Guarantee Trust Life Insurance Company v. Superintendent of Insurance

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2013 ME 102
Docket: BCD-13-56
Argued: September 11, 2013
Decided: November 21, 2013

Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR,
JJ.

GUARANTEE TRUST LIFE INSURANCE COMPANY

v.

SUPERINTENDENT OF INSURANCE

ALEXANDER, J.

[¶1] Guarantee Trust Life Insurance Company (GTL) appeals from a

judgment entered in the Business and Consumer Docket (Horton, J.) that affirmed

a decision of the Superintendent of Insurance. The Superintendent concluded that

GTL violated 24-A M.R.S. §§ 1420-M(1),1 1902,2 and 2412(1-A)(B)3 (2012) and

1
Title 24-A M.R.S. § 1420-M(1) (2012) states, “An insurance producer may not act as an agent of an
insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer
who is not acting as an agent of an insurer is not required to become appointed.”
2
Title 24-A M.R.S. § 1902 (2012) states, in part, “A person may not act as or profess to be an
administrator after August 1, 1990, unless licensed under this chapter.”
3
Title 24-A M.R.S. § 2412(1-A)(B) (2012) provides, in relevant part:

An insurer may not provide coverage to a resident of this State under a group or
blanket policy or contract issued and delivered outside this State unless . . . [f]or trustee
group policies . . . and association group policies . . . , certificates of coverage to be
delivered or issued for delivery in this State [are] filed with the superintendent at least 60
days before any solicitation in this State, with sufficient information concerning the
nature of the group, including any trust agreements or association bylaws, to enable the
superintendent to determine whether the group satisfies the statutory requirements for a
trustee or association group.
2

that GTL is accountable, pursuant to 24-A M.R.S. § 1445(1)(D) (2012), 4 for

violations committed by Cinergy Health, Inc., a company acting as GTL’s

producer. Based on these conclusions, the Superintendent ordered GTL to pay a

civil penalty of $150,000.

[¶2] GTL argues that (1) it cannot be accountable pursuant to section

1445(1)(D) for Cinergy’s misconduct occurring at a time when no common law

agency relationship existed between the companies; (2) there is insufficient

evidence to support the Superintendent’s finding that GTL certificates of coverage

were issued to Maine consumers and therefore GTL could not be found liable

pursuant to section 2412(1-A)(B); (3) the Superintendent’s decision should be

vacated as untimely; (4) the Superintendent abused her discretion by holding GTL

liable under section 1420-M because that section applies to producers and because

Cinergy was not GTL’s agent; and (5) the Superintendent abused her discretion by

penalizing GTL for violating 24-A M.R.S. § 1902, when a violation of that statute

had not been alleged in the Bureau of Insurance’s amended petition. We affirm the

judgment.

4
Title 24-A M.R.S. § 1445(1)(D) (2012) states, in part, “In addition to any other applicable
provisions of law, the insurer . . . [i]s accountable and may be penalized by the superintendent, as
provided for in this Title, for the actions of its producers.”
 3

I. CASE HISTORY

[¶3] GTL is an Illinois-domiciled insurance company licensed to do

business in Maine as an insurance company. Cinergy Health, Inc., based in

Florida, was licensed in Maine as a nonresident producer agency. Cinergy began

marketing a limited medical benefit health insurance plan to individuals

nationwide in 2007. Pursuant to an agreement between Cinergy and the National

Congress of Employers (NCE), Cinergy marketed coverage under the plan to

individuals who, by virtue of enrolling in the plan, became members of NCE.

NCE was a New York non-profit association, but was not an approved association

in Maine.

[¶4] In most states, the limited medical benefit plan that Cinergy marketed

and sold was provided under a policy or policies issued to NCE by American

Medical and Life Insurance Company (AMLI), a New York insurance company.

AMLI had applied for a license to provide insurance coverage in Maine. However,

the Bureau of Insurance deemed AMLI not qualified and denied its application to

provide insurance to Maine consumers in 2006.

[¶5] To enable it to offer the limited medical benefit plan marketed by

Cinergy in Maine, AMLI entered into an agreement with GTL (the Agreement),

effective January 1, 2008, in which GTL would act as a “fronting carrier” for

AMLI because GTL is fully licensed to issue insurance in Maine. Under this
4

arrangement, GTL would “issue a policy, and [AMLI] and its entities [would]

perform the administration of that policy, and through a reinsurance agreement, a

majority of the risk [would] be shifted to [AMLI].” 5 Pursuant to the Agreement,

GTL retained ten percent of the risk (profits or losses) and received five percent of

the gross net collected premiums. As part of the fronting arrangement, GTL and

AMLI contracted in the Agreement that any insurance premiums paid to AMLI

were deemed to have been received by GTL.

[¶6] GTL issued a group limited benefits health insurance policy to NCE,

effective January 1, 2008 (the Master Policy). GTL’s issuance of the Master

Policy enabled GTL to provide coverage under NCE-issued policies to individuals

in Maine. Evidence in the record also indicates that GTL confirmed that it “issued

at least one insurance policy to a Maine resident through [NCE].” GTL never

obtained approval from the Bureau of Insurance to issue a group policy to NCE in

Maine.6

5
Pursuant to the Agreement, GTL agreed to “provide AMLI, and its subcontractors, access to GTL
policies that mirror the design and coverage of the AMLI limited medical policies currently being
marketed . . . .”
6
In June 2008, the Bureau of Insurance contacted GTL stating that it had come to the Bureau’s
attention that GTL was working with unapproved associations in Maine. In response, GTL sent an email
to AMLI in late July instructing it to cease marketing new coverage in Maine until associations, naming
NCE specifically, had been approved. However, policies continued to be sold and premiums attributed to
GTL, of which GTL apparently was or should have been aware. GTL asserts that AMLI was responsible
under the Agreement to ensure that NCE was approved as an association, but the record evidences that
GTL knew in June or July 2008 that AMLI had not done so and that GTL then offered to do it itself, and,
as a more general matter, that GTL could not depend on AMLI to comply with the terms of the
Agreement.
 5

[¶7] Under the Agreement, AMLI retained responsibility for most of the

administrative duties including marketing, underwriting, and premium billing. The

Agreement stated that AMLI would subcontract some of its duties to other parties

and that AMLI would indemnify GTL for the actions of AMLI and its

subcontractors. The Agreement specifically identified two entities by name as

AMLI subcontractors, which GTL accepted.

[¶8] As GTL acknowledged at oral argument on this appeal, it negotiated

the terms of the Agreement “word by word.” Despite the purported level of care in

negotiating the Agreement, no entity identified in the Agreement—AMLI or the

two named subcontractors—was licensed to perform third-party administrative

services in Maine. GTL claims that it relied on AMLI under the terms of the

Agreement to ensure the necessary licensure. However, GTL never took steps to

verify that AMLI or either of its two named subcontractors were licensed in Maine.

[¶9] The record indicates that AMLI subcontracted marketing duties in

Maine to Cinergy. Cinergy marketed and sold coverage under the Master Policy to

individuals in Maine, including making sales to more than fifty Maine residents

between February 2008 and October 19, 2008. Over $80,000 in premiums was

collected from Maine insureds from the sale of this coverage; GTL received its

share pursuant to the Agreement. Although GTL did not have actual notice when

AMLI contracted marketing to Cinergy, the record contains testimonial evidence
6

showing that GTL knew as early as August 2008 that it was one of the insurers of

the plan that Cinergy marketed and that Cinergy was involved, or that AMLI

subcontracted or may have subcontracted with Cinergy to provide services.

[¶10] Beginning in March 2008 and continuing through July 2008, Cinergy

ran television ads in Maine that stated, in a brief display, that its advertised

coverage was provided by AMLI, for whom GTL knew that it was the fronting

carrier; that identified the number of the Master Policy issued by GTL to NCE; and

that stated that coverage was offered through membership in NCE. Then, as of

September 2008, Cinergy television advertisements ran in Maine in which GTL

was clearly, if somewhat quickly, named as the underwriter along with AMLI.

According to the telephone sales script that Cinergy claims it used to market

coverage under the Master Policy to one Maine insured in August 2008, Cinergy

informed the insured, whose coverage became effective September 15, 2008, that

“[t]he plan is offered by Cinergy Health, a licensed insurance agency, and

underwritten by the Guarantee Trust Life Insurance Company, an AM Best rated

insurance company.” Additionally, though the dates of his receipts are not

indicated in the record, one Maine insured whose coverage was effective

September 1, 2008, received statements for benefits paid that listed both GTL and

Cinergy at the top.
 7

[¶11] On October 20, 2008, more than eight months after Cinergy began

marketing coverage under the Master Policy, GTL appointed Cinergy as its

producer agency pursuant to 24-A M.R.S. § 1420-M (2012), after which Cinergy

sold additional coverage to Maine residents until mid-December 2008. During this

period, GTL also funded the payment of claims paid via a third-party claims payor.

It is now undisputed that Cinergy repeatedly violated Maine insurance laws in the

course of marketing the limited medical benefit insurance plan.

[¶12] In July 2010, the Bureau of Insurance filed petitions, later amended,

against GTL, Cinergy, and a named individual not at issue in this appeal. As to

GTL, the Bureau alleged that it violated 24-A M.R.S. §§ 1420-M(1), 2186(2),7 and

2412(1-A) (2012), and that it was accountable pursuant to 24-A M.R.S.

§ 1445(1)(D) for Cinergy’s insurance law violations.

[¶13] The Superintendent held a two-day hearing in December 2010,

received supplemental evidence and argument, and closed the record on January

21, 2011. On February 23, 2011, the Superintendent timely issued an order

extending the time to issue a decision due to the complexity of the proceeding, the

magnitude of the record, and the important legal issues involved. The

Superintendent stated that “[b]est efforts will be made to issue a decision on or

7
Title 24-A M.R.S. § 2186(2) (2012) prohibits a person from committing a “fraudulent insurance
act,” defined as certain “acts or omissions,” as specified in 24-A M.R.S. § 2186(1)(A) (2012), “when
committed knowingly and with intent to defraud.”
8

before Friday, March 4, 2011.” No party objected to the delay at any time while

the decision was pending.

[¶14] The Superintendent issued an extensive written decision on April 26,

2011, finding that Cinergy had committed multiple violations of the Maine

Insurance Code. The Superintendent concluded that GTL is accountable for

Cinergy’s violations occurring after GTL appointed Cinergy its producer on

October 20, 2008, a conclusion that GTL does not dispute. The Superintendent

also concluded that GTL is accountable for Cinergy’s actions from February 2008

until October 20, 2008, before GTL appointed Cinergy as its producer, pursuant to

24-A M.R.S. § 1445(1)(D). Finally, the Superintendent concluded that GTL had

violated 24-A M.R.S. §§ 1420-M(1), 1902, and 2412(1-A)(B). The Superintendent

imposed a civil penalty of $150,000 on GTL. GTL moved for rehearing and

modification of the decision, which the Superintendent denied.

[¶15] GTL petitioned the Superior Court for review pursuant to

M.R. Civ. P. 80C and 5 M.R.S. § 11001(1) (2012). The appeal was transferred to

the Business and Consumer Docket on September 10, 2012.8 The court entered

judgment on January 3, 2013, in favor of the Superintendent with costs. GTL filed

this timely appeal pursuant to 5 M.R.S. § 11008 (2012) and M.R. App. P. 2.

8
Cinergy also appealed, but the Superior Court dismissed the appeal with prejudice by consent.
 9

II. LEGAL ANALYSIS

[¶16] When the Superior Court acts in its appellate capacity pursuant to

M.R. Civ. P. 80C, “we review a decision of the Superintendent directly for an

abuse of discretion, error of law, or findings not supported by the evidence.”

Bankers Life & Cas. Co. v. Superintendent of Ins., 2013 ME 7, ¶ 15, 60 A.3d 1272.

[¶17] In reviewing the interpretation of a statute, we look first to its plain

language, analyzing it “in order to effectuate the intent of the Legislature.” Eagle

Rental, Inc. v. State Tax Assessor, 2013 ME 48, ¶ 11, 65 A.3d 1278; Bankers Life

& Cas. Co., 2013 ME 7, ¶ 15, 60 A.3d 1272. If the language is ambiguous, we

“accord due consideration to the Superintendent’s interpretation and application of

technical statutes and regulations and will overturn the Superintendent’s action

only if the statute or regulation plainly compels a contrary result.” Bankers Life &

Cas. Co., 2013 ME 7, ¶ 15, 60 A.3d 1272.

[¶18] The Superintendent’s factual findings are reviewed to determine

whether they are “not supported by substantial evidence in the record.” Id. ¶ 16.

“In reviewing the findings, we will examine the entire record” to determine

whether the Superintendent “could fairly and reasonably find the facts” as she did,

“even if the record contains other inconsistent or contrary evidence.” Id. “[W]e

will affirm the findings of fact if there is any competent evidence in the record to

support them.” Id.
10

[¶19] We address GTL’s five issues on appeal in turn.

A. GTL’s Vicarious Liability for Cinergy’s Misconduct

[¶20] GTL argues that the Superintendent erred in finding it liable pursuant

to 24-A M.R.S. § 1445(1)(D) for Cinergy’s misconduct occurring before October

20, 2008, the date on which GTL appointed Cinergy as its producer. GTL argues

that, notwithstanding the plain language of 24-A M.R.S. § 1445(1)(D), sections

1445(3) (2012) and 1420-M(1) require that, to be liable for Cinergy’s

pre-appointment misconduct, GTL must then have had a common law agency

relationship with Cinergy and that it did not. In effect, GTL argues that, despite

agreeing to serve as a front for an unlicensed carrier (AMLI), to do business in

Maine, and receiving a share of premiums for coverage sold by the insurance

producer that was marketing that coverage (Cinergy), it should not be held

responsible for the improper acts of that insurance producer.

[¶21] Section 1445(1)(D) states that “the insurer . . . [i]s accountable and

may be penalized by the superintendent, as provided for in this Title, for the

actions of its producers.”9 See generally Bankers Life & Cas. Co., 2013 ME 7,

¶ 17, 60 A.3d 1272 (noting that there is no requirement that the insurer have

independently taken improper actions to be accountable under this section). An

9
“‘Insurer’ includes every person engaged as principal and as indemnitor, surety or contractor in the
business of entering into contracts of insurance.” 24-A M.R.S. § 4 (2012).
 11

“insurance producer” is “a person required to be licensed under subchapter II-A to

sell, solicit or negotiate insurance.” 24-A M.R.S. § 1402(5) (2012); see also

1 M.R.S. § 72(15) (2012) (stating that “person” may include a “body corporate”).

[¶22] In contrast to the preceding three paragraphs at 24-A M.R.S.

§ 1445(1)(A)-(C) (2012), which provide for an insurer’s responsibilities with

respect to its “appointed producers” (emphasis added), the fourth paragraph, the

statute at issue here, section 1445(1)(D), makes an insurer accountable for “the

actions of its producers.” By not including the word “appointed” in section

1445(1)(D) when it did so in each of the preceding paragraphs, the Legislature’s

intent is unambiguous: an insurer is strictly liable for the actions of those who sell,

solicit, or negotiate insurance of the insurer, whether or not the producer was

formally appointed. Section 1445(1)(D)’s use of the phrase “its producers”

suggests only that the insurer must know, or should know, that an entity or person

is selling, soliciting, or negotiating its insurance product to impose liability on the

insurer, but no more. Section 1445(3) does not alter the plain language of section

1445(1)(D).10

10
Title 24-A M.R.S. § 1445(3) (2012) provides, “Nothing in this chapter abrogates the common law
principles of apparent or implied authority as available remedies or defenses.”

GTL also cites to 24-A M.R.S. § 1420-M(1) for support that a common law agency relationship must
exist before an insurance company can be held accountable for the acts of companies that sell, solicit, or
negotiate insurance coverage provided by the insurer. We again disagree. Section 1420-M(1) states, “An
insurance producer may not act as an agent of an insurer unless the insurance producer becomes an
appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not
required to become appointed.” Despite the presence of the word “agent,” this statute simply provides
12

[¶23] It is undisputed that Cinergy was selling, soliciting, or negotiating

coverage under the Master Policy issued by GTL prior to its appointment and, as

such, was GTL’s producer from January or February 2008 to October 20, 2008.

Although GTL argues that AMLI subcontracted with Cinergy without GTL’s

approval and that GTL thus did not know that Cinergy was the entity marketing its

insurance coverage, GTL knew that insurance was being sold under its policy.

GTL knew when it signed the Agreement, effective January 2008, that AMLI

intended to subcontract marketing to other entities and that those entities were not

or might not be licensed in Maine. GTL was therefore content to disregard the

warning signs that the procedures in place were inadequate or unlawful, but

nonetheless accepted business and the accompanying premiums while turning a

blind eye to whether a producer working on its behalf was even licensed, much less

marketing its coverage in compliance with the law.11

[¶24] Furthermore, considering the testimonial evidence in the record;

GTL’s receipt of a share of premiums from these pre-appointment sales; and the

notice provided in Cinergy advertisements, including the identification of GTL by

that it is a violation for a producer to act as an insurer’s producer unless appointed. It does not suggest
that the insurer cannot be held accountable for the violations of an unappointed producer pursuant to
section 1445(1)(D), whether or not a common law agency relationship is established, or that a producer
cannot be determined to have been acting on behalf of an insurer even though unappointed.
11
For example, in a letter to the Bureau dated January 7, 2009, GTL stated, “GTL does not have any
agreement with Cinergy to market this plan of insurance. All marketing agents are handled through
AMLI.”
 13

name, that ran during Cinergy’s pre-appointment period, GTL cannot seriously

argue that it was not on notice that Cinergy was acting on GTL’s behalf pursuant to

the Agreement with AMLI. The Superintendent properly held GTL accountable

for Cinergy’s misconduct before GTL formally appointed Cinergy as its producer

agency.

[¶25] To the extent that GTL relied on AMLI to identify its producers and

ensure their compliance with Maine law, GTL may have a breach of contract claim

against AMLI, but its effort to contract away its obligations as an insurer are

independent from, and do not absolve GTL of, the liability imposed upon it

pursuant to 24-A M.R.S. § 1445(1)(D).

B. GTL’s Liability for Failing to Appoint Cinergy

[¶26] GTL argues that the Superintendent erred in finding it liable pursuant

to 24-A M.R.S. § 1420-M(1), as alleged in the Bureau’s amended petition, because

that section places a duty only on producers (e.g., Cinergy) and not on insurers

(e.g., GTL).12

[¶27] Section 1420-M(1) states that an “insurance producer may not act as

an agent of an insurer unless the insurance producer becomes an appointed agent of

that insurer. An insurance producer who is not acting as an agent of an insurer is

12
GTL also argues that the Superintendent erred in finding it liable pursuant to 24-A M.R.S.
§ 1420-M(1) because, it asserts, Cinergy was not acting as GTL’s agent prior to October 20, 2008. This
issue has been addressed above. See supra n.10.
14

not required to become appointed.” 24-A M.R.S. § 1420-M(1). Section

1420-M(1) expressly prohibits the producer from acting as the insurer’s insurance

producer until appointment. It also can be read, although it does not expressly

state this, to create a duty on the part of the insurer to ensure that entities acting as

its insurance producers are in fact appointed. The Superintendent interpreted

section 1420-M(1) as imposing a duty on GTL, as the insurer, to file a notice of

appointment for Cinergy before GTL accepted business that Cinergy sold, acting

as its producer, and that GTL’s failure to do so constituted a violation of this

section. We give due consideration to the Superintendent’s interpretation of this

section as placing an affirmative duty on the insurer, concluding that section

1420-M(1) does not plainly compel a contrary result. See Bankers Life & Cas.

Co., 2013 ME 7, ¶ 15, 60 A.3d 1272.

[¶28] Additionally, reading section 1420-M(1) in the context of section

1420-M as a whole, the insurer unambiguously has a duty to undertake specific

actions in order to “appoint a producer as its agent” before a producer may legally

act on its behalf and the insurer can accept business sold by it. See 24-A M.R.S.

§ 1420-M(1)-(4) (2012); Eagle Rental, Inc., 2013 ME 48, ¶ 11, 65 A.3d 1278

(stating that we review interpretation of a statute in the context of the whole

statutory scheme to avoid absurd, illogical, or inconsistent results). We thus

consider the entire statutory scheme in interpreting section 1420-M(1) even though
 15

the Bureau’s amended petition explicitly alleged only a violation of section

1420-M(1).

[¶29] The Superintendent did not err in concluding that insurers may be

liable pursuant to 24-A M.R.S. § 1420-M(1) and in holding GTL accountable for

its failure to appoint Cinergy prior to October 20, 2008, when Cinergy was in fact

acting as its producer and GTL was accepting business that Cinergy sold.

C. GTL’s Provision of Coverage Pursuant to 24-A M.R.S. § 2412(1-A)(B)

[¶30] GTL argues that the Superintendent erred in finding that it violated

24-A M.R.S. § 2412(1-A)(B) because there was no evidence that GTL issued any

certificate of coverage, and therefore no evidence that it provided coverage, to any

Maine consumer, but that Cinergy instead issued AMLI certificates and coverage.13

[¶31] Section 2412(1-A)(B) states, in relevant part, that an “insurer may not

provide coverage to a resident of this State under a group or blanket policy or

contract issued and delivered outside this State unless,” for “association group

policies” as defined by statute, “certificates of coverage to be delivered or issued

for delivery in this State . . . [are] filed with the superintendent at least 60 days

before any solicitation in this State, with sufficient information . . . to enable the

13
GTL also argues that it should not be found in violation of 24-A M.R.S. § 2412(1-A)(B) for
coverage provided under the group policy it issued to NCE when NCE was an unapproved out-of-state
association in Maine because, under the Agreement, it was AMLI’s responsibility to get approval for the
NCE policy and because GTL instructed AMLI that no new coverage was to be issued when it learned of
that noncompliance. Even assuming that GTL delegated responsibility under the Agreement to AMLI to
ensure that NCE was a Maine-approved association, that does not relieve GTL of liability under section
2412(1-A)(B).
16

superintendent to determine whether the group satisfies the statutory requirements

for [an] . . . association group.” 24-A M.R.S. § 2412(1-A)(B)(1).

[¶32] Under the plain language of section 2412(1-A)(B), the consequential

fact for this appeal is whether GTL “provide[d] coverage” to Maine consumers

before filing sufficient information to show that NCE satisfied statutory

requirements. We affirm the Superintendent’s determination that it did. First,

despite evidence in the record that could lead to an alternate result, competent

evidence supports the Superintendent’s finding that GTL certificates of coverage

were issued to Maine insureds. See Bankers Life & Cas. Co., 2013 ME 7, ¶ 16,

60 A.3d 1272. This supports the conclusion that GTL provided coverage to Maine

insureds under section 2412(1-A). Regardless, section 2412(1-A) does not require

that GTL have issued certificates of coverage to be liable under that section.

Section 2412(1-A) instead precludes an insurer from “provid[ing] coverage to a

resident of this State” unless certain obligations have been met.

[¶33] GTL has admitted that it “assumed responsibility for handling the

claims and underwriting the insurance” for coverage in Maine under the Master

Policy it issued to NCE. Moreover, premiums from coverage sold under the

Master Policy to Maine consumers were attributed to GTL and GTL received a

portion of those premiums; pursuant to Cinergy’s telephone sales script, Cinergy

informed prospective Maine insureds that the coverage it was selling was
 17

underwritten by GTL; GTL paid out claims to Maine residents covered under the

Master Policy and insureds received statements of benefits that named GTL as the

payor; and Cinergy ads referenced the number of the Master Policy in ads

beginning in March 2008 and explicitly named GTL as a plan underwriter in ads

beginning in September 2008. Accordingly, the Superintendent did not err in

concluding that GTL “provide[d] coverage” to Maine residents and is liable under

section 2412(1-A)(B).14

D. Liability Pursuant to 24-A M.R.S. § 1902

[¶34] GTL argues that the Superintendent erred in concluding that it

violated 24-A M.R.S. § 1902 because the Bureau’s petition did not allege a

violation of that section, but alleged, as pertinent to this issue, a violation of

24-A M.R.S. § 2186(2), referencing section 2186(1)(A)(6) and (7) (2012) as well.

GTL argues that section 1902 cannot be considered a “lesser included offense” of

or covered by the allegation of a violation of section 2186(1)(A)(6), (2) and that

section 1902 is applicable only to insurance administrators and therefore cannot

apply to GTL.15

14
GTL asserts that the argument the Superintendent makes differs from the allegations in the Bureau’s
petition, but the Bureau sufficiently presented this basis for liability in its petition, and the Superintendent
made relevant findings and conclusions.
15
GTL also argues that it should not be penalized pursuant to 24-A M.R.S. § 1902 for AMLI’s
misconduct because AMLI breached the parties’ Agreement when it acted as an unlicensed administrator,
and, regardless, the penalty for a violation of section 1902 is limited to $1000, although we note that
section 1902 plainly caps the penalty only with respect to criminal fines. These arguments are without
merit, and we do not address them further.
18

[¶35] Due process requires that a party to an administrative action be on

notice as to the statutory provisions and issues involved in an adjudicatory

proceeding sufficient to provide an opportunity to adequately prepare and present

evidence. See 5 M.R.S. § 9052(1), (4) (2012) (stating that notice of hearing shall

include a “reference to the particular substantive statutory and rule provisions

involved” and a “short and plain statement of the . . . matters asserted”); see also

Berry v. Me. Pub. Utils. Comm’n, 394 A.2d 790, 793 n.4 (Me. 1978) (indicating

that due process in administrative proceedings requires that the party have notice

of the issues and relevant statutory provisions to adequately prepare and “present

evidence on any issue relevant to that proceeding”).

[¶36] The Bureau’s petition and amended petition alleged that GTL violated

24-A M.R.S. § 2186(1)(A)(6), (7), and 2186(2) for fraudulently contracting with

the unlicensed AMLI to act as the administrator under the Master Policy. The

Superintendent concluded that there was insufficient evidence to support a finding

of fraudulent intent to support a violation of section 2186. However, the Bureau’s

petition also cited and summarized section 1902 and alleged facts sufficient to

support a violation of that provision. Section 1902 provides in relevant part that

“[a] person may not act as or profess to be an administrator after August 1, 1990,

unless licensed under this chapter.” GTL was sufficiently on notice under the

petition, as incorporated by reference in the Superintendent’s order for
 19

adjudicatory proceeding and notice of hearing, that it could be held accountable

pursuant to section 1902 for contracting with an unlicensed administrator. And,

contrary to GTL’s contentions, the law and evidence support the Superintendent’s

determination of liability for violation of section 1902. See 24-A M.R.S. § 1902;

see also 24-A M.R.S. § 1906(10) (2012) (deeming the acts of an insurance

administrator to be those of the insurer); Eagle Rental, Inc., 2013 ME 48, ¶ 11,

65 A.3d 1278.

E. Timeliness of the Superintendent’s Decision

[¶37] Lastly, GTL argues that the Superintendent’s decision must be

vacated because she exceeded her statutory authority and jurisdictional limits when

she failed to comply with the timing requirements set forth in 24-A M.R.S.

§ 235(2) (2012) by issuing her decision weeks after the already-extended deadline

without good cause shown.

[¶38] Section 235(2) states that the Superintendent “shall make [her] order

on hearing” “[w]ithin 30 days after termination of a hearing . . . or within such

further reasonable period as the superintendent for good cause may require . . . .”

24-A M.R.S. § 235(2). In her timely order of February 23, 2011, the

Superintendent showed good cause for issuing her decision after the thirty-day

period. Though she expressed an intent to issue a decision by March 4, 2011, this

was not a definite date, and the Superintendent did not issue an untimely decision
20

pursuant to the plain language of section 235(2) and her February 2011 order when

she issued her decision on April 26, 2011.

[¶39] Regardless, imperfect compliance with section 235(2) is not grounds

to vacate a superintendent’s decision. Section 235(2) is directory and not

mandatory, see Anderson v. Comm’r of the Dep’t of Human Servs., 489 A.2d 1094,

1097-98 (Me. 1985), and deviation from the statutory requirement is not grounds

for dismissal of the petition or vacation of the decision. The Administrative

Procedure Act instead provides a remedy to parties “aggrieved by the failure” of an

agency to act. 5 M.R.S. § 11001(2) (2012). GTL did not avail itself of that

remedy.

The entry is:

Judgment affirmed.

On the briefs:

Sidney St. F. Thaxter, Esq., David P. Silk, Esq., and Benjamin M. Leoni,
Esq., Curtis Thaxter LLC, Portland, for appellant Guarantee Trust Life
Insurance Company

Janet T. Mills, Attorney General, and Andrew L. Black, Asst. Atty. Gen.,
Office of Attorney General, Augusta, for appellee Superintendent of
Insurance
 21

At oral argument:

Benjamin M. Leoni, Esq. for appellant Guarantee Trust Life Insurance
Company

Andrew L. Black, Asst. Atty. Gen. for appellee Superintendent of Insurance

Business and Consumer Docket docket number AP-12-9
FOR CLERK REFERENCE ONLY