Maine lawmakers have again declined a bill that would have allowed certain religious organizations to self-insure motor vehicles owned by the group and its members.
The legislation, introduced by Rep. Steven Foster (R-Dexter), was intended to accommodate groups such as the Mennonite church, whose members avoid traditional auto insurance based on religious beliefs.
Supporters of the proposal argued that existing state requirements mandating automobile coverage conflict with the practices of some religious communities. Foster said members of the Mennonite church first raised the issue with him in 2019, prompting his initial attempt to pass a version of the bill. He has since reintroduced it multiple times, citing growing interest.
The bill outlined several criteria for eligibility. Organizations would need to be federally recognized religious groups that have existed continuously since at least December 1950, own at least five vehicles in the state, and share a belief in mutual aid. They would also be required to provide evidence of financial stability to the state treasurer.
Foster testified that, following six years of research, he believes only the Mennonite church would qualify under the bill’s conditions. He noted that other states, including Kentucky, have similar allowances in place, although the Maine proposal featured more restrictive requirements.
During testimony, a member of the Mennonite community described a situation in which his son was found at fault in a vehicle accident resulting in a settlement exceeding $100,000. He said the amount was paid in full through church and individual contributions, without insurance.
Religious organizations in the United States have the option to self-insure, but this is subject to varying federal and state regulations.
At the federal level, certain religious sects can apply for exemptions from Social Security and Medicare taxes if they oppose insurance on religious grounds and meet specific criteria, such as being part of a recognized religious group that provides for its dependent members.
State regulations also differ significantly. For instance, Missouri requires religious groups seeking to self-insure to file Form 5689, a self-insurance affidavit.
In Louisiana, legislation has been enacted to establish a self-insurance fund specifically for churches and nonprofit religious organizations, providing a structured framework for these entities to manage their insurance needs collectively.
Similarly, Texas has introduced House Bill 3320 to create a self-insurance pool for religious institutions, allowing them to share risks and costs associated with insurance
The Maine Bureau of Motor Vehicles (BMV) opposed the bill, raising concerns about administrative burdens and legal ambiguities. Secretary of State Shenna Bellows wrote that the legislation did not clearly establish which state entity would assess the legitimacy of an organization’s religious beliefs or how such determinations would be made.
She also noted difficulties in tracking which individuals and vehicles would be covered at any given time.
The Bureau of Insurance also raised objections. Sandra Darby, a property/casualty actuary at the bureau, said the proposal would effectively assign insurance responsibilities to religious groups without proper oversight.
“Although we respect these beliefs, we are concerned that the bill would entrust religious organizations with the responsibilities of an insurer without the regulatory guardrails that keep insurers accountable to their insureds and to claimants,” Darby said in a report from AM Best.
Darby also noted that churches, unlike insurers, are not held to strict solvency standards.
“The fact that an organization is technically solvent — that is, its assets exceed its liabilities — is not a good indication that it will be able to pay the auto liability claims against a group of drivers if, in the future, those drivers cause significant losses to third parties” Darby said.
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