Maine - InsuranceFraud.org

ME SB 572 convenes a working group to evaluate potential regulation of the vehicle towing industry and the impact on state agencies and industries, stating that deceptive, irresponsible and predatory towing practices impose financial burdens and logistical hardships on those who rely on their vehicles for everyday use and that the towing industry affects many different industries and state agencies.

Date introduced: 3/28/2025

Key Sponsor: Timothy Nangle

Committee: Joint Committee on Transportation.

Title 24-A: MAINE INSURANCE CODE

Chapter 23: TRADE PRACTICES AND FRAUDS

§2186. Insurance fraud prevention

Reporting of fraudulent insurance acts. Fraudulent insurance acts must be reported in accordance with this subsection.

A. An insurer shall, annually on or before March 1st or within any reasonable extension of time granted by the superintendent, file with the superintendent a report relating to fraudulent insurance acts that the insurer knew or reasonably believed had been committed during the previous calendar year. The report must contain information required by the superintendent in the manner prescribed by the superintendent. The information must be reported on an aggregate basis and may not contain any information identifying any individuals or entities. The superintendent shall adopt by January 1, 1999 rules necessary to define the information that must be reported. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter II‑A.

4. Reporting of fraudulent insurance acts. Fraudulent insurance acts must be reported in accordance with this subsection. A. An insurer shall, annually on or before March 1st or within any reasonable extension of time granted by the superintendent, file with the superintendent a report relating to fraudulent insurance acts that the insurer knew or reasonably believed had been committed during the previous calendar year. The report must contain information required by the superintendent in the manner prescribed by the superintendent. The information must be reported on an aggregate basis and may not contain any information identifying any individuals or entities. The superintendent shall adopt by January 1, 1999 rules necessary to define the information that must be reported. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter II-A. B. On the July 1st following the filing of the initial reports required by paragraph A, and annually thereafter, the superintendent shall report to the joint standing committee of the Legislature having jurisdiction over insurance matters. The report must include aggregate information detailing the fraudulent insurance activity experienced by insurers in this State. Chapter 920: REPORTING OF FRAUDULENT INSURANCE ACTS 1. Authority This Rule is adopted pursuant to the authority of 24-A M.R.S.A. §§ 212 and 2186, sub-§4, paragraph A. 2. Purpose Title 24-A M.R.S.A. §2186, sub-§4, paragraph A requires all insurers to annually, on or before March 1, file with the Superintendent a report relating to fraudulent insurance acts that the insurer knew or reasonably believed had been committed during the previous calendar year. This rule prescribes the form of the report which is required to be filed. 3. Definitions For purposes of this Rule, the following words and terms have the following meanings: A. “Fraudulent Insurance Act” has the same meaning as in 24-A M.R.S.A. §2186, sub-§1, paragraph A; and B. “Insurer” has the meaning set forth in 24-A M.R.S.A. §2186 sub-§1, paragraph B. 4. Format of Report of Fraudulent Insurance Acts The annual report by all insurers licensed to do business in Maine shall be in the format of attachment A. The report shall be filed by all insurers reporting premiums written in Maine in the preceding calendar year. All insurers are encouraged to report electronically through the web site of the Bureau of Insurance. In the alternative the report may be forwarded by disk or by hard copy. 5. Effective Date This rule is effective February 23, 1999. State of Maine Bureau of Insurance Transmittal Form Maine Fraud and Abuse Annual Report For Year Ending December 31, _______ Due March 1 ALTERNATIVE/CONSOLIDATED REPORTING BY INSURER GROUP In the alternative to individual insurer reporting, insurers may elect to report on a consolidated group basis. Group Name: NAIC #s of reporting insurers: Names of Insurers Reporting on a consolidated basis: Company Contact Person:________________________________ Telephone #_______________________________________ Company Name: NAIC #: Company Contact Person:____________________________ Telephone #___________________________________ Number of cases by category: Claimant May Have: 1. Faked property damage 2. Inflated financial loss 3. Faked/exaggerated injury 4. Staged accident/injury 5. Been known to file suspect claims, including faking, exaggerating, or extending total or partial disability 6. Other Legal Provider May Have: 7. Hired or paid cappers/chasers to recruit clients 8. Charged inconsistent with services provided 9. Other Medical Provider May Have: 10. Provided an inaccurate/incomplete history 11. Billed for services not provided 12. Upcoding or billing for excessive treatments 13. Unbundling 14. Received compensation for referral to medical or legal providers 15. Hired or paid cappers/chasers to recruit clients 16. Fabricated services 17. Provided an inaccurate/incomplete history 18. Operated without a license 19. Other Other Person or Entity May Have: 20. Received/paid compensation for referral 21. Fabricated services 22. Charged inconsistent with services provided 23. Provided an inaccurate/incomplete history, or submitted false or inaccurate information to obtain an insurance policy or to reduce an insurance premium 24. Other 25. Total number of suspected fraud claims by line of business: Auto Worker Comp General Liability Life Health (including Medicare/Medicaid) Marine Property Other 26. Total number of suspected fraud claims by type of insurance: Personal Commercial 27. Number of cases reported/referred to law enforcement agency? County Attorney’s Office U.S. Attorney’s Office Other Law Enforcement Workers’ Compensation Board Abuse and Fraud Unit NICB Other, including U.S. Postal Authorities 28. Amount of money not paid on suspected fraudulent cases: Please complete report on an annual basis and return to: State of Maine Bureau of Insurance 34 State House Station Augusta ME 04333 Electronic reporting is also acceptable and information regarding the electronic submission of this form will be made available on the agency web site at http://www.state.me.us/ pfr/ins/inshome2.htm.

5. Insurer antifraud plans. Within 6 months of the effective date of this Act, every insurer writing direct insurance shall prepare and implement an antifraud plan. This subsection does not apply to any agency, producer or other person acting on behalf of an insurer. The superintendent may review an insurer’s antifraud plan to determine if the plan complies with the requirements of this subsection. The antifraud plan must outline specific procedures, appropriate to the lines of insurance the insurer writes in the State, to: A. Prevent, detect and investigate all forms of insurance fraud; B. Educate appropriate employees on the antifraud plan and fraud detection; C. Provide for the hiring of or contracting for fraud investigators; and D. Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud.

3. Fraud warning required. Fraud warnings are required in accordance with the following. A. All applications and claim forms for insurance used by insurers in this State, regardless of form of transmission, must contain the following statement or a substantially similar statement permanently affixed to the application or claim forms: “It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purposes of defrauding the company. Penalties may include imprisonment, fines or a denial of insurance benefits.” B. The lack or omission of the statement required in paragraph A does not constitute a defense in any criminal prosecution or civil action for a fraudulent insurance act. C. This subsection applies to all insurers except reinsurers. The statement required in paragraph A must be included in all applications and claim forms filed and approved for use by the superintendent on or after January 1, 1999.

1. Civil penalty. Civil penalties may be assessed against any person who: A. Violates any provision of this Title, Title 24 or any other law enforced by the superintendent; B. Violates any rule lawfully adopted by the superintendent; or C. Violates any lawful order of the superintendent that has not been stayed by order of the superintendent or the Superior Court. The Superior Court, upon an action brought by the Attorney General, may assess a civil penalty of not less than $500 and not more than $5,000 for each violation in the case of an individual and not less than $2,000 and not more than $15,000 for each violation in the case of a corporation or other entity other than an individual, unless the applicable law specifies a different civil penalty. The superintendent, following an adjudicatory hearing, may assess a civil penalty of up to $500 for each violation in the case of an individual and a civil penalty of up to $10,000 for each violation in the case of a corporation or other entity other than an individual, unless the applicable law specifies a different civil penalty. The superintendent shall notify the Attorney General or the Attorney General’s designee of any such adjudicatory hearing at the time that the notice of hearing is issued by the superintendent. The superintendent may not assess a civil penalty if the Attorney General notifies the superintendent that the Attorney General intends to pursue an action in Superior Court to seek civil penalties for the same conduct. If the Attorney General elects to pursue the noticed action in Superior Court, the Attorney General shall notify the superintendent of that decision no later than 7 days prior to the hearing. 1-A. Equitable relief; actual damages. In addition to a civil penalty awarded pursuant to subsection 1, the Superior Court may award to any injured insured or applicant for insurance who is represented by the Attorney General reasonable equitable relief and actual damages. 2. Cease and desist orders. The superintendent may issue a cease and desist order following an adjudicatory hearing held in conformance with Title 5, chapter 375, subchapter IV,1 if the superintendent finds that any person has engaged in or is engaging in any act or practice in violation of any law administered or enforced by the superintendent, any rules promulgated under that law or any lawful order of the superintendent. A. A cease and desist order is effective when issued, unless the order specifies a later effective date or is stayed pursuant to Title 5, section 11004. B. In the event an appeal is taken, the court shall issue its own order for compliance to the extent that the superintendent’s order is affirmed. C. Violation of any cease and desist order shall be punishable as a violation of this Title in accordance with this section. 2-A. Emergency cease and desist. The superintendent may issue an emergency cease and desist order, without prior notice and hearing, if the complaint shows that a person is engaging in unlicensed insurance activities or is engaging in conduct that creates an immediate danger to the public safety or is causing or is reasonably expected to cause significant, imminent and irreparable public injury. A. A request for an emergency cease and desist order must be in writing in the form of a verified complaint. B. An emergency cease and desist order is effective immediately and will continue in force and effect until further order by the superintendent or unless stayed by the superintendent or by a court of competent jurisdiction. C. Upon issuance of an emergency cease and desist order, the superintendent shall serve on the person affected by the order, by registered or certified mail to the person’s last known address, an order that contains a statement of the charges and a notice of hearing. The hearing, held in conformance with Title 5, chapter 375, subchapter IV,1 must be held within 10 days of the effective date of the emergency order, unless a later time is agreed upon by all parties. D. At the hearing, the superintendent shall affirm, modify or set aside, in whole or in part, the emergency cease and desist order and may combine and employ any other enforcement or penalty provisions available to the superintendent to arrive at a final order. E. The superintendent’s order after hearing is a final order in all respects and is subject to subsection 2, paragraph A and section 236. 3. Reprimand or censure. The superintendent may issue a letter of reprimand or censure to any licensee, but only after opportunity for hearing has been provided to any and all persons who are subjects of the reprimand. 4. Refunds of overcharges. In the event that any insurer, fraternal benefit society, nonprofit hospital service plan, nonprofit medical service plan, nonprofit health care plan, health maintenance organization or preferred provider organization makes charges to any person that are not in conformity with a filing that it is required to submit for approval or disapproval by this Title or Title 24, the superintendent may order that refunds of any overcharges be made. 5. Election of enforcement options. The superintendent may elect to utilize any or all of the enforcement options provided by this section, in combination or in sequence, as the superintendent deems appropriate. The penalties and provisions of this section are in addition to any other penalty provided by law. 6. Restitution. The superintendent may order restitution for any insured or applicant for insurance injured by a violation for which a civil penalty may be assessed pursuant to this section.

1. Rates shall be made in accordance with the following provisions. A. Manual, minimum, class rates, rating schedules or rating plans shall be made and adopted, except in the case of specific inland marine rates on risks specially rated. B. Rates shall not be excessive, inadequate or unfairly discriminatory. C. Due consideration must be given: (1) To past and prospective loss experience within and outside this State; (2) To the conflagration and catastrophe hazards; (3) To a reasonable margin for underwriting profit and contingencies; (4) To dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers; (5) To past and prospective expenses both countrywide and those specially applicable to this State; (6) To all other relevant factors within and outside this State; (6-A) Deleted. Laws 1991, c. 885, ¤ B-2, eff. Jan. 1, 1993. (7) In the case of fire insurance rates, to the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available; and (8) In the case of title insurance rates, to the reasonableness of commission levels and other acquisition costs both countrywide and those specifically applicable to this State. D, E. Repealed. Laws 1989, c. 797, ¤ 3, eff. Jan. 1, 1991. F. Repealed. Laws 1985, c. 372, Pt. B, ¤ 4, eff. Jan. 1, 1986. G. Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. These standards may measure any differences among risks that may have a probable effect upon losses or expenses. No risk classification may be based upon race, creed, national origin or the religion of the insured. H. The expense provisions included in the rates to be used by an insurer must reflect the operating methods of the insurer and its anticipated expenses. I. Rates may contain a provision for contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of the profit allowance, consideration must be given to investment income. 2. Nothing in this section shall be taken to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications or risks based upon size, expense, management, individual experience, purpose of insurance, location or dispersion of hazard, or any other reasonable considerations, provided such classifications and modifications apply to all risks under the same or substantially similar circumstances or conditions.

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings. A. “Fraudulent insurance act” means any of the following acts or omissions when committed knowingly and with intent to defraud: (2) Presenting, or causing to be presented, or preparing any information containing false representations as to a material fact with knowledge or belief that the information will be presented to or by an insurer, insurance producer or other person engaged in the business of insurance concerning any of the following: (a) A document filed with the superintendent or the insurance regulatory official or agency of another jurisdiction; (b) The financial condition of an insurer; (c) The formation, acquisition, merger, reconsolidation, dissolution or withdrawal from one or more lines of insurance in all or part of this State by an insurer; (d) The issuance of written evidence of insurance; or (e) The reinstatement of an insurance policy; (3) Soliciting or accepting new or renewal insurance risks on behalf of an insurer or other person engaged in the business of insurance by a person who knows or should know that the insurer or other person responsible for the risk is insolvent at the time of the transaction; (4) Removing, concealing, altering or destroying the assets or records of an insurer or other person engaged in the business of insurance; (5) Embezzling, abstracting, purloining or converting money, funds, premiums, credits or other property of an insurer or other person engaged in the business of insurance; (6) Transacting the business of insurance in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of insurance; or (7) Attempting to commit, aiding or abetting in the commission of, or conspiring to commit the acts or omissions described in this subsection.

1. No person shall in this State directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not then authorized to transact such business in this State, in the solicitation, negotiation, procurement or effectuation of insurance or annuity contracts, or renewal thereof, or forwarding of applications for insurance or annuities, or the dissemination of information as to coverage or rates, or inspection of risks, or fixing of rates, or investigation or adjustment of claims or losses, or collection or forwarding of premiums, or in any other manner represent or assist such an insurer in the transaction of insurance with respect to subjects of insurance resident, located or to be performed in this State. 2. This section does not apply to: A. Matters authorized to be done by the superintendent under the Unauthorized Insurers Process Act, sections 2102 to 2108; B. Transactions as to which the insurer is not required to have a certificate of authority pursuant to section 405 (exceptions to certificate of authority requirement); C. A licensed adjuster or attorney at law representing such an insurer from time to time in his professional capacity; D. Transactions in this State relating to a policy of wet marine and transportation insurance delivered or issued for delivery outside this State; E. The employee, compensated on salary only, of a Maine employer who on behalf of the employer assists in the procurement or administration of insurance coverages on the property, risks and insurable interests of the employer; or F. Transactions outside this State arising from the unsolicited application of the insured, if the transaction is lawful in the jurisdiction in which it occurs and the applicable premium tax has been paid in compliance with Title 36, section 2513. 3. If the superintendent has reason to believe that any insurer or other person is acting in violation of this section or section 404, the superintendent shall commence proceedings in accordance with sections 12-A and 404. Section 2105 applies to all process, notices and statements of charges to be served on the unauthorized insurer or insurers.

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