Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 580 - THIRD-PARTY NOTICE OF CANCELLATION
Section 031-580-6 - Limitations on Cancellation; Right to Reinstatement

1. Within 90 days after cancellation of a contract for nonpayment of premium, the insured, any person authorized to act on behalf of the insured, or any dependent of the insured covered under the contract may request reinstatement of the contract on the basis that the insured suffered from cognitive impairment or functional incapacity at the time of contract cancellation.

2. The insurer may request a medical demonstration that the insured suffered from cognitive impairment or functional incapacity at the time of cancellation of the contract. If the demonstration is waived, or substantiates the existence of cognitive impairment or functional incapacity at the time of cancellation to the satisfaction of the insurer, the contract shall be reinstated. The medical demonstration may be at the expense of the insured.

3. The reinstated contract shall be issued without any evidence of insurability.

4. The reinstated contract shall cover loss occurring from the date of contract cancellation. There shall be no gaps in coverage. Coverage shall be at the level provided immediately before the cancellation.

5. Premium shall be paid from the date of the last premium payment at the rate which would have been in effect had the contract remained in force. Payment shall be made within 15 days after request by the insurer. If the premium is not paid as required, the insurer has no obligation to reinstate the policy. If the policy is not reinstated, the insurer is not responsible for claims incurred after the date of cancellation.

6. The insured also has the right to reinstatement of the prior contract, subject to the conditions and procedures set forth in Paragraphs 1 through 5 of this Subsection, in the event of cancellation for any other lapse or default on the part of the insured, provided that the default is cured promptly and an adequate causal connection is made between the default and the insured's cognitive impairment or functional incapacity.

7. All policies and certificates subject to this Rule issued on or after January 1, 2013 shall include notice of the right to seek reinstatement after cancellation, if loss of coverage is attributable to the contract holder's affliction with cognitive impairment or functional incapacity. This requirement may be satisfied through an endorsement to the contract or by including the notice of reinstatement right in an application that is incorporated into the contract.

1. If coverage was provided through a group policy which was replaced by the group or subgroup, the insured shall become covered under the new policy if at the time of replacement the insured would have qualified for the replacing coverage.

2. If the insured was covered by a group policy which terminated and was not replaced by the group or subgroup, the insured shall be entitled to all continuation and conversion benefits which were provided by the group policy at the time of policy termination.

3. If coverage for a group or subgroup is canceled as a result of a responsible individual's cognitive impairment or functional incapacity, the group or subgroup has the right to reinstate coverage in the same manner and subject to the same limitations as provided in Subsection A. This provision does not limit an insurer's right to cancel coverage for an employer group or subgroup prospectively, after giving sufficient notice, on the ground that the employer is no longer in business, even if the cessation of business results from the employer's cognitive impairment or functional incapacity.