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‘Anti-Insurer’ Bills Defeated in Maine


The American Insurance Association (AIA) reported that it helped to prevent the passage of four insurance-related bills in the Maine legislature. The measures, LD 125, 295, 672 and 794, were considered by the Insurance and Financial Services Committee, and it was ultimately determined that the bills “ought not to pass,” effectively killing the bills for this session.

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“AIA believes the Insurance and Financial Services Committee made the correct recommendations regarding these bills,” said Gary Henning, AIA vice president for the Northeast Region.

Specifically, LD125, “An Act To Raise the Required Minimum Limits for Motor Vehicle Insurance,” would have raised the minimum limits from 25/50/100 to 50/100/250.  It also would have raised minimum medical pay from $2,000 to $20,000.  

“At any time, but particularly in these difficult economic times, any legislation that would make many consumers purchase more automobile insurance just doesn’t make sense,” said Henning.  


LD 295, “An Act To Require Insurance Companies to Disclose the Option to Purchase Higher Amounts of Coverage for Automobile Liability Insurance,” would have forced insurers to offer up to $2 million in uninsured motorist coverage.

Henning stated, “This legislation would have forced carriers to offer unrealistic levels of UM coverage to all drivers. This mandatory offer of such high amounts of UM coverage would be an invitation to commit fraud.”

The committee also rejected the alternative measure to LD 295 in LD 672, “An Act To Provide Reasonable Uninsured Motorist Coverage.” Under current law, the amount of uninsured vehicle coverage for motor vehicle insurance policies not subject to the Maine Automobile Insurance Cancellation Control Act may not be less than the minimum limits for bodily injury liability insurance provided for under the Maine Revised Statutes. This bill would have required that the amount of uninsured motor vehicle coverage for such policies be equal to the amount of coverage for liability for bodily injury or death in the policy offered or sold to the purchaser.


“These bills placed excessive mandates on automobile insurers and ultimately could have adversely impacted policyholders,” said Henning of LD 125, 295, and 672.

Finally, LD 794, “An Act To Provide Fair Value Insured Items,” was also defeated. This bill required an insurer to provide coverage for 85 percent of the total value of the contents of a home insured under a homeowner’s insurance policy if the insured opts not to or is unable to provide an inventory of any lost or damaged items of property to enable the insurer to determine the actual cash value of the lost contents.


“LD 794 would have had negative consequences for property insurers and could have led to increased instances of fraud and abuse.  Without accurate inventory of damaged contents, it would be too difficult to determine the dollar amount of the losses.  Requiring a specific threshold of 85 percent could have, in some instances, led to unjustifiable claims payments.  This, in turn, would add unwarranted claims costs to the whole system.” Henning said.

“Mandating specific coverages, and prescribing specific underwriting and claims adjustment guidelines are not practices with which the legislature should be concerned.  To the benefit of both consumers and insurers, the Insurance and Financial Services Committee made sound public policy decisions in declining to do so in the case of these bills,” concluded Henning.

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