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Bureau-backed technical cleanups to workers' compensation self-insurance drawn in LD 11 95
Summary
The Bureau of Insurance presented LD 11 95, a department bill with technical and alignment changes to Title 39‑A regarding self‑insurance for workers' compensation, including letter‑of‑credit confidence levels, notice periods, draw triggers and trust references.
A bureau representative presented LD 11 95 as a department bill to fix drafting errors and align Maine’s self‑insurance requirements in Title 39‑A with federal and market practices. The bureau described the bill as a set of technical cleanups rather than a substantive policy change.
Stacy Burgendale, senior staff attorney at the Bureau of Insurance, listed the principal changes: adjust confidence level requirements for letters of credit held by self‑insured employers (aligning solvency requirements with current federal tax treatment), clarify notice deadlines for nonrenewal of irrevocable standby letters of credit (to require notice by the deadline not on an exact date), change the triggering standard for a draw to prevent issuing banks from impeding draws, correct references related to fully funded trusts and group self‑insurers, correct a cross‑reference to Lloyd’s of London, and require the Bureau to notify the Workers’ Compensation Board if a self‑insurance authorization is suspended or terminated.
The bureau said the changes codify current practice in several areas and reduce ambiguity in the statute. Committee members asked clarifying questions about whether the changes raise or lower cash requirements for self‑insured employers; Bureau counsel replied the changes allow letters of credit to cover certain confidence‑level differences and could improve tax treatment without reducing solvency protections.
Ending: The bureau supported the bill and offered to answer work‑session questions; no opposition testimony was recorded and no committee action was taken at the hearing.
