45th legislature - STATE OF NEW MEXICO - second session, 2002

REQUESTING THE PUBLIC REGULATION COMMISSION, THE SUPERINTENDENT OF INSURANCE AND THE ATTORNEY GENERAL TO REVIEW THE NEW MEXICO INSURANCE CODE TO RECOMMEND CHANGES TO IMPROVE INSURANCE PROTECTION IN NEW MEXICO.

WHEREAS, changes in the nature of the life insurance industry, in the acquisition of domestic companies by foreign interests, in the elimination or reduction of the agent workforce and in the activities of certain companies in the maintenance and operation of their businesses have all compromised fiduciary obligations to policyholders and the financial integrity of policies; and

WHEREAS, in the wake of the Enron scandal, in which New Mexico alone suffered a fifty-five million dollar ($55,000,000) loss to its permanent fund, and stockholders and employees alike lost money and retirement funds, increased oversight appears appropriate; and

WHEREAS, President Bush and the congress recognize the seriousness of that impact and have commenced hearings and recommended action to prevent further erosion of public trust, invested retirement money and individual investments; and

WHEREAS, the legislature recognizes the severity of the problem created by the lack of oversight of business activities of this one company and shares the concern of the president and congress and their commitment to the public interest; and

WHEREAS, insurance is virtually unregulated nationally and what regulation there is, is on the state level; and

WHEREAS, there is no requirement within the New Mexico Insurance Code to direct regulated insurance companies to inform the superintendent of insurance of pending complaint actions in other states or other venues, including class action suits or regulatory or legal sanctions; and

WHEREAS, that requirement alone would foster increased awareness of these actions and their resolutions and provide the superintendent of insurance with a greater knowledge of national trends and an enhanced ability to spot conduct harmful to New Mexico policyholders and to join in causes of action in other states; and

WHEREAS, insurance activities in New Mexico generate over one hundred million dollars ($100,000,000) of revenue for the state and are vital for the security of risk management of those they represent, including the financial future of families, individuals and businesses; and

WHEREAS, these issues are of vital interest to the legislature;

NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the public regulation commission, the superintendent of insurance and the attorney general be requested to review the New Mexico Insurance Code and recommend changes to improve insurance protection in New Mexico; and

BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the public regulation commissioners, the superintendent of insurance and the attorney general.