 2204).
• A disclosure authorization lasts up to 30 months for life, disability or LTC applications. For health insurance it can last the term of coverage plus renewals (2208).
• HIV: an insurer may not ask whether someone has had an HIV test (2159(6)). A test requires written informed consent (Rule 490). Coverage may not be refused because someone takes PrEP (2159(7)).
• Credit scoring (personal lines only): no denial, cancellation or nonrenewal based solely on credit. Scores may not use income, address, ZIP code, marital status and other listed factors. Credit data must be no more than 90 days old (2169-B).

Life and annuity sales rules

• Life cost disclosure (Rule 240): a Buyer's Guide and preliminary policy cost statement go to the buyer before the application is signed. The Policy Summary is due at or before delivery. The producer must say up front that he or she is a life insurance producer and name the insurer.
• Illustrations (Rule 910): no "vanishing premium" language. A revised illustration must be signed by delivery if the policy issues differently.
• Replacement (Rule 919):
  • The producer reads the replacement notice no later than when taking the application, unless the applicant declines a reading.
  • The replacing insurer gives a 30-day right to return for a full refund.
  • Violations count as twisting under 2155.
• Annuities (Rule 917): a recommendation must be in the consumer's best interest. Producers complete a one-time 4-hour annuity course. Details are in the Maine Annuities guide.
• Life settlements: a settlement producer must hold a life license (6803). The seller (viator) may rescind within 30 days of signing or 15 days after receiving payment, whichever comes first (6809).

Guaranty associations

• MIGA doesn't cover surplus lines, title, life or health. It excludes punitive damages and first-party claims by insureds with net worth over $25 million (4433, 4435).
• Using the existence of either association to sell insurance is an unfair practice (4620, 4451).

Common exam traps

• Maine's regulator is the Superintendent, confirmed by the Legislature, for 5 years.
• Licenses are continuous, not renewed on a fixed cycle. CE is still 24 hours (3 ethics) per biennium, tied to your birth month.
• Appointment filing: 15 days. Termination notice: 30 days for any termination. Copy to producer: 15 days.
• Address and other changes: 30 days. Other-state actions: 30 days. Criminal charges: 30 days after the initial pretrial hearing.
• Gifts: $100, never cash. Raffle prizes: $500.
• Producers don't need an antifraud plan. Insurers do.
• Apprentice licensees can't touch life insurance.