SB0108

SENATE BILL 108

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Stuart Ingle

AN ACT

RELATING TO INSURANCE; CHANGING THE TERMS "INSURANCE AGENT", "INSURANCE BROKER" AND "INSURANCE SOLICITOR" TO "INSURANCE PRODUCER"; INTRODUCING INSURANCE PRODUCER LICENSE RENEWAL AND FEE REQUIREMENTS; INTRODUCING LICENSING AND FEE REQUIREMENTS FOR INDEPENDENT REVIEW ORGANIZATIONS; INTRODUCING FILING FEES FOR CONTINUING EDUCATION PROVIDERS; INTRODUCING PENALTY FOR LATE NOTIFICATION OF CHANGE OF NAME OR ADDRESS; REVISING FEES; INCREASING CAPITAL, SURPLUS AND DEPOSIT REQUIREMENTS; CHANGING DEFINITIONS AND CLASSIFICATIONS OF INSURANCE; CHANGING INSURANCE LICENSING PROVISIONS; REQUIRING ADJUSTERS TO FULFILL CONTINUING EDUCATION REQUIREMENTS; REQUIRING APPLICANTS FOR AN ADJUSTER LICENSE TO PASS AN EXAMINATION; AMENDING, REPEALING AND ENACTING CERTAIN SECTIONS OF THE NEW MEXICO INSURANCE CODE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 59A-5-16 NMSA 1978 (being Laws 2007, Chapter 282, Section 1) is amended to read:

"59A-5-16. CAPITAL FUNDS, DEPOSITS, REQUIRED FOR CERTIFICATE OF AUTHORITY.--

A. To qualify for certificate of authority to transact any one kind or combination of kinds of insurance in this state, an insurer shall possess:

(1) if a stock insurer, paid-in capital stock and, when first so authorized, surplus all as shown in Schedule I of this section; or

(2) if a mutual, reciprocal or Lloyds insurer, basic capital surplus, including guaranty funds, if any, and additional unassigned surplus when first so authorized, as required under Schedule I of this section.

B. Except that an insurer that on January 1, 1985, having applied for a certificate on or before February 15, 1984, held a valid and subsisting certificate of authority to transact insurance in this state may, if a domestic insurer, continue to be so authorized until December 31, 1995, so long as otherwise qualified therefor and possessing paid-in capital stock, if a stock insurer, or basic capital surplus, if a mutual, reciprocal or Lloyds insurer, not less than that required of the insurer by the laws of this state in force on January 1, 1986; and if a foreign insurer, may so continue to be so authorized, if otherwise qualified therefor, while possessing such capital funds (paid-in capital stock and surplus if a stock insurer, and surplus if a mutual or reciprocal insurer) until December 31, 1990. At the expiration of such period, as applicable, the insurer shall meet the basic capital requirements of this section as set forth in Schedule I of this section in order to maintain its certificate of authority. Upon a change in the control of either a domestic insurer or foreign insurer, the insurer shall, within one year from effective date of such change of control, meet the capital funds requirements of Schedule I of this section as though a newly authorized insurer, but this sentence shall not act to extend the otherwise applicable time period. For the purposes of this subsection, "control" shall have the meaning ascribed in Section 59A-37-2 NMSA 1978.

C. The capital funds required for authority to transact insurance in this state shall be based upon all the kinds of insurance the insurer transacts, wherever transacted or to be transacted.

D. This section shall not apply as to domestic Lloyds plan insurers as identified in Chapter 59A, Article 38 NMSA 1978 except as stated in that article.

E. The capital requirements of this section are set forth in the following schedule:

Schedule I

NEW MEXICO

Minimum Capital, Surplus and Deposit Requirements

Property/Casualty Insurer

Premium Volume: Under $5 $5 to $10 $10 to $25 Over $25

Million Million Million Million

Number of Kinds of Insurance

1 2 [3

Basic Capital 500,000 600,000 700,000 800,000 900,000 1,000,000

Additional

Surplus 500,000 600,000 700,000 same as same as same as

Under Under Under

$5 Million $5 Million $5 Million

General Deposit 100,000 200,000 300,000 400,000 400,000 400,000

Special Deposit 100,000 200,000 300,000 same as same as same as

Under Under Under

$5 Million $5 Million $5 Million

Life/Health Insurer

Premium Volume: Under $5 $5 to $10 $10 to $25 Over $25

Million Million Million Million

Basic Capital 600,000 700,000 800,000 900,000

Additional Surplus 400,000 400,000 400,000 400,000

General Deposit 100,000 100,000 100,000 100,000

Special Deposit 100,000 100,000 100,000 100,000]

Basic Capital 500,000 600,000 800,000 900,000 1,000,000

Additional

Surplus 500,000 600,000 same as same as same as

Under Under Under

$5 Million $5 Million $5 Million

General Deposit 200,000 300,000 500,000 500,000 500,000

Special Deposit 200,000 300,000 same as same as same as

Under Under Under

$5 Million $5 Million $5 Million

Life/Health Insurer

Premium Volume: Under $5 $5 to $10 $10 to $25 Over $25

Million Million Million Million

Basic Capital 600,000 700,000 800,000 900,000

Additional Surplus 400,000 400,000 400,000 400,000

General Deposit 200,000 200,000 200,000 200,000

Special Deposit 200,000 200,000 200,000 200,000

Notes: Premium Volume means the insurer's worldwide direct premiums earned (if Property/Casualty) or received (if Life/Health) during the previous calendar year.

Kinds of insurance pertains to the general kinds of insurance that property/casualty insurers are authorized to transact. The following groups or single kinds of insurance shall be counted as one kind of insurance when calculating the amount of required Basic Capital,

Additional Surplus, General Deposit and Special Deposit:

Casualty [and/or Surety];

Property [and/or Marine & Transportation;

Vehicle]; and

Title.

When determining Basic Capital and Additional Surplus amounts, the kinds of Insurance shall be based on the insurer's actual or requested transaction authority Worldwide.

When determining General Deposit and Special Deposit amounts, the kinds of Insurance shall be based on the insurer's actual or requested transaction authority in New Mexico.

"Basic Capital" means paid-in capital stock (if a stock insurer) or basic capital surplus (if a mutual, reciprocal or Lloyds insurer).

General Deposit or Special Deposit funds are included within, and are not additional to, required Basic Capital and Additional Surplus.

General Deposit amounts shown above are not applicable to alien insurers."

SECTION 2. Section 59A-6-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 101, as amended) is amended to read:

"59A-6-1. FEE SCHEDULE.--The superintendent shall collect the following fees:

A. insurer's certificate of authority -

(1) filing application for certificate of authority, and issuance of certificate of authority, [if issued] including filing of all charter documents, financial statements, service of process, power of attorney, examination reports and other documents included with and part of the application

. . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,000.00

(2) annual continuation of certificate of authority, per kind of insurance. . . . . . . . . . . . . .200.00

(3) reinstatement of certificate of authority (Section 59A-5-23 NMSA 1978). . . . . . . . . . . . . . . .150.00

(4) amendment to certificate of

authority. . . . . . . . . . . . . . . . . . . . . . . . . 200.00

B. charter documents - filing amendment to any charter document (as defined in Section 59A-5-3 NMSA 1978). 10.00

C. annual statement of insurer, filing. . . . .200.00

D. service of process, acceptance by superintendent and issuance of certificate of service [where issued]. . . .10.00

E. [agents'] producer licenses and appointments -

(1) filing application for original [agent] producer license and issuance of license [if issued]. . . . 30.00

(2) biennial continuation of license. . . 60.00

[(2)] (3) appointment of [agent] producer -

(a) filing appointment, per kind of insurance, each insurer. . . . . . . . . . . . . . . . . . .20.00

(b) annual continuation of appointment, per kind of insurance, each insurer. . . . . . . . . . . . .20.00

[(3) variable annuity agent's license -

(a) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . . 30.00

(b) annual continuation of appointment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00]

(4) temporary license filing application. 30.00

[(a) as to life and health insurance or

both. . . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(b) as to property insurance. . . . .30.00

(d) as to vehicle insurance. . . . .30.00]

F. agency business entity license and affiliations-

(1) filing application for original agency business entity license and issuance of license [if issued]

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(2) biennial continuation of license. . . 60.00

[(2)] (3) filing of individual affiliation [per kind of insurance] . . . . . . . . . . . . . . . . . . . . .20.00

[(3)] (4) annual continuation of individual affiliation. . . . . . . . . . . . . . . . . . . . . . . . .20.00

[G. solicitor license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . . . . 30.00

(2) annual continuation of appointment, per kind of insurance. . . . . . . . . . . . . . . . . . . . . 20.00

H. broker license -

(1) filing application for license and issuance of original license, if issued. . . . . . . . . . . . . . . 30.00

(2) annual continuation of license. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

I.] G. insurance vending machine license -

(1) filing application for original license and issuance of license, [if issued] each machine. . . . . . . .25.00

(2) [annual] biennial continuation of license, each machine. . . . . . . . . . . . . . . . . . . . [25.00] 50.00

[J.] H. examination for license, application for examination conducted directly by the superintendent, each grouping of kinds of insurance to be covered by the examination as provided by the superintendent's rules, and payable as to each instance of examination. . . . . . . . . . . . . . .[50.00] 75.00

[K.] I. surplus lines insurer - filing application for qualification as eligible surplus lines insurer. . . 1,000.00

[L.] J. surplus lines broker license -

(1) filing application for original license and issuance of license [if issued]. . . . . . . . . . . . . . 100.00

(2) [annual] biennial continuation of license.

. . . . . . . . . . . . . . . . . . . . . . . . . [100.00] 200.00

[M.] K. surplus lines [broker] brokerage business entity license and affiliations -

(1) filing application for original surplus lines brokerage business entity license and issuance of license [if issued]. . . . . . . . . . . . . . . . . . . . . . . . 100.00

(2) filing of individual affiliation [per kind of insurance]. . . . . . . . . . . . . . . . . . . . . . . .20.00

(3) annual continuation of individual affiliation. . . . . . . . . . . . . . . . . . . . . . . . .20.00

[N.] L. adjuster license -

(1) filing application for original license and issuance of license [if issued]. . . . . . . . . . . . . . .30.00

(2) [annual] biennial continuation of

license. . . . . . . . . . . . . . . . . . . . . . [30.00] 60.00

[O.] M. insurance consultant license -

(1) filing application for original license and issuance of license [if issued] . . . . . . . . . . . . . . 50.00

(2) application examination. . . .[10.00] 75.00

(3) biennial continuation of license. . .100.00

[P.] N. viatical settlements license -

(1) providers -

(a) filing application for original license and issuance of license [if issued] . . . . . . .1,000.00

(b) [annual] biennial continuation of

license . . . . . . . . . . . . . . . . . . . . . [200.00] 400.00

(2) brokers -

(a) filing application for original license and issuance of license [if issued] . . . . . . . .100.00

(b) [annual] biennial continuation of

license . . . . . . . . . . . . . . . . . . . . . [100.00] 200.00

(3) brokerages -

(a) filing application for original business entity license and issuance of license [if issued] . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00

(b) [annual] biennial continuation of

license. . . . . . . . . . . . . . . . . . . . . .[20.00] 200.00

(d) annual continuation of individual affiliation . . . . . . . . . . . . . . . . . . . . . . . . 20.00

[Q. rating organization or rating] O. advisory organization license -

(1) filing application for license and issuance of license [if issued]. . . . . . . . . . . . . . . . . . .100.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . .100.00

[R.] P. nonprofit health care plans -

(1) filing application for preliminary permit and issuance of permit [if issued]. . . . . . . . . . . . .100.00

(2) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(3) annual statement, filing. . . . . . .200.00

[(4) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of examination 50.00

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20.00

S.] Q. prepaid dental plans -

(1) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(2) annual report, filing. . . . . . . . 200.00

[(3) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of examination 50.00

T.] R. prearranged funeral insurance - application for certificate of authority, issuance, continuation, reinstatement, charter documents, filing annual statement, licensing of sales representatives - same as for insurers

[U.] S. premium finance companies -

(1) filing application for original license and issuance of license [if issued]. . . . . . . . . . . . . . 100.00

(2) annual renewal of license. . . . . . 100.00

[V.] T. motor clubs -

(1) certificate of authority -

(a) filing application for original certificate of authority and issuance of certificate of authority [if issued]. . . . . . . . . . . . . . . . . . . . . . . . 200.00

(b) annual continuation of certificate of authority. . . . . . . . . . . . . . . . . . . . . . . . . 100.00

(2) sales representatives -

(a) filing application for registration or license and issuance of registration or license, [if issued] each representative. . . . . . . . . . . . . . . . . . . [20.00] 30.00

(b) [annual] biennial continuation of registration or license, each representative. . . . [20.00] 60.00

[W.] U. bail bondsmen -

(1) filing application for original license as bail bondsman or solicitor, and issuance of license [if issued]

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(2) examination for license, [conducted directly by superintendent] each instance of examination. . 50.00

(3) [annual] biennial continuation of

[appointment] license. . . . . . . . . . . . . . . .[20.00] 60.00

[X. securities salesperson license -

(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . . . . . . .25.00

(2) annual renewal of license. . . . . . .25.00

Y.] V. required filing of forms or rates - by all lines of business other than property or casualty -

(1) rates. . . . . . . . . . . . . . . . .50.00

(2) major form - each new policy and each package submission, which can include multiple policy forms, application forms, rider forms, endorsement forms or amendment forms. . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00

(3) incidental forms and rates - forms filed for informational purposes; riders, applications, endorsements and amendments filed individually; rate service organization reference filings; rates filed for informational purposes. .15.00

[Z.] W. health maintenance organizations -

(1) filing an application for a certificate of authority. . . . . . . . . . . . . . . . . . . . . . . . 1,000.00

(2) annual continuation of certificate of authority. . . . . . . . . . . . . . . . . . . . . . . . . 200.00

(3) filing each annual report . . . . 200.00

(4) filing an amendment to organizational documents requiring approval. . . . . . . . . . . . . . . .200.00

(5) filing informational amendments. . . .50.00

[(6) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . . 30.00

(b) examination for license, each instance of examination. . . . . . . . . . . . . . . . . . . . . . .50.00

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20.00

AA.] X. purchasing groups and foreign risk retention groups -

(1) original registration. . . . . . . . 500.00

(2) annual continuation of

registration. . . . . . . . . . . . . . . . . . . . . . . .200.00

(3) [agent or broker] producer fees - same as for authorized insurers

[BB.] Y. third party administrators -

(1) filing application for original [individual] business entity insurance administrator license . .

. . . . . . . . . . . . . . . . . . . . . . . . . [30.00] 100.00

[(2) filing application for original officer, manager or partner insurance administrator license. . . . . 30.00

(3) annual] (2) biennial continuation or renewal of license. . . . . . . . . . . . . . . . .[30.00] 200.00

[(4)] (3) examination for license [conducted directly by the superintendent], each examination. . . . . .75.00

[(5)] (4) filing of annual report. . . . .50.00

[CC.] Z. miscellaneous fees -

(1) duplicate license . . . . . . . . . . 30.00

(2) name change . . . . . . . . . . . . . 30.00

(3) for each signature and seal of superintendent affixed to any instrument . . . . . . . . . .10.00

[DD.] AA. pharmacy benefits managers -

(1) filing an application for a

license. . . . . . . . . . . . . . . . . . . . . . . . . 1,000.00

(2) annual continuation of license, each year continued. . . . . . . . . . . . . . . . . . . . . . . . . 500.00

(3) filing each annual report. . . . . . 200.00

(4) filing an amendment to organizational

documents requiring approval. . . . . . . . . . . . . . . .200.00

(5) filing informational amendments. . . 100.00

[(6) agents -

(a) filing application for original

license and issuance of license, if issued. . . . . . . . .100.00

(b) annual continuation of license

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .100.00.]

BB. independent review organizations

(1) filing an application for a license. 250.00

(2) biennial continuation of license . . 100.00

CC. continuing education providers

(1) filing an application for a course of instruction. . . . . . . . . . . . . . . . . . . . . . . . .80.00

(2) biennial continuation of course of instruction. . . . . . . . . . . . . . . . . . . . . . . . 40.00.

An insurer shall be subject to additional fees or charges, termed retaliatory or reciprocal requirements, whenever form or rate-filing fees in excess of those imposed by state law are charged to insurers in New Mexico doing business in another state or whenever a condition precedent to the right to issue policies in another state is imposed by the laws of that state over and above the conditions imposed upon insurers by the laws of New Mexico; in those cases, the same form or rate-filing fees may be imposed upon an insurer from another state transacting or applying to transact business in New Mexico so long as the higher fees remain in force in the other state. If an insurer does not comply with the additional retaliatory or reciprocal requirement charges imposed under this subsection, the superintendent may refuse to grant or may withdraw approval of the tendered form or rate filing.

All fees are earned when paid and are not refundable."

SECTION 3. Section 59A-6-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 106, as amended) is amended to read:

"59A-6-6. PREEMPTION AND IN LIEU PROVISION.--The state government of New Mexico preempts the field of taxation of insurers, nonprofit health care plans, health maintenance organizations, prepaid dental plans, prearranged funeral plans and insurance [agents and solicitors] producers as such, and payment of the taxes, licenses and fees provided for in the Insurance Code shall be in lieu of all other taxes, licenses and fees of every kind now or hereafter imposed by this state or any political subdivision thereof on any of the foregoing specified entities, excepting the regular state, county and city taxes on property located in New Mexico and excepting the income tax on [agents and solicitors. As used in this section, "agent" does not include insurance adjusters] insurance producers. No provision of law enacted after January 1, 1985 shall be deemed to modify this provision except by express reference to this section."

SECTION 4. Section 59A-7-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 107) is amended to read:

"59A-7-1. DEFINITIONS NOT MUTUALLY EXCLUSIVE--INSURING POWERS--CLASSIFICATION OF INSURERS.--

A. It is intended that certain insurance coverages may come within more than one "kind" of insurance as defined in [this article] Chapter 59A, Article 7 NMSA 1978, and inclusion of such coverage within one definition shall not exclude it as to any other kind of insurance within the definition of which the coverage is likewise reasonably includable.

B. No insurer shall be authorized to transact any kind or kinds of insurance other than those defined in [this article] Chapter 59A, Article 7 NMSA 1978. Insurers shall be classified as to insuring powers according to kind or kinds of insurance for which so authorized.

C. An insurer may apply to engage in insurance activities in one or more of the following lines of insurance:

(1) life and annuities;

(2) accident and health;

(3) property;

(4) casualty; and

(5) variable life and annuity."

SECTION 5. Section 59A-7-2 NMSA 1978 (being Laws 1984, Chapter 127, Section 108, as amended) is repealed and a new Section 59A-7-2 NMSA 1978 is enacted to read:

"59A-7-2. [NEW MATERIAL] LIFE AND ANNUITY.--Life and annuity includes:

A. fixed annuity;

B. immediate annuity;

C. deferred annuity;

D. equity-indexed annuity;

E. endowment;

F. term life;

G. universal life;

H. whole life;

I. credit life; and

J. similar products relating to life and annuity matters."

SECTION 6. Section 59A-7-3 NMSA 1978 (being Laws 1984, Chapter 127, Section 109, as amended) is repealed and a new Section 59A-7-3 NMSA 1978 is enacted to read:

"59A-7-3. [NEW MATERIAL] ACCIDENT AND HEALTH INSURANCE.--Accident and health includes:

A. accident;

B. accidental death and dismemberment;

C. blanket accident and sickness;

D. credit health;

E. critical illness;

F. dental;

G. disability income;

H. home health care;

I. hospital indemnity;

J. long-term care;

K. major medical;

L. medical expense;

M. medicare supplement;

N. prescription drug;

O. sickness;

P. specified disease;

Q. vision; and

R. similar products relating to accident and health matters."

SECTION 7. Section 59A-7-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 110) is repealed and a new Section 59A-7-4 NMSA 1978 is enacted to read:

"59A-7-4. [NEW MATERIAL] PROPERTY.--Property includes:

A. aircraft cargo;

B. aircraft hull;

C. auto commercial physical damage;

D. baggage;

E. builders risk;

F. business owners;

G. cargo;

H. commercial inland marine;

I. commercial multi-peril;

J. commercial property;

K. crop;

L. crop hail;

M. difference in conditions;

N. dwelling;

O. earthquake;

P. event cancellation;

Q. extended coverages;

R. farm and ranch property;

S. fire and allied lines;

T. flood;

U. garage;

V. marine cargo;

W. marine hull;

X. ocean marine;

Y. personal inland marine;

Z. personal property;

AA. pet insurance;

BB. travel coverage; and

CC. similar products relating to property matters."

SECTION 8. Section 59A-7-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 112) is repealed and a new Section 59A-7-6 NMSA 1978 is enacted to read:

"59A-7-6. [NEW MATERIAL] CASUALTY.--Casualty includes:

A. aircraft liability;

B. auto commercial liability;

C. auto private passenger liability;

D. auto warranty contract;

E. boiler and machinery;

F. burglary and theft;

G. collateral protection;

H. commercial excess/umbrella liability;

I. commercial general liability;

J. congenital defects;

K. contractual liability;

L. credit;

M. credit property;

N. creditor-placed dual/single interest;

O. crime;

P. directors and officers liability;

Q. employers liability;

R. elevator;

S. entertainment;

T. errors and omissions;

U. failure to file instrument;

V. farm and ranch liability;

W. fidelity bonds;

X. fidelity insurance;

Y. financial guaranty;

Z. gap;

AA. garage liability;

BB. glass;

CC. involuntary unemployment;

DD. kidnap and ransom;

EE. leakage and fire-extinguishing equipment;

FF. legal liability;

GG. liquor liability;

HH. livestock;

II. mechanical breakdown;

JJ. medical malpractice;

KK. mobile homes under transport;

LL. money and securities;

MM. motor club service contracts;

NN. mortgage guaranty;

OO. personal excess/umbrella liability;

PP. personal effects;

QQ. personal liability;

RR. personal property floater;

SS. pollution liability;

TT. premises and operations;

UU. product liability;

VV. products and completed operations;

WW. professional liability;

XX. owners and contractors;

YY. stop loss liability;

ZZ. surety;

AAA. title;

BBB. vandalism and malicious mischief;

CCC. workers' compensation; and

DDD. similar products relating to casualty matters."

SECTION 9. Section 59A-7-7 NMSA 1978 (being Laws 1984, Chapter 127, Section 113) is repealed and a new Section 59A-7-7 NMSA 1978 is enacted to read:

"59A-7-7. [NEW MATERIAL] VARIABLE LIFE AND ANNUITY.--Variable life and annuity includes:

A. variable deferred annuity;

B. variable immediate annuity;

C. variable life; and

D. similar products relating to variable life and annuity matters."

SECTION 10. Section 59A-9-12 NMSA 1978 (being Laws 1984, Chapter 127, Section 145, as amended) is amended to read:

"59A-9-12. INVESTMENTS IN SUBSIDIARIES.--

A. An insurer either by itself or in cooperation with one or more other business entities, may organize or acquire one or more subsidiaries engaged or to be engaged in any of the following businesses:

(1) an insurance business authorized by the jurisdiction in which the subsidiary is incorporated;

(2) acting as insurance [broker or insurance agent] producer for its parent or for any of its parent's insurer subsidiaries;

(3) investing, reinvesting or trading in securities for its own account, that of its parent, any subsidiary of its parent or any affiliate or subsidiary;

(4) management of any investment company registered pursuant to the federal Investment Company Act of 1940, as amended, including related sales and services;

(5) acting as a broker-dealer registered pursuant to the federal Securities Exchange Act of 1934, as amended;

(6) rendering investment advice to governments, government agencies, corporations or other organizations or groups;

(7) rendering other services related to operations of an insurance business;

(8) owning and managing assets that the parent corporation could itself own or manage;

(9) acting as administrative agent for a government instrumentality that is performing an insurance function; or

(10) financing insurance premiums, agents and other forms of consumer financing; and

(11) any other business activity determined by the superintendent to be reasonably ancillary to an insurance business.

B. In addition to investments in common stock, preferred stock, debt obligations and other securities permitted under all other sections of Chapter 59A, Article 9 NMSA 1978 an insurer may also:

(1) invest, in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries, amounts which unless otherwise approved by the superintendent do not exceed the lesser of ten percent of the insurer's assets or fifty percent of the insurer's surplus as regards policyholders, if, after the investments, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs. In calculating the amount of the investments, there shall be included:

(a) total net money or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary, whether or not represented by the purchase of capital stock or the issuance of other securities; and

(b) all amounts expended in acquiring additional common stock, preferred stock, debt obligations and other securities and all contributions to the capital and surplus of a subsidiary subsequent to its acquisition or formation;

(2) if the insurer's total liabilities, as calculated for annual statement purposes, are less than ten percent of assets, invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries, if, after the investment, the insurer's surplus as regards policyholders, considering the investment as if it were a disallowed asset, will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs;

(3) invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries, if each subsidiary agrees to limit its investments in any asset so that the investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in Paragraph (1) of this subsection or in Chapter 59A, Article 9 NMSA 1978, applicable to the insurer. For the purpose of this paragraph "the total investment of the insurer" includes:

(a) any direct investment by the insurer in an asset; and

(b) the insurer's proportionate share of any investment in an asset by any subsidiary of the insurer, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the insurer's ownership of the subsidiary;

(4) with the approval of the superintendent, invest any amount in common stock, preferred stock, debt obligations or other securities of one or more subsidiaries, if, after the investment, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; and

(5) invest any amount in the common stock, preferred stock, debt obligations or other securities of any subsidiary exclusively engaged in holding title to, or holding title to and managing or developing, real or personal property, if, after considering as a disallowed asset so much of the investment as is represented by subsidiary assets, which if held directly by the insurer would be considered as a disallowed asset, the insurer's surplus as regards policyholders will be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, and if, following such investment, all voting securities of such subsidiary would be owned by the insurer.

C. Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made pursuant to Subsection B of this section shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in this article applicable to the investments of the insurer.

D. Whether any investment made pursuant to Subsection B of this section meets the applicable requirements thereof is to be determined immediately after the investment is made, taking into account the then outstanding balance on all previous investments in debt obligations and the value of all previous equity securities as of the date they were made.

E. If an insurer ceases to control a subsidiary, it shall dispose of any investment made in it pursuant to this section within three years from time of the cessation of control or within such further time as the superintendent may prescribe, unless at any time after the investment is made, the investments meet the requirements for investment under any other section of the Insurance Code, and the insurer has so notified the superintendent."

SECTION 11. Section 59A-11-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 180) is amended to read:

"59A-11-1. SCOPE OF ARTICLE.--

A. [This article] Chapter 59A, Article 11 NMSA 1978 provides [as to] procedures [in] for licensing insurance [agents, solicitors, brokers] producers, surplus line brokers and adjusters; agents of prepaid dental plans; agents [and solicitors] of nonprofit health care plans; bail bondsmen and their solicitors; registration of motor club representatives; licensing of insurance securities salespersons; and applications for, qualifying examinations, and issuance of, duration, continuation, and termination of all such licenses and registrations. For the purposes of [this] that article, all such licenses and registrations are referred to as "licenses".

B. [This article] Chapter 59A, Article 11 NMSA 1978 shall also apply [as] to all additional categories of persons operating in insurance fields and related fields as administrators, consultants, appraisers, or in whatever similar capacity, under laws now or hereafter enacted, the

licensing and supervision of whom is delegated [by such laws] to the superintendent.

C. Definitions, requirement of licenses, qualifications for license, and other requirements and provisions as to [such agents, solicitors, brokers] insurance producers, adjusters, bail bondsmen and their solicitors, motor club representatives, and other categories referred to in Subsection B [above] of this section, shall be as provided in subsequent articles in the Insurance Code now or hereafter respectively dealing with such categories; provided that "insurance producer" means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance."

SECTION 12. Section 59A-11-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 183) is amended to read:

"59A-11-4. TEMPORARY LICENSES.--

A. Where temporary license is otherwise provided for in the Insurance Code as to a particular category of licensee, application therefor shall be made in the same manner as applies to permanent license under [this article] Chapter 59A, Article 11 NMSA 1978 with such modification therein as the superintendent may prescribe, and without payment of examination fee.

B. The superintendent may issue a temporary insurance producer license for a period not to exceed one hundred eighty days without requiring an examination if the superintendent deems that the temporary license is necessary for the servicing of an insurance business in accordance with the Insurance Code."

SECTION 13. Section 59A-11-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 185) is amended to read:

"59A-11-6. EXAMINATION OF APPLICANT.--Where [the] an applicant for a license is required to take and pass an examination prior to issuance of a license, [applied for such examinations] the examination shall be subject to the following provisions:

A. the examination shall be made available to applicants for particular licenses at least once each month at [place or] places within New Mexico [of convenience] designated by the superintendent;

[B. the examination shall be prepared by or under authorization of the superintendent and be of such scope as reasonably to test applicant's knowledge of business proposed to be transacted under the license applied for, of his responsibilities as a licensee and general competence;

C.] B. the examination shall require [written] answers of the applicant to questions asked. If the applicant [so] requests, the examination shall be administered in the Spanish language;

[D.] C. all examinations shall be [given] conducted and graded in a fair and impartial manner and without unfair discrimination as between individuals examined;

[E. an applicant shall not be deemed to have passed the examination unless receiving]

D. a grade [thereon] of not less than seventy [(70)] is a passing grade;

[F. any] E. an individual who has failed to pass an examination may take another [such] examination at any subsequent scheduled examination date, except that an individual who has taken and failed to pass [two (2) such] four of the same examinations shall not be entitled to take another [such] examination [within thirty (30) days] until after six months after the date of the last examination failed; [and if thereafter the individual fails to pass two (2) more such examinations, the individual shall not be eligible to take any further such examination until after six (6) months from date of last examination failed;

G.] F. an examination application fee, in the amount stated in Section [101 (fee schedule) of the Insurance Code] 59A-6-1 NMSA 1978, or as provided for under [Paragraph I below] Subsection H of this section, shall be paid [as to] for each [instance of] examination;

[H.] G. the superintendent may [at discretion] cause to be prepared and made available to applicants a manual showing the general type and scope of the examination [as to] for any license for which examination is required; [and

I. in lieu of preparing, conducting and grading examinations through insurance department personnel]

H. the superintendent may [contract with an established independent agency experienced therein for preparation, conduct and grading of] make arrangements, including contracting with an outside testing service, for administering examinations and [in such case the examination fee shall be in reasonable amount as fixed by the superintendent and payable to the examination agency. The examination in such instance shall be prepared, conducted and graded subject to the same requirements and standards as would apply to examination by the superintendent direct] collecting the nonrefundable fee set forth in Section 59A-6-1 NMSA 1978;

I. examinations shall be developed and conducted under rules promulgated by the superintendent;

J. each individual applying for an examination shall submit a nonrefundable fee as prescribed by the superintendent as set forth in Section 59A-6-1 NMSA 1978;

K. an individual who fails to appear for the examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination; and

L. a resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to Section 59A-12-16 NMSA 1978. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and rules of this state."

SECTION 14. Section 59A-11-8 NMSA 1978 (being Laws 1984, Chapter 127, Section 187, as amended) is amended to read:

"59A-11-8. ISSUANCE [REFUSAL OF] OR REFUSAL TO ISSUE OR RENEW LICENSE.--

A. If the superintendent finds that the application is complete, that the applicant has passed all required examinations and is otherwise qualified for the license applied for, the superintendent shall promptly issue, or permit the issuance of, the license. [Otherwise, the superintendent shall refuse to issue, or to permit the issuance of, the license and shall promptly notify the applicant and the appointing insurer, employer or principal, where applicable, of the refusal and state the grounds for refusal.]

B. If the superintendent denies an application for initial issuance or renewal of a license, the superintendent shall notify the applicant in writing and advise the applicant of the reason for the denial.

C. Within thirty days of the date of issuance of the denial of an application for initial issuance or renewal of a license, the applicant may request in writing a hearing on the denial. The hearing shall be held within thirty days and shall be held pursuant to the requirements of the Insurance Code.

D. The license of a business entity may be suspended, revoked or refused if the superintendent finds after hearing that an individual licensee's violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the superintendent nor corrective action taken."

SECTION 15. Section 59A-11-9 NMSA 1978 (being Laws 1984, Chapter 127, Section 188) is amended to read:

"59A-11-9. LICENSE CONTENTS--NUMBER REQUIRED.--

A. The license issued by the superintendent under [this article] Chapter 59A, Article 11 NMSA 1978 shall [state] contain the licensee's name [of the licensee and residence], business address [if an individual, or business address if a firm or corporation or a place of business is otherwise required of the licensee, the capacity in which the licensee is to act and the kind of business covered], personal identification number, date of issue [of license], lines of authority, expiration date and [such] any other information [as] the superintendent [deems pertinent and consistent with law] requires.

B. The license of an insurance [agent] producer shall not specify the name of any particular insurer or underwriter's department by which the licensee is appointed, [except as to certain limited licenses] and the licensee may represent as agent under the one license as many insurers or underwriter's departments as may appoint [him] the licensee as agent under the Insurance Code subject to Section [192 of this article] 59A-11-13 NMSA 1978 as to certain life or health insurance [agents] producers having unsettled debit balances with an insurer previously represented.

[C. The license of a solicitor shall show also the name and address of the employer to be represented.

D.] C. The license of a [firm or corporation] business entity shall also [state, or] record [by endorsement attached thereto] the name of each individual authorized to exercise the license powers. [At the superintendent's discretion the name of such an] The superintendent may require the names of each individual [may] to be registered with the office of superintendent of insurance. [department in lieu of shown or endorsed on the license.

E. Each limited license issued under Section 219 of the Insurance Code shall show also the name of the insurer so represented, and a separate license shall be required as to each such insurer.]"

SECTION 16. Section 59A-11-10 NMSA 1978 (being Laws 1984, Chapter 127, Section 189, as amended) is amended to read:

"59A-11-10. CONTINUATION, EXPIRATION OF LICENSE.--

[A. Each license, other than insurance agent, issued under this article shall continue in force until it is suspended, revoked or otherwise terminated, but except as may be provided pursuant to Section 59A-11-11 NMSA 1978, subject to payment to the superintendent annually on or before April 1, or December 31 as to motor club representatives, of the applicable continuation fee specified in Section 59A-6-1 NMSA 1978 accompanied by request for such continuation:

(1) for broker, surplus line broker, independent adjuster, bail bondsman license and similar other independent licensees, request shall be made and signed by the licensee;

(2) for agent (other than insurance agent) or staff adjuster, or solicitor license, request shall be made and signed by the employer or other principal, as applicable; or

(3) for vending machine, request shall be made and signed by the supervisory agent thereof.

B. Subject to Section 59A-11-11 NMSA 1978, any license referred to in Subsection A of this section, not so continued shall be deemed to have terminated as of midnight on April 30, or December 31 as to motor club representatives, then current; except that the superintendent may effectuate a request for continuation received within thirty days thereafter if accompanied by annual continuation fee equal to one hundred fifty percent of the continuation fee otherwise required.

C. Within sixty days of obtaining an agent license, the licensee shall become appointed by an authorized insurer to act as its agent; otherwise the license shall expire. A person shall not act as an agent of an insurer unless the person becomes appointed as an agent of the insurer. Within fifteen days from the date an agency contract is executed or the first insurance application from the person is accepted by the insurer, the insurer shall file a notice of appointment on a form approved by the superintendent. The agent or the insurer may terminate an appointment by notifying the superintendent and the other party in writing of the termination. If at any time all of the licensee's appointments have been terminated for a period of sixty days, the agent's license shall expire.]

A. The term of the license shall be perpetual, contingent upon payment of fees and completion of any continuing education requirements.

B. Individual licenses shall renew and continue on a biennial basis on the last day of the licensee's month of birth. Business entity licenses shall renew and continue on a biennial basis on March 1 of the biennial year; except for those types of business entity licenses that, pursuant to Section 59A-6-1 NMSA 1978, renew and continue on an annual basis, in which case those licenses shall renew and continue on March 1 of every year. Business entity affiliations shall renew and continue on an annual basis on March 1 of every year.

C. Any license referred to in this section that is not so continued shall be deemed to have terminated as of midnight on the last day of the licensee's month of birth if an individual license and as of midnight of March 1 if a business entity license; except that the superintendent may effectuate a request for continuation received within thirty days thereafter if accompanied by a continuation fee equal to one hundred fifty percent of the continuation fee otherwise required.

D. If the superintendent has reason to believe that the competence of any licensee, or individual designated to exercise license powers, is questionable, the superintendent may require as condition [to] of continuation of the license or license powers that the licensee or individual take and pass [to the superintendent's satisfaction] a written examination as required under the Insurance Code of new individual applicants for [similar] the same license.

E. This section shall not apply as to temporary licenses, which shall be for such duration and subject to extension as provided in the respective sections of the Insurance Code by which such licenses are authorized.

F. All licenses and appointments [as to] of an insurer or other principal [which] that ceases to be authorized to transact business in this state shall automatically terminate without notice as of date of such cessation.

G. A license shall [also] terminate upon death of the licensee, if an individual, or dissolution, if a corporation, or change in [partnership members] partners, if a [firm; subject, in case of a firm to continuation of] partnership; provided that, in the case of a partnership, the license may be continued for a reasonable period while application for new license is being made or pending, [under reasonable conditions] as provided [in regulations of the superintendent] by rule."

SECTION 17. Section 59A-11-12 NMSA 1978 (being Laws 1984, Chapter 127, Section 191) is amended to read:

"59A-11-12. APPOINTMENT OF [AGENTS] INSURANCE PRODUCER--CONTINUATION.--

[A. Each insurer or other principal appointing an agent in this state shall file with the superintendent a written appointment specifying the name and address of the appointee and the kinds of insurance or business to be transacted by the agent and pay the appointment fee, or license fee, as the case may be, as specified in Section 101 (fee schedule) of the Insurance Code.

B. Subject to continuation by the insurer or principal as provided in Section 189 of this article, each appointment shall remain in effect until the agent's license is revoked or otherwise terminated, or there is earlier termination of the appointment.

C. Not later than thirty (30) days prior to date set under this article for continuation of appointments of agents, the insurer or other principal shall file with the superintendent an alphabetical list of all its agents in this state whose appointments or licenses are continued as to kinds of insurance or business then covered by the appointments or licenses, together with payment of the applicable continuation fees specified in Section 101 (fee schedule) of the Insurance Code.

At the same time the insurer or principal shall file with the superintendent an alphabetical list of all appointments or licenses not being continued, or to be modified as to kinds of insurance or business to be transacted, with payment of applicable continuation fees as to appointments or licenses being so modified. Any appointment or license not so continued and not otherwise expressly terminated shall be deemed to have expired at midnight on date specified therefor under Section 189 of this article, or pursuant to the superintendent's regulations as provided in Section 190 of this article.]

A. An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed insurance producer of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed.

B. To appoint an insurance producer as its agent, the appointing insurer shall file in a format approved by the superintendent a notice of appointment within fifteen days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint an insurance producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.

C. Upon receipt of the notice of appointment, the superintendent shall verify within a reasonable time not to exceed thirty days that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the superintendent shall notify the insurer within five days of its determination.

D. An insurer shall pay a filing appointment fee in the amount and method of payment set forth in Section 59A-6-1 NMSA 1978 for each insurance producer appointed by the insurer.

E. An insurer shall remit in a manner prescribed by the superintendent a continuation of appointment fee in the amount set forth in Section 59A-6-1 NMSA 1978.

F. Appointments shall be continuous subject to payment of any applicable fees. Fees shall be calculated as of a date certain."

SECTION 18. Section 59A-11-13 NMSA 1978 (being Laws 1984, Chapter 127, Section 192, as amended) is amended to read:

"59A-11-13. [AGENTS'] INSURANCE PRODUCERS' RIGHTS--CANCELLATION.--

A. No insurer shall terminate a contract appointing [any person] an individual as an independent [agent] insurance producer without giving the [agent] insurance producer written notice of the termination, including the specific reason for such action, at least one hundred eighty days prior to the termination.

B. Notwithstanding the provisions of Subsection A of this section, no insurer may cancel a written agreement with an [agent] insurance producer with respect to property or casualty insurance because of an adverse loss-ratio experience on that [agent's] insurance producer's book of business during any three full consecutive calendar years if:

(1) the insurer required the [agent] insurance producer to submit the application for underwriting approval, all material information on the application was fully completed and the [agent] insurance producer had not omitted or altered any information provided by the applicant; or

(2) the insurer accepted without prior approval policies issued by the [agent] insurance producer, if all material information on the application or on the insurer's copy of any policy issued by the [agent] insurance producer was fully completed and the [agent] insurance producer had not omitted or altered any information provided by the applicant.

C. The provisions of Subsection A or B of this section shall not apply to termination of a contract for insolvency, abandonment, gross or willful misconduct, failure to pay over to the company money due to the company under existing agency or company contract after receipt of a written demand therefor, fraud or intentional misrepresentation by the [agent] insurance producer, either to the insurer or to an insured, or after the [agent's] insurance producer's license is revoked or otherwise terminated by the superintendent.

D. For one year following termination for any reason other than those set forth in Subsection C of this section, the [agent] insurance producer may renew, for a term of one year, any policies of the insurer in force at termination if the insureds meet current underwriting standards. The [agent] insurance producer shall earn a commission for such renewals at a rate not less than the rate in effect prior to termination.

E. For the purposes of this section:

(1) "independent [agent] insurance producer" means an [agent] insurance producer that is not an employee of an insurer and represents more than one insurer;

(2) "one insurer" includes any group of insurance companies under substantially the same management and control;

(3) "insurer" means any insurance company authorized to transact property or casualty insurance business in this state; and

(4) "policies" means all kinds of insurance, except life, health, annuities and credit life and health.

F. [Any person] An individual who has suffered damages as a result of a violation of this section is granted a right to bring an action in district court to recover damages, including reasonable costs and [attorneys'] attorney fees, if approved by the court.

G. An insurer or authorized representative of the insurer that terminates the appointment, employment contract or other insurance business relationship with an insurance producer shall notify the superintendent within thirty days following the effective date of the termination in the format prescribed by the superintendent, if the reason for termination is one of the reasons set forth in Section 59A-11-14 NMSA 1978 or the insurer has knowledge that the insurance producer was found by a court, government body or self-regulatory organization authorized by law to have engaged in any of the activities in Section 59A-11-14 NMSA 1978. Upon the written request of the superintendent, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the insurance producer.

H. An insurer or authorized representative of the insurer that terminates the appointment, employment or contract with an insurance producer for any reason not set forth in Section 59A-11-14 NMSA 1978 shall notify the superintendent within thirty days following the effective date of the termination, in the format prescribed by the superintendent. Upon written request of the superintendent, the insurer shall provide additional information, documents, records or other data pertaining to the termination.

I. The insurer or the authorized representative of the insurer shall promptly notify the superintendent in the format prescribed by the superintendent if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the superintendent in accordance with Subsection G of this section had the insurer then known of its existence.

J. The insurer shall provide a copy of the notification of termination or cancellation to the insurance producer.

(1) Within fifteen days after making the notification required by Subsections G, H and I of this section, the insurer shall mail a copy of the notification to the insurance producer at the insurance producer's last known address. If the insurance producer is terminated for any of the reasons listed in Section 59A-11-14 NMSA 1978, the insurer shall provide a copy of the notification to the insurance producer at the insurance producer's last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.

(2) Within thirty days after the insurance producer has received the original or additional notification of termination, the insurance producer may file written comments concerning the substance of the notification with the superintendent. The insurance producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the superintendent's file and accompany every copy of a report distributed or disclosed for any reason about the insurance producer subject to the conditions provided in Subsection K of this section.

K. The documents and materials related to termination or cancellation of an insurance producer's appointment shall be deemed confidential as follows:

(1) any documents, materials or other information in the control or possession of the office of superintendent of insurance that is furnished by an insurer, insurance producer or an employee or agent thereof acting on behalf of the insurer or insurance producer, or obtained by the superintendent in an investigation pursuant to this section, shall be confidential and shall not be subject to the Inspection of Public Records Act. Nothing in this section shall be construed as a grant of privilege or confidentiality or a bar to production of that information by an insurer or the insurance producer in a civil suit, whether or not the superintendent is a party; provided that the superintendent may use the documents, materials or other information in a regulatory or legal action brought in the course of the superintendent's official duties. The documents, materials or other information shall not be made public by the superintendent or any other person, except to insurance departments of other states, unless the superintendent determines that the interests of the policyholders, shareholders or public will be served by the publication of them, in which case the superintendent may publish all or any part of them in the manner the superintendent deems appropriate;

(2) in order to assist in the performance of the superintendent's duties, the superintendent may:

(a) share documents, materials or other information, including the confidential documents, materials or information subject to this section, with other state, federal and international regulatory agencies, with the national association of insurance commissioners, its affiliates or subsidiaries and with state, federal and international law enforcement authorities; provided that the recipient agrees to maintain the confidentiality of the documents, materials or other information;

(b) receive documents, materials or information, including otherwise confidential documents, materials or information from the national association of insurance commissioners, its affiliates or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and

(c) enter into agreements governing sharing and use of information consistent with this subsection. The language in this subsection assumes the recipient has the authority to protect the applicable confidentiality or privilege, but does not address the verification of that authority that would presumably occur in the context of a broader information-sharing agreement;

(3) no waiver of any privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the superintendent under this section or as a result of sharing as authorized in this section; and

(4) nothing in this subsection shall prohibit the superintendent from releasing final adjudicated actions, including for-cause terminations that are open to public inspection pursuant to the Inspection of Public Records Act, to a database or other clearinghouse service maintained by the national association of insurance commissioners, its affiliates or subsidiaries of the national association of insurance commissioners.

L. An insurer, the authorized representative of the insurer or insurance producer that fails to report as required under the provisions of this section or that is found by a court of competent jurisdiction to have reported with actual malice may, after notice and hearing, have its license or certificate of authority suspended or revoked and may be fined in accordance with the Insurance Code."

SECTION 19. Section 59A-11-14 NMSA 1978 (being Laws 1984, Chapter 127, Section 193, as amended) is amended to read:

"59A-11-14. SUSPENSION, REVOCATION, REFUSAL TO CONTINUE LICENSE--GROUNDS.--

A. In addition to a reason [therefor] provided under other provisions of the Insurance Code as to particular licenses, the superintendent may place on probation, suspend, revoke or refuse to [continue any] issue or renew a license issued under Chapter 59A, Article 11 NMSA 1978 for any of the following reasons [applicable as to licensee]:

(1) providing incorrect, misleading, incomplete or materially untrue information in the license application;

(2) violating any insurance law or violating any regulation, subpoena or order of the superintendent or of another state's superintendent or commissioner of insurance;

(3) obtaining or attempting to obtain a license through misrepresentation or fraud;

(4) improperly withholding, misappropriating or converting any money or properties received in the course of doing insurance business;

(5) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(6) having been convicted of a felony;

(7) having admitted or been found to have committed any insurance unfair trade practice or fraud;

(8) using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;

(9) having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;

(10) forging another's name to an application for insurance or to any document related to an insurance transaction;

(11) improperly using notes or any other reference material to complete an examination for an insurance license;

(12) knowingly accepting insurance business from an individual who is not licensed;

(13) failing to comply with an administrative or court order imposing a child support obligation;

(14) failing to pay state income tax or comply with any administrative or court order directing payment of state income tax;

[(1) for] (15) any cause for which issuance of the license could have been refused had it then existed and been known to the superintendent;

[(2) violation of any provision of the Insurance Code or other law applicable to the business transacted under the license;

(3) willful failure to comply with, or willful violation of, any lawful order or rule of the superintendent;

(4) material misstatement, misrepresentation or fraud in obtaining the license;

(5)] (16) failure to pass [any] an examination required by the superintendent, subsequent to issue of license, under Subsection D of Section 59A-11-10 NMSA 1978;

[(6) misappropriation, conversion or unlawful withholding, or failure or refusal to pay over upon demand, any money belonging to insurers or others and received in conduct of business under the license;

(7) fraudulent or dishonest practices in conduct of business under the license;

(8) intentional material misrepresentation of the terms of any existing or proposed insurance policy, contract or other service within scope of the license;

(9) conviction by final judgment of a felony involving dishonesty or breach of trust;

(10)] (17) aiding, abetting or assisting another person to violate [any] a provision of the Insurance Code; or

[(11) if in conduct of affairs under the license, the licensee has used fraudulent, coercive or dishonest practices, or has shown himself to be incompetent, untrustworthy, financially irresponsible or a source of injury and loss to the public; or that]

(18) the interests of the insureds or the public are not being properly served under the license.

[B. The superintendent may suspend, revoke or refuse to continue the license of a firm or corporation for any of such causes as relate to any individual designated in or registered as to the license to exercise its powers.

C.] B. The superintendent may require a criminal history background investigation of an applicant or a current license holder by means of fingerprint checks by the department of public safety and the federal bureau of investigation, at the expense of the applicant or license holder, using the applicant's or license holder's fingerprints or other identifying information. The information shall be used by the superintendent solely in determining whether to suspend, revoke or refuse to continue a license."

SECTION 20. Section 59A-11-15 NMSA 1978 (being Laws 1984, Chapter 127, Section 194) is repealed and a new Section 59A-11-15 NMSA 1978 is enacted to read:

"59A-11-15. [NEW MATERIAL] PROCEDURE FOR SUSPENSION, REVOCATION OR REFUSAL TO CONTINUE LICENSE.--

A. If the superintendent denies an initial or renewal application for a license, the superintendent shall notify the applicant in writing and advise the applicant of the reason for the denial or non-renewal of the application. Within thirty days of the date of issuance of the denial of application for initial issuance or renewal of a license, the applicant may request in writing a hearing on the denial. The hearing shall be held within ninety days and shall be held otherwise pursuant to Section 59A-4-15 NMSA 1978.

B. In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to an administrative fine according to Section 59A-1-18 NMSA 1978.

C. The superintendent shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this section against any person who is under investigation for or charged with a violation of this section even if the person's license or registration has been surrendered or has lapsed by operation of law.

D. The state shall participate in the national association of insurance commissioners attachment warehouse personal information capture system alerts or another appropriate mechanism to monitor actions against existing licensees and take necessary action, when warranted based on the information obtained through such notifications."

SECTION 21. A new section of Chapter 59A, Article 11 NMSA 1978 is enacted to read:

"[NEW MATERIAL] DUTY TO REPORT.--

A. A licensee shall report to the superintendent any administrative action taken against the licensee in another jurisdiction or by another governmental agency in this state within thirty days of the final disposition of the matter. The report shall include a copy of the order, consent to order or other relevant legal documents.

B. Within thirty days of the initial pretrial hearing date, a licensee shall report to the superintendent any criminal prosecution of the licensee taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents."

SECTION 22. A new section of Chapter 59A, Article 11 NMSA 1978 is enacted to read:

"[NEW MATERIAL] RECIPROCITY.--

A. The superintendent shall waive any requirements for a nonresident license applicant with a valid license from the applicant's home state, except the requirements imposed by Section 23 of this 2016 act, if the applicant's home state awards nonresident licenses to residents of this state on the same basis.

B. A nonresident licensee's satisfaction of the nonresident licensee's home state's continuing education requirements shall constitute satisfaction of the continuing education requirements if the nonresident licensee's home state recognizes the satisfaction of its continuing education requirements imposed upon licensees from New Mexico on the same basis."

SECTION 23. A new section of Chapter 59A, Article 11 NMSA 1978 is enacted to read:

"[NEW MATERIAL] NONRESIDENT LICENSE--REQUIREMENTS.--

A. Unless denied a license pursuant to Section 59A-11-14 NMSA 1978, a nonresident person shall receive a nonresident license if:

(1) the person is currently licensed as a resident in good standing in the person's home state;

(2) the person has submitted the proper request for licensure and has paid the fees required by Section 59A-6-1 NMSA 1978;

(3) the person has submitted or transmitted to the superintendent the application for licensure that the person submitted to the person's home state or a completed uniform application; and

(4) the person's home state awards nonresident licenses to residents of this state on the same basis.

B. The superintendent may verify an applicant's insurance producer licensing status through the insurance producer database maintained by the national association of insurance commissioners, its affiliates or subsidiaries.

C. A nonresident licensee who moves from one state to another state or a resident licensee who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty days of the change of legal residence.

D. Notwithstanding any other provision of this section, a person licensed as a surplus lines producer in the person's home state shall receive a nonresident surplus lines producer license pursuant to Subsection A of this section. Except as provided in Subsection A of this section, nothing in this section otherwise amends or supersedes any provision of Chapter 59A, Article 14 NMSA 1978.

E. Notwithstanding any other provision of this section, a person licensed as a limited lines credit insurance or other type of limited lines producer in the person's home state shall receive a nonresident limited lines producer license, pursuant to Subsection A of this section, granting the same scope of authority as granted under the license issued by the producer's home state. For the purposes of this subsection, limited lines insurance is any authority granted by the home state that restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to Subsection C of Section 59A-7-1 NMSA 1978."

SECTION 24. Section 59A-11A-7 NMSA 1978 (being Laws 1989, Chapter 97, Section 7) is amended to read:

"59A-11A-7. PAYMENT FROM INSURERS OR [AGENTS] INSURANCE PRODUCERS FOR SALE OF INSURANCE PROHIBITED--PENALTY.--

A. No insurance consultant serving any person, firm, association, organization or corporation not engaged in the insurance business, for compensation paid or to be paid by the person served, shall directly or indirectly receive any part of any commission or compensation paid by any insurer or [agent] insurance producer of any insurer in connection with the sale or writing of any insurance [which] that is within the subject matter of any such service.

B. Any person who violates any provision of Subsection A of this section is guilty of a misdemeanor and upon conviction shall be punished by a fine of not more than five hundred dollars ($500) or by imprisonment in the county jail for a definite term of not less than thirty days or more than ninety days or both."

SECTION 25. Section 59A-12-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 201) is amended to read:

"59A-12-1. PURPOSE AND SCOPE OF ARTICLE.--[This article applies only to agents, brokers and solicitors, as hereinafter defined, as to transaction of one or more kinds of insurance or subdivisions thereof as defined in Article 7 of the Insurance Code.] Chapter 59A, Article 12 NMSA 1978, in conjunction with Chapter 59A, Article 11 NMSA 1978, governs the qualifications and procedures for the licensing of insurance producers. Chapter 59A, Article 12 NMSA 1978 does not apply to surplus lines brokers that are licensed pursuant to Chapter 59A, Article 14 NMSA 1978 and that sell, solicit or negotiate insurance in this state solely for placement with eligible surplus lines insurers, except as provided in Sections 22 and 23 of this 2016 act."

SECTION 26. Section 59A-12-2 NMSA 1978 (being Laws 1984, Chapter 127, Section 202) is repealed and a new Section 59A-12-2 NMSA 1978 is enacted to read:

"59A-12-2. [NEW MATERIAL] DEFINITIONS.--As used in Chapter 59A, Article 12 NMSA 1978:

A. "affiliate" means a person that controls, is controlled by or is under common control with the insurance producer;

B. "business entity" means a corporation, association, partnership, limited liability company, limited liability partnership or other legal entity;

C. "home state" means the District of Columbia and any state or territory of the United States in which an insurance producer maintains the insurance producer's principal place of residence or principal place of business and is licensed to act as an insurance producer;

D. "insurance" means any of the lines of authority in Chapter 59A, Article 7 NMSA 1978;

E. "insurance producer" means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance;

F. "insurer" means every person engaged as principal and as indemnitor, surety or contractor in the business of entering into contracts of insurance;

G. "license" means a document issued by the superintendent authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurance carrier;

H. "limited line credit insurance" includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection insurance and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation;

I. "limited line credit insurance producer" means a person who sells, solicits or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group or individual policy;

J. "limited lines insurance" means those lines of insurance referred to in Section 59A-12-18 NMSA 1978 or any other line of insurance that the superintendent deems necessary to recognize for the purposes of complying with Subsection E of Section 23 of this 2016 act;

K. "limited lines producer" means a person authorized by the superintendent to sell, solicit or negotiate limited lines insurance;

L. "negotiate" means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract; provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers;

M. "sell" means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurer;

N. "solicit" means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular insurer;

O. "terminate" means to cancel the relationship between an insurance producer and the insurer or to terminate an insurance producer's authority to transact insurance;

P. "uniform application" means the current version of the national association of insurance commissioners uniform application for resident and nonresident insurance producer licensing; and

Q. "uniform business entity application" means the current version of the national association of insurance commissioners uniform business entity application for resident and nonresident business entities."

SECTION 27. Section 59A-12-3 NMSA 1978 (being Laws 1984, Chapter 127, Section 203) is amended to read:

"59A-12-3. "BROKER" ["NONRESIDENT BROKER"] AND "SERVICE REPRESENTATIVE" DEFINED.--For the purpose of the Insurance Code:

A. a "broker" is a [person generally] type of insurance producer who, not being an agent of the insurer, as an independent contractor and on behalf of the insured solicits, negotiates or procures insurance or annuity contracts or renewal or continuation thereof for insureds or prospective insureds other than [himself] the broker.

[B. a "nonresident broker" is a broker residing or, if a corporation or firm, domiciled in a state other than New Mexico or residing or domiciled in a foreign country;

C.] "Broker" does not include a surplus line broker, as defined in Chapter 59A, Article 14 [of the Insurance Code] NMSA 1978; and

B. "service representative" means an individual, regularly employed on salary by an insurer, group of insurers or managing general agent, who assists insurance producers in soliciting, negotiating and effectuating insurance for such insurer, group or managing general agent and, in conduct of their business, receives no part of the commission on insurance written. A service representative is not required to be licensed, nor shall the service representative independently solicit or negotiate insurance or annuity contracts."

SECTION 28. Section 59A-12-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 205, as amended by Laws 1999, Chapter 272, Section 5 and also by Laws 1999, Chapter 289, Section 6) is amended to read:

"59A-12-4. ["SOLICITOR" DEFINED] LICENSE REQUIRED.--[For the purposes of Chapter 59A, Article 12 NMSA 1978, a "solicitor" is an individual employed by a licensed agent to solicit insurance and perform such other duties in handling the agent's business as the agent may authorize] A person shall not sell, solicit or negotiate insurance in this state for any class or classes of insurance unless the person is licensed for that line of insurance in accordance with the Insurance Code."

SECTION 29. Section 59A-12-7 NMSA 1978 (being Laws 1984, Chapter 127, Section 208) is repealed and a new Section 59A-12-7 NMSA 1978 is enacted to read:

"59A-12-7. [NEW MATERIAL] EXEMPTIONS FROM LICENSE REQUIREMENTS.--

A. Nothing in Chapter 59A, Article 12 NMSA 1978 shall be construed to require an insurer to obtain an insurance producer license. In this section, the term "insurer" does not include an insurer's officers, directors, employees, subsidiaries or affiliates.

B. A license as an insurance producer shall not be required of the following:

(1) an officer, director or employee of an insurer or of an insurance producer; provided that the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and:

(a) the officer's, director's or employee's activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance;

(b) the officer's, director's or employee's function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or

(c) the officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance;

(2) a person who receives no commission and who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance, or enrolls individuals, issues certificates or otherwise assists in administering plans, or performs administrative services related to mass marketed property and casualty insurance;

(3) an employer or association or its officers, directors, employees or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contract;

(4) employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance;

(5) a person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state; provided that the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state;

(6) person who is not a resident of this state who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract; provided that that person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or

(7) a salaried full-time employee who counsels or advises the employee's employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer; provided that the employee does not sell or solicit insurance or receive a commission."

SECTION 30. Section 59A-12-11 NMSA 1978 (being Laws 1984, Chapter 127, Section 212) is amended to read:

"59A-12-11. NO LICENSE WHERE SHARES OR INTEREST USED AS INDUCEMENT TO INSURANCE.--The superintendent shall not license as [agent, broker or solicitor] an insurance producer, or permit any such license to continue [in force], if the superintendent finds that the licensee did, or that the applicant for license [probably will] intends to offer, give or sell stock or other ownership or participating interest in the agency or brokerage as inducement to or in connection with purchase of insurance."

SECTION 31. Section 59A-12-12 NMSA 1978 (being Laws 1984, Chapter 127, Section 213, as amended by Laws 1999, Chapter 272, Section 8 and also by Laws 1999, Chapter 289, Section 9) is repealed and a new Section 59A-12-12 NMSA 1978 is enacted to read:

"59A-12-12. [NEW MATERIAL] APPLICATION AND GENERAL QUALIFICATIONS FOR INDIVIDUAL INSURANCE PRODUCER LICENSE.--

A. An individual applying for a resident insurance producer license shall apply to the superintendent on the uniform application and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the applicant's knowledge and belief.

B. Before approving the application, the superintendent shall:

(1) confirm that the applicant:

(a) is at least eighteen years of age;

(b) has not committed any act that is a ground for denial, suspension or revocation under the Insurance Code;

(d) has successfully passed the examinations for the lines of authority for which the application is made, if such examination is required; and

(e) is in compliance with other applicable qualifications and requirements of the Insurance Code;

(2) review the applicant's answers to the standard background questions on the uniform application;

(3) obtain the applicant's fingerprints; and

(4) conduct state and federal criminal background checks on the applicant.

C. The superintendent may require any documents reasonably necessary to verify the information contained in an application. The superintendent may obtain fingerprints from licensed resident insurance producers from whom fingerprints were not obtained at the time of application or when adding additional lines of authority to their license.

D. Each insurer that sells, solicits or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited line credit insurance a program of instruction approved by the superintendent."

SECTION 32. Section 59A-12-13 NMSA 1978 (being Laws 1984, Chapter 127, Section 214) is amended to read:

"59A-12-13. SPECIAL REQUIREMENTS, TITLE INSURANCE [AGENTS] PRODUCERS.--

A. The superintendent shall not issue or permit to [remain in force an agent] continue an insurance producer license [as to] for title insurance except [as to] for an applicant or a licensee who, in addition to other applicable qualifications and requirements, owns, operates or controls an abstract plant consisting of a set of records in which an entry has been made of all documents or matters [which] that under law impart constructive notice of matters affecting title to real property or any interest therein or encumbrance thereon, which have been filed or recorded in the county for which such title plant is maintained for a period of not less than twenty [(20)] years immediately prior to date of application for license. Such records shall consist of:

(1) an index or indices in which notations of or references to any [such] documents that describe property affected thereby are posted, entered or otherwise included, according to the property described therein, or copies or briefs of all [such] documents that describe the property affected thereby [which] that are sorted and filed according to such property; and

(2) an index or indices in which all other such documents are posted, entered or otherwise included, according to the name or names of the parties whose title to real property or any interest therein or encumbrances thereon is affected.

[B. Every applicant who, on January 1, 1965, was licensed as an agent to issue title insurance shall be exempted from the requirement of having a twenty-year abstract plant, if an abstract plant is maintained on a current basis commencing July 1, 1965.

C.] B. A license [as agent] to issue title insurance shall permit the licensee to issue policies only on property located in the county or counties for which the licensee has the necessary abstract plant."

SECTION 33. Section 59A-12-15 NMSA 1978 (being Laws 1984, Chapter 127, Section 216, as amended by Laws 1999, Chapter 272, Section 9 and also by Laws 1999, Chapter 289, Section 10) is amended to read:

"59A-12-15. LICENSING [FIRMS, CORPORATIONS] BUSINESS ENTITIES.--

[A. The superintendent shall license a firm or corporation only as an agent or broker.

B. For license as agent each general partner and each individual to act for the firm, or each individual to act for the corporation, shall be named in the license or registered with the superintendent, and shall qualify as though for license as an individual.]

A. A business entity acting as an insurance producer is required to obtain an insurance producer license. Application shall be made using the uniform business entity application. Before approving the application, the superintendent shall confirm that:

(1) the business entity has paid the fees set forth in Section 59A-6-1 NMSA 1978;

(2) the business entity has designated a licensed insurance producer responsible for the business entity's compliance with the insurance laws of this state; and

(3) a licensee who is to exercise license powers shall be affiliated by submitting an application. The application must be submitted with payment as required in Section 59A-6-1 NMSA 1978.

B. The application shall be signed on behalf of the applicant by an authorized partner or corporate officer, and under oath if required by the superintendent.

C. The application form may require the following information about the applicant:

(1) if the applicant is a partnership, the name, residence, proof of identity, business record and reputation, business experience of each partner and any other information required by the superintendent;

(2) if the applicant is a corporation, the name, residence, proof of identity, business record and reputation, business experience of each officer, member of the board of directors, controlling stockholder and any other information required by the superintendent;

(3) evidence satisfactory to the superintendent that transaction of business proposed to be transacted under the license applied for is within the partnership agreement, if the applicant is a partnership, or within the corporate powers, if the applicant is a corporation; and

(4) such further information concerning the applicant, appointment of the applicant, partners, corporate officers, directors and stockholders, as the superintendent may require.

D. If the applicant is a partnership, each individual who is not a general partner and who is to exercise license powers, and if the applicant is a corporation, each individual, whether or not an officer, director, stockholder or in other relationship to the corporation, who is to exercise the license powers, shall file an application as though for an individual license for the same kind of business as that applied for by the partnership or corporation.

E. The application shall be accompanied by payment of the application filing fee, fee for any examination required under the Insurance Code to be taken and passed prior to licensing and by any bond otherwise required for the license applied for. A license application filing fee is required for each individual who is to exercise the license powers of a corporation, or license powers of a partnership if not a general partner therein.

F. The business entity shall comply with all other licensing and registration requirements to do business in the state."

SECTION 34. Section 59A-12-16 NMSA 1978 (being Laws 1984, Chapter 127, Section 217, as amended) is amended to read:

"59A-12-16. EXAMINATION FOR LICENSE.--

A. [Each applicant] A resident individual applying for an insurance producer license [as agent, solicitor or broker] shall, prior to issuance of license, personally take and pass [an] a written examination. [authorized by the superintendent to establish the applicant's competence, knowledge and understanding of attendant responsibility and duties as to the insurance business to be transacted under the license applied for; except, that no such] The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and rules of this state. Examinations required by this section shall be developed and conducted under rules prescribed by the superintendent.

B. The superintendent may contract with an outside testing service for administering examinations and collecting the nonrefundable fee set forth in Section 59A-6-1 NMSA 1978.

C. Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the superintendent as set forth in Section 59A-6-1 NMSA 1978.

D. An individual who fails to appear for the examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.

E. No examination shall be required:

(1) for renewal or continuance of an existing license, except as provided in Subsection D of Section 59A-11-10 NMSA 1978;

(2) of an applicant for limited license as provided in Section 59A-12-18 NMSA 1978;

(3) of applicants with respect to life and annuities or accident and health [or life or health] insurances who hold the chartered life underwriter (C.L.U.) designation by the American college of life underwriters;

(4) of applicants with respect to property and casualty [surety, marine and transportation, and vehicle insurances, or any of them] insurance who hold the designation of chartered property and casualty underwriter (C.P.C.U.) designation by the American institute of property and casualty underwriters;

(5) of applicants for temporary license as provided for in Section 59A-12-19 NMSA 1978;

(6) of an applicant for a license covering the same kind or kinds of insurance as to which licensed in this state under a similar license within five years preceding date of application for the new license, unless the previous license was suspended, revoked or continuation thereof refused by the superintendent; or

[(7) of an applicant for solicitor license who held license as agent in this state as to the same kind or kinds of insurance within five years preceding date of application for the new license, unless the previous license was suspended, revoked or continuation thereof refused by the superintendent; or

(8)] (7) of an applicant for [broker or agent] insurance producer license, if [the superintendent is satisfied that] the applicant took and passed a similar examination in a state in which already licensed, subject to Section 59A-5-33 NMSA 1978.

[B. The superintendent shall conduct examinations as provided for in Chapter 59A, Article 11 NMSA 1978.]

F. An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state shall not be required to take an examination. This exemption is only available if the person is currently licensed in that state or if the application is received within ninety days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's insurance producer database records, maintained by the national association of insurance commissioners, its affiliates or subsidiaries, indicate that the insurance producer is or was licensed in good standing for the line of authority requested.

G. A person licensed as an insurance producer in another state who moves to this state shall apply within ninety days of establishing legal residence to become a resident insurance producer. No examination shall be required of that person to obtain any line of authority previously held in the prior state except where the superintendent determines otherwise by rule."

SECTION 35. Section 59A-12-17 NMSA 1978 (being Laws 1984, Chapter 127, Section 218, as amended) is amended to read:

"59A-12-17. SCOPE OF LICENSE.--

[A. Except as to limited licenses identified in Section 59A-12-18 NMSA 1978 and Section 3 of this 2013 act, an agent's or broker's license shall cover the kind of insurance, or major subdivisions of life or health insurance, for which the applicant has applied and qualified, including the following:

(1) life insurance, or any or all of the following subdivisions thereof:

(a) industrial life insurance;

(b) debit insurance;

(d) variable annuity contracts;

(2) health insurance, credit health insurance or industrial health insurance, or other subdivisions thereof;

(3) property insurance;

(4) casualty insurance;

(5) surety insurance;

(6) marine and transportation insurance;

(7) vehicle insurance; or

(8) title insurance.

B. The scope of a solicitor's license is subject to Section 59A-12-14 NMSA 1978.

C. License of a broker shall cover the kind or kinds of insurance applied and qualified for, within the classifications stated in Subsection A of this section.]

A. Unless denied licensure pursuant to Sections 59A-11-8 and 59A-11-14 NMSA 1978, a person who has met the requirements of Sections 59A-12-12 and 59A-12-15 NMSA 1978 shall be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of authority:

(1) life insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income;

(2) accident and health or sickness insurance coverage for sickness, bodily injury or accidental death and may include benefits for disability income;

(3) property insurance coverage for the direct or consequential loss or damage to property of every kind;

(4) casualty insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property;

(5) variable life and variable annuity products insurance coverage provided under variable life insurance contracts and variable annuities;

(6) personal lines property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;

(7) limited line credit insurance; and

(8) any other line of insurance permitted under state laws.

[D.] B. A licensee as to variable annuities or similar contracts deemed to constitute [also] securities shall also possess license as a security salesman under other applicable state laws.

C. An insurance producer license shall remain in effect unless revoked or suspended as long as the fee set forth in Section 59A-6-1 NMSA 1978 is paid and education requirements for resident insurance producers are met by the due date.

D. An insurance producer who allows the insurance producer's license to lapse may, within twelve months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination. However, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.

E. A licensed insurance producer who is unable to comply with license renewal procedures due to military service or some other extenuating circumstance may request a waiver of those procedures. The insurance producer may also request a waiver of any examination requirement or any other fine or sanction imposed for failure to comply with renewal procedures.

F. The license shall contain the licensee's name, address and personal identification number, the date of issuance, the lines of authority, the expiration date and any other information the superintendent deems necessary.

G. Licensees shall inform the superintendent in the format prescribed by the superintendent of a change of address within thirty days of the change. Failure to timely inform the superintendent of a change in legal name or address shall result in a penalty of fifty dollars ($50.00).

H. The superintendent may contract with non- governmental entities, including the national association of insurance commissioners or any affiliates or subsidiaries that the national association of insurance commissioners oversees, to perform any ministerial functions, including the collection of fees, related to insurance producer licensing that the superintendent and the nongovernmental entity may deem appropriate."

SECTION 36. Section 59A-12-18 NMSA 1978 (being Laws 1984, Chapter 127, Section 219, as amended) is amended to read:

"59A-12-18. LIMITED [LICENSE] LINES.--

A. The superintendent may issue a limited [agent's] insurance producer license to individual applicants employed full time by a vendor of merchandise or other property, or by a financial institution making consumer loans on terms with respect to which credit life insurance, credit health insurance, credit property insurance or credit involuntary unemployment insurance under individual policies is customarily required of or offered to the purchaser or borrower, covering only that credit life, credit health, credit property or credit involuntary unemployment insurance.

B. The superintendent may issue a limited [agent's] insurance producer license to vendors in accordance with the provisions of the Portable Electronics Insurance Act. The application shall provide:

(1) the name, residence address and other information required by the superintendent for an employee or officer of the vendor that is designated by the applicant as the [person] individual responsible for the vendor's compliance with the requirements of the Portable Electronics Insurance Act. [However, if] If the vendor derives more than fifty percent of its revenue from the sale of portable electronics insurance, the information noted above shall be provided for all officers, directors and shareholders of record having beneficial ownership of ten percent or more of any class of securities registered under the federal securities law; and

(2) the location of the applicant's home office.

C. No holder of a limited license issued pursuant to Subsection A of this section shall concurrently be otherwise licensed under the Insurance Code."

SECTION 37. Section 59A-12-18.1 NMSA 1978 (being Laws 2013, Chapter 140, Section 3) is amended to read:

"59A-12-18.1. LIMITED LINES TRAVEL INSURANCE PRODUCER LICENSE [TRAVEL INSURANCE].--

A. The superintendent may issue a limited [agent's] lines travel insurance producer license to applicants who are qualified to solicit or sell travel insurance.

B. A travel retailer may offer [and disseminate] travel insurance under the license of a limited lines travel insurance [agent] producer only if:

(1) the limited lines travel insurance [agent] producer or travel retailer provides to purchasers of travel insurance:

(a) a description of the material terms of the insurance coverage;

(b) a description of the process for filing a claim;

(d) the identity and contact information of the insurer and limited lines travel insurance [agent] producer;

(2) the limited lines travel insurance [agent] producer:

(a) establishes at the time of licensure on a form prescribed by the superintendent a register of each travel retailer that offers travel insurance on behalf of the limited lines travel insurance [agent] producer;

(b) includes in the register each travel retailer's federal tax identification number and the name, address and contact information of each travel retailer and an officer or person who directs or controls the travel retailer's operations;

(d) submits the register to the superintendent upon reasonable request; and

(e) certifies that each travel retailer on the register complies with federal laws;

(3) the limited lines travel insurance [agent] producer has selected a designated responsible agent who is one of its licensed individual [agent] insurance producer employees and who is responsible for the limited lines travel insurance [agent's] producer's compliance with the travel insurance laws and rules of this state;

(4) the designated responsible agent, president, secretary, treasurer and all other officers or persons who direct or control the limited lines travel insurance [agent's] producer's insurance operations comply with the fingerprinting requirements for insurance [agents] producers of the resident state of the limited lines travel insurance [agent] producer;

(5) the limited lines travel insurance [agent] producer has paid all applicable insurance [agent] producer licensing fees pursuant to state law; and

(6) the limited lines travel insurance [agent] producer requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training that the superintendent may review and that, at a minimum, contains instructions on the types of insurance offered, ethical sales practices and required disclosures to prospective customers.

C. A travel retailer that offers and disseminates travel insurance shall make available to prospective purchasers brochures or other written materials that:

(1) identify and provide the contact information of the insurer and the limited lines travel insurance [agent] producer;

(2) explain that the purchase of travel insurance is not a prerequisite to the purchase of any other product or service of the travel retailer; and

(3) explain that an unlicensed travel retailer may provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.

D. A travel retailer's employee or authorized representative who is not licensed as an insurance [agent] producer shall not:

(1) evaluate or interpret the technical terms, benefits or conditions of the travel insurance coverage offered;

(2) evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or

(3) make representation as being a licensed insurer, licensed [agent] insurance producer or insurance expert.

E. A travel retailer and its employees and authorized representatives whose insurance-related activities are limited to the offering and disseminating of travel insurance on behalf of and under the direction of a limited lines travel insurance [agent] producer that complies with this section may conduct and receive compensation for those activities.

F. A travel retailer may place insurance under an individual policy or under a group or master policy.

G. As the insurer designee, a limited lines travel insurance [agent] producer shall be responsible for the acts of the travel retailer and shall use reasonable means to ensure that the travel retailer complies with the provisions of this section.

H. As used in this section:

(1) "limited lines travel insurance [agent] producer" means a licensed managing general agent or third-party administrator or a licensed insurance [agent] producer;

(2) "offer and disseminate" means providing general information, including a description of coverage and price, processing applications, collecting premiums and performing other nonlicensable activities permitted by this state;

(3) "travel insurance" means insurance coverage for personal risks incident to planned travel, including the interruption or cancellation of a trip or event; the loss of baggage or personal effects; damage to accommodations or rental vehicles; or sickness, accident, disability or death during travel. "Travel insurance" [excludes] does not include major medical plans that provide comprehensive medical protection for travelers on trips of six months or longer, such as for those working overseas as expatriates or deployed military personnel; and

(4) "travel retailer" means a business entity that makes, arranges or offers travel services."

SECTION 38. Section 59A-12-19 NMSA 1978 (being Laws 1984, Chapter 127, Section 220) is repealed and a new Section 59A-12-19 NMSA 1978 is enacted to read:

"59A-12-19. [NEW MATERIAL] TEMPORARY LICENSES.--

A. The superintendent may issue a temporary insurance producer license for a period not to exceed one hundred eighty days without requiring an examination if the superintendent deems that the temporary license is necessary for the servicing of an insurance business in the following cases:

(1) to the surviving spouse or court- appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the insurance producer or for the recovery or return of the insurance producer to the business or to provide for the training and licensing of new personnel to operate the insurance producer's business;

(2) to a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;

(3) to the designee of a licensed insurance producer entering active service in the armed forces of the United States; or

(4) in any other circumstance where the superintendent deems that the public interest will best be served by the issuance of the license.

B. The superintendent may by order limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The superintendent may require the temporary licensee to have a suitable sponsor who is a licensed insurance producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. The superintendent may by order revoke a temporary license if the interest of insureds or the public is endangered. A temporary license shall not continue after the owner or the personal representative disposes of the business."

SECTION 39. Section 59A-12-20 NMSA 1978 (being Laws 1984, Chapter 127, Section 221, as amended) is amended to read:

"59A-12-20. PLACE OF BUSINESS [DISPLAY OF LICENSE].--

[A. A general lines agent] An insurance producer shall have and maintain a place of business accessible to the public where the licensee conducts transactions under the license. Nothing in this section shall prohibit maintenance of the place of business in the licensee's residence.

[B. The licenses of the licensee and of solicitors employed by the licensee shall be conspicuously displayed in the place of business in a part customarily open to the public.

C. This section does not apply to life insurance, annuity contracts or health insurance.]"

SECTION 40. Section 59A-12-21 NMSA 1978 (being Laws 1984, Chapter 127, Section 222) is amended to read:

"59A-12-21. RECORDS OF [GENERAL LINES AGENT] INSURANCE PRODUCER.--

A. Every [general lines agent] insurance producer shall keep in [his] the insurance producer's place of business [referred to in Section 221 of this article] complete records of transactions under [his] the license [and those of his solicitors]. The record shall show the following information for each insurance policy placed by or through the licensee [not less than]:

(1) the names of the insurer and insured;

[the number and expiration date of, and premium payable as to, the policy, the names of all other persons from whom business is accepted or to whom commissions are promised or paid, all premiums collected, and such additional information as the superintendent may reasonably require]

(2) the number and expiration date of each policy;

(3) the premium payable for each policy;

(4) the names of all other persons from whom business is accepted or to whom commissions are promised or paid;

(5) all premiums collected; and

(6) any additional information the superintendent may require.

B. The records shall be open to the superintendent's examination, and the superintendent may at any reasonable time require the licensee to furnish, in [such] the manner or form [as] that the superintendent may require, any information kept or required to be kept in such records.

C. Records as to a particular policy may be destroyed on expiration of three [(3)] years after the policy's expiration.

[D. This section does not apply to life insurance, annuity contracts or health insurance.]"

SECTION 41. Section 59A-12-22 NMSA 1978 (being Laws 1984, Chapter 127, Section 223, as amended) is amended to read:

"59A-12-22. FIDUCIARY FUNDS--[AGENTS, BROKERS, SOLICITORS] INSURANCE PRODUCERS, SURPLUS LINE BROKERS, BAIL BONDSMEN, MOTOR CLUB AGENTS AND OTHERS.--

A. All funds of others received by [any] a person licensed or acting as an insurance [agent, broker, solicitor] producer, surplus line broker, bail bondsman or their solicitor, motor club agent or agent [or solicitor] for a health care plan or prepaid dental plan, or in [any] a similar capacity for which licensing of [such] the person is required under the Insurance Code, are received and held by [such] the person in a fiduciary capacity. Any [such] person who diverts or appropriates [such] funds to [his] the person's own use, or takes or secretes with intent to embezzle, all without consent of the person entitled to [such] the funds, is guilty of larceny by embezzlement.

B. Subject to the terms of any agreement between [such] a person or licensee and [his] the person's or licensee's principal or obligee, each [such] person who does not make immediate remittance of [such] funds to the insurer or other person entitled thereto shall elect and follow as to funds received for account of a particular insurer or person either of the following methods:

(1) remit received premiums (less applicable commissions, if any) and return premiums to the insurer or other person entitled thereto within fifteen days after [such] receipt; or

(2) establish and maintain in a commercial bank or other established financial institution depositary one or more accounts, separate from accounts holding general personal, firm or corporate funds, and forthwith deposit and retain therein pending transmittal to the insurer or other person entitled thereto all such premiums (net of applicable commissions, if any) and return premiums. Funds belonging to more than one principal may be as deposited and held in the same [such] account so long as the amount held for each [such] principal is readily ascertainable from the records of the depositor. The depositor may commingle with such fiduciary funds in a particular [such] account such additional funds as the licensee deems prudent for advancing premiums, reserves for payment of return commissions or for other contingencies arising in the business of receiving and transmitting premiums or return premiums.

C. [Such] The person may commingle with [his] the person's own funds to an unlimited amount funds of a particular principal who has in writing in advance expressly waived the segregation requirements of Subsection B of this section.

D. Any commingling of funds with funds of any [such] person permitted under this section shall not alter the fiduciary capacity of [such] the person as to funds of others."

SECTION 42. Section 59A-12-23 NMSA 1978 (being Laws 1984, Chapter 127, Section 224, as amended by Laws 1999, Chapter 272, Section 13 and also by Laws 1999, Chapter 289, Section 14) is amended to read:

"59A-12-23. INSURANCE VENDING MACHINES.--

A. A licensed [agent] insurance producer may solicit for and issue personal travel accident insurance policies of an authorized insurer by means of mechanical vending machines supervised by the [agent] insurance producer and placed at airports and other places of convenience to the traveling public, if the superintendent finds that:

(1) the policy provides reasonable coverage and benefits, is suitable for sale and issuance by vending machine and use of such a machine in a proposed location would be of material convenience to the public;

(2) the type of machine proposed to be used is reasonably suitable for the purpose;

(3) reasonable means are provided for informing prospective purchasers of policy coverages and restrictions;

(4) reasonable means are provided for refund of money inserted in defective machines and for which insurance so paid for is not received; and

(5) the cost of maintaining such a machine at a particular location is reasonable.

B. For each machine to be used the superintendent shall issue to the applicant a special vending machine license. The license shall state the name and address of the insurer and [agent] insurance producer, name of the policy to be sold and serial number and operating location of the machine. The license shall be subject to [annual] biennial continuation, to expiration, suspension or revocation coincidentally with that of the [agent] insurance producer. The superintendent shall also revoke the license as to any machine as to which [he] the superintendent finds that license qualifications no longer exist. Proof of existence of a subsisting license shall be displayed on or about each machine in use in [such] the manner [as] that the superintendent reasonably requires."

SECTION 43. Section 59A-12-25 NMSA 1978 (being Laws 1984, Chapter 127, Section 226, as amended by Laws 1999, Chapter 272, Section 15 and also by Laws 1999, Chapter 289, Section 16) is amended to read:

"59A-12-25. NONRESIDENT [BROKERS, NONRESIDENT AGENTS AND NONRESIDENT SOLICITORS] INSURANCE PRODUCERS--RETALIATION.--

A. The superintendent may refuse to issue a license as [a broker, agent or solicitor] an insurance producer to a resident of another state or country, who is otherwise qualified under [this article] Chapter 59A, Article 12 NMSA 1978 for license as [a broker, agent or solicitor] an insurance producer in New Mexico, if under the laws of the other state or country licensed residents of this state are prohibited or prevented from acting as [broker, agent or solicitor] an insurance producer because of their residence.

B. As part of an application for a license, the nonresident applicant shall appoint the superintendent, on a form prescribed and furnished by the superintendent, as agent on whom may be served all legal process issued by a court in this state in any action against or involving the licensee as to transactions under the license. The appointment shall be irrevocable and continue for so long as an action could arise or exist. Duplicate copies of process shall be served upon the superintendent or other individual in apparent charge of the office of superintendent of insurance [division] during the superintendent's absence, accompanied by payment of the process service fee specified in Section 59A-6-1 NMSA 1978. Upon service the superintendent shall promptly forward a copy by certified mail, return receipt requested, to the licensee at [his] the licensee's last address of record with the superintendent. Process served and copy forwarded as so provided shall for all purposes constitute personal service upon the licensee.

C. The licensee shall likewise file with the superintendent written agreement to appear before the superintendent pursuant to notice of hearing, show cause order or subpoena issued by the superintendent and deposited, postage paid, by certified mail in a letter depository of the United States post office, addressed to the licensee at [his] the licensee's last address of record with the superintendent, and that upon failure of the licensee to appear the licensee thereby consents to any subsequent suspension, revocation or refusal of the superintendent to continue the license."

SECTION 44. Section 59A-12-26 NMSA 1978 (being Laws 1984, Chapter 127, Section 227, as amended) is amended to read:

"59A-12-26. [CONTINUED] CONTINUING EDUCATION.--

A. [For protection of the public and to preserve and improve competence of licensees] The superintendent [may in his sole discretion] shall require as a condition to continuation of an insurance producer license [as agent, solicitor or broker under this article] that during the [twelve] twenty-four months next preceding expiration of the current license period the licensee has attended the minimum number of hours of formal class instruction, lectures or seminars required and approved by the superintendent covering the kinds of insurance for which licensed.

B. Instruction shall be designed to refresh the licensee's understanding of basic principles and coverages involved, recent and prospective changes, applicable laws and rules of the superintendent, proper conduct of the licensee's business and duties and responsibilities of the licensee.

C. The superintendent may permit licensees who because of remoteness of residence or business cannot with reasonable convenience attend formal instruction sessions [and] to successfully complete an equivalent course of study and instruction online or by mail.

D. The superintendent [shall promulgate rules for the purposes and requirements of this section and] may impose a penalty not to exceed fifty dollars ($50.00) for a licensee's failure to timely report continuing education credits.

E. [For the purposes of this section] The superintendent shall charge, at the time of certifying each licensee's continuing education credits as a condition of continuation of license, a fee of one dollar ($1.00) per credit hour of continuing education; provided that the superintendent may contract with an [established and experienced] independent agency to receive and review continuing education compliance reports and, in such a case, the fee shall be a reasonable amount fixed by the superintendent and payable to the contracting agency.

F. This section shall not apply to holders of limited license issued under Section 59A-12-18 NMSA 1978."

SECTION 45. Section 59A-12-26.1 NMSA 1978 (being Laws 1988, Chapter 112, Section 1) is amended to read:

"59A-12-26.1. INSURANCE LICENSEE CONTINUING EDUCATION FUND [APPROPRIATION].--There is created in the state treasury a fund [which] that shall be known as the "insurance licensee continuing education fund". All fees imposed by the provisions of Section [2 of this act] 59A-12-26 NMSA 1978 shall be deposited in the insurance licensee continuing education fund [and are appropriated] for the purpose of administering the continuing education program [pursuant to the provisions of Section 59A-12-26 NMSA 1978 to be expended upon voucher by the superintendent of insurance]."

SECTION 46. A new section of Chapter 59A, Article 12 NMSA 1978 is enacted to read:

"[NEW MATERIAL] ASSUMED NAMES.--An insurance producer shall not do business under any name other than the insurance producer's legal name without prior written approval of the superintendent."

SECTION 47. A new section of Chapter 59A, Article 12 NMSA 1978 is enacted to read:

"[NEW MATERIAL] COMMISSIONS.--

A. An insurance company or insurance producer shall not pay a commission, service fee, brokerage or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under Chapter 59A, Article 12 NMSA 1978 and is not so licensed.

B. A person shall not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under Chapter 59A, Article 12 NMSA 1978 and is not so licensed.

C. Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if the person was required to be licensed under Chapter 59A, Article 12 NMSA 1978 at the time of the sale, solicitation or negotiation and was so licensed at that time.

D. An insurer or insurance producer shall not pay or assign commissions, service fees, brokerages or other valuable consideration to an insurance agency or to persons who do not sell, solicit or negotiate insurance in this state."

SECTION 48. A new section of Chapter 59A, Article 12 NMSA 1978 is enacted to read:

"[NEW MATERIAL] COMPENSATION DISCLOSURE.--

A. When any insurance producer or any affiliate of the insurance producer receives any compensation from a customer for the placement of insurance or represents the customer with respect to that placement, neither that insurance producer nor the affiliate shall accept or receive any compensation from an insurer or other third party for that placement of insurance unless the insurance producer has, prior to the customer's purchase of insurance:

(1) obtained the customer's documented acknowledgment that such compensation will be received by the insurance producer or affiliate; and

(2) disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the insurance producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount.

B. Subsection A of this section does not apply to an insurance producer who:

(1) does not receive compensation from the customer for the placement of insurance;

(2) represents an insurer that has appointed the insurance producer in connection with that placement of insurance; and

(3) discloses to the customer prior to the purchase of insurance:

(a) that the insurance producer will receive compensation from an insurer in connection with that placement; or

(b) that, in connection with that placement of insurance, the insurance producer represents the insurer and that the insurance producer may provide services to the customer for the insurer.

C. A person shall not be considered a customer for purposes of this section if the person is merely:

(1) a participant or beneficiary of an employee benefit plan; or

(2) covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate.

D. This section does not apply to:

(1) a person licensed as an insurance producer who acts only as an intermediary between an insurer and the customer's insurance producer, for example, a managing general agent, a sales manager or wholesale broker; or

(2) a reinsurance intermediary.

E. For purposes of this section:

(1) "compensation from an insurer or other third party" means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement; and

(2) "documented acknowledgment" means the customer's written consent obtained prior to the customer's purchase of insurance. In the case of a purchase over the telephone or by electronic means for which written consent cannot reasonably be obtained, consent documented by the producer shall be acceptable."

SECTION 49. Section 59A-12A-2 NMSA 1978 (being Laws 1989, Chapter 374, Section 2) is amended to read:

"59A-12A-2. DEFINITIONS.--As used in Chapter 59A, Article 12A NMSA 1978:

A. unless otherwise specified in that article, all definitions of the Insurance Code apply;

B. "administrator" or "third party administrator" or "TPA" means a [person who] business entity that receives any form of administrative or service fee, consideration, payment, premium, reimbursement or compensation for performing or providing any service, function or duty, or activity respecting insurance or alternatives to insurance in any administrative or management capacity, including but not limited to claims or expense review, underwriting, administration and management under a contract or other agreement to be performed in this state or with respect to risks located or partially located in this state or on behalf of persons in this state for any:

(1) plan;

(2) insurance carrier; or

(3) person that self insures;

C. "administrator" does not include:

(1) an employer on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of that employer as long as only the functions of a group policyholder are performed;

(2) a union on behalf of its members as long as only the functions of a group policyholder are performed;

(3) an insurance company or a corporation [which] that owns more than fifty percent of an insurance company licensed in this state or a health maintenance organization, nonprofit health care plan or a dental plan that is licensed in this state;

(4) an [agent] insurance producer licensed in this state acting on behalf of an admitted insurance carrier by whom [he] the insurance producer is appointed and only within the scope of [his] the insurance producer's license as an [agent] insurance producer as defined in the article of the Insurance Code under which [he] the insurance producer is licensed;

(5) a creditor on behalf of its debtors with respect to insurance covering its debtors as long as only the functions of a group policyholder or creditor are performed;

(6) a trust and its trustees, agents and employees acting under the trust, established in conformity with 29 U.S.C. Sec. 186;

(7) a trust exempt from taxations under Section 501(a) of the Internal Revenue Code of 1986, and its trustees and employees acting under the trust, or a custodian and its agents and employees acting pursuant to a custodian account that meets the requirements of Section 401(f) of the Internal Revenue Code of 1986;

(8) a bank that is subject to supervision or examination by federal or state regulatory authorities as long as the bank is only performing the function for which it is licensed;

(9) a company that advances and collects any premium or charge from its credit card holders who have authorized it to do so, provided the company does not adjust or settle claims and acts only in its debtor-creditor relationship with its credit card holders;

(10) a person who adjusts or settles claims in the normal course of [his] practice or employment as an attorney at law who does not collect any charge or premium in connection with life or health coverage or annuities;

(11) an adjuster licensed by the superintendent, when engaged in the performance of [his] duties as an adjuster;

(12) any joint fund, risk management pool or self-insurance pool composed of political subdivisions of this state that participate in such funds or pools through interlocal agreements, and any administrative agency established under the interlocal agreement to administer the fund or pool;

(13) [any] a person providing technical, advisory or consulting services who does not make [any] management or discretionary decisions on behalf of an insurance carrier, plan or person that self-insures;

(14) [any] a full-time salaried employee of an insurance carrier to the extent that the functions performed are only for that insurance carrier or any affiliated carrier;

(15) attorneys in fact for a Lloyd's or reciprocal exchange as authorized respectively in Chapter 38 or 39 NMSA 1978, while acting as attorney in fact for such Lloyd's or reciprocal exchange;

(16) a certified public accountant, attorney at law or actuary when performing duties or undertaking responsibilities within the authority and scope of that particular profession;

(17) an association and any subsidiary, affiliated or related corporations of that association. For the purposes of this subsection, "association" means a bona fide trade or professional association which has been in existence for not less than five years and which enters into agreements to pool its liabilities for workers compensation benefits, pursuant to the Group Self-Insurance Act; or

(18) a home owner warranty corporation provided by a trade association that has been in business in New Mexico for [a] at least five years;

D. "alternatives to insurance" means [any] an agreement to indemnify against loss, risk, damage, liability or other contingency relating to property or persons, whether or not such agreement is deemed to be insurance under applicable law or where persons self insure;

E. "bank" means a bank, savings and loan association, credit union or other financial institution authorized by law to accept and maintain deposits;

F. ["person" includes] "business entity" means a corporation, organization, government or governmental subdivision or agency, business trust, estate trust, partnership, association or any other legal entity; and

G. "plan" means any employer-employee, multiple employer-employee, group, member or other employee benefit or welfare program, medical, accident, sickness, injury, indemnity, death or health benefit program contracting to provide indemnification or expense reimbursement in this state to persons domiciled in this state or for risks located or partially located in this state for any type of the following coverages, expenses or benefits: medical, surgical, orthopedic, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, workers' compensation or optometric plan or programs, hospital care or benefit or benefits in the event of sickness, accident, disability, death or unemployment, or prepaid legal services."

SECTION 50. Section 59A-12A-3 NMSA 1978 (being Laws 1989, Chapter 374, Section 3) is amended to read:

"59A-12A-3. LICENSE REQUIRED--PENALTY.--

A. No administrator shall perform or provide any service, function, duty or activity respecting any insurance, plan, self-insurance or alternatives to insurance in [any] an administrative or management capacity in this state or with respect to risks located or partially located in this state or on behalf of persons in this state unless licensed as an administrator under the Insurance Code.

B. Licensing [and examination] procedures for administrators shall be in accordance with Chapter 59A, Article 11 NMSA 1978. [except that the superintendent may, in his discretion, waive the examination requirements for administrators who are operating in New Mexico prior to the effective date of Chapter 59A, Article 12A NMSA 1978.

C. Every corporation or partnership to be licensed under Chapter 59A, Article 12A NMSA 1978 shall have every officer and manager of that corporation and every partner of that partnership licensed as an administrator.

D.] C. In addition to any applicable denial, suspension or revocation of a license, refusal to continue license or administrative fine, violation of this section shall be a misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000) and by forfeiture to the state of an amount equal to all compensation for services as administrator received or to be received by the violator by reason of the prohibited transactions."

SECTION 51. Section 59A-12B-2 NMSA 1978 (being Laws 1993, Chapter 320, Section 28) is amended to read:

"59A-12B-2. DEFINITIONS.--As used in the Managing General Agents Law:

A. "actuary" means a person who is a member in good standing of the American academy of actuaries;

B. "insurer" means any person, firm, association or corporation duly authorized in this state pursuant to the Insurance Code to transact the business of insurance;

C. "managing general agent" means any person, firm, association or corporation who:

(1) manages all or part of the insurance business of an insurer, including the management of a separate division, department or underwriting office;

(2) acts as an [agent] insurance producer for such insurer whether known as a managing general agent, manager or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following activities related to the business produced:

(a) adjusts or pays claims in excess of an amount determined by the superintendent; or

(b) negotiates reinsurance on behalf of the insurer; and

(3) notwithstanding the above, the following persons shall not be considered as managing general agents for the purposes of the Managing General Agents Law:

(a) an employee of the insurer;

(b) a United States manager of the United States branch of an alien insurer;

(c) an underwriting manager which, pursuant to contract, manages all or part of the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company Law, and whose compensation is not based on the volume of premiums written; and

(d) the attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and

D. "underwrite" means the authority to accept or reject risk on behalf of the insurer."

SECTION 52. Section 59A-12B-5 NMSA 1978 (being Laws 1993, Chapter 320, Section 31) is amended to read:

"59A-12B-5. DUTIES OF INSURERS.--

A. The insurer shall have on file an independent financial examination, in a form acceptable to the superintendent, of each managing general agent with which it has done business.

B. If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This is in addition to any other required loss reserve certification.

C. The insurer shall periodically, at least semiannually, conduct an on-site review of the underwriting and claims processing operations of the managing general agent.

D. Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.

E. Within thirty days of entering into or termination of a contract with a managing general agent, the insurer shall provide written notification of such appointment or termination to the superintendent. Notices of appointment of a managing general agent shall include a statement of duties which the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the superintendent may request.

F. An insurer shall review its books and records each quarter to determine if any [agent or broker] insurance producer has become a managing general agent. If the insurer determines that an [agent or broker] insurance producer has become a managing general agent, the insurer shall promptly notify the [agent or broker] insurance producer and the superintendent of such determination and the insurer and [agent or broker] insurance producer must fully comply with the provisions of the Managing General Agents Law within thirty days.

G. An insurer shall not appoint to its board of directors an officer, director, employee, [subagent or broker] insurance producer or controlling shareholder of its managing general agents. This subsection shall not apply to relationships governed by the Insurance Holding Company Law or, if applicable, the Broker Controlled Insurer Law."

SECTION 53. Section 59A-12B-7 NMSA 1978 (being Laws 1993, Chapter 320, Section 33) is amended to read:

"59A-12B-7. PENALTIES AND LIABILITIES.--

A. If the superintendent determines that the managing general agent or any other person has not materially complied with the provisions of Chapter 59A, Article 12B NMSA 1978, or any [regulation] rule or order promulgated thereunder, after notice and opportunity to be heard, the superintendent may order:

(1) for each separate violation, a penalty in an amount not exceeding ten thousand dollars ($10,000);

(2) revocation or suspension of the managing general agent's license; and

(3) if it was found that because of such material noncompliance that the insurer has suffered any loss or damage, the superintendent may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors or seek other appropriate relief.

B. If an order of rehabilitation or liquidation of the insurer has been entered pursuant to Chapter 59A, Article 41 NMSA 1978, and the receiver appointed under that order determines that the managing general agent or any other person has not materially complied with the provisions of Chapter 59A, Article 12B NMSA 1978, or any regulation or order promulgated thereunder, and the insurer suffered any loss or damage, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.

C. Nothing contained in this section shall affect the right of the superintendent to impose any other penalties provided for in the Insurance Code.

D. Nothing contained in the Managing General Agents Law is intended to or shall in any manner limit or restrict the rights of policyholders, claimants or creditors."

SECTION 54. Section 59A-13-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 232, as amended) is amended to read:

"59A-13-4. QUALIFICATIONS FOR LICENSE AS ADJUSTER.--

A. The superintendent shall license as an adjuster only an individual who is otherwise in compliance with Chapter 59A, Articles 11 and 13 NMSA 1978 and who has furnished evidence satisfactory to the superintendent that the applicant for license:

(1) is not less than eighteen years of age;

(2) is a bona fide resident of this state, or of a state or country that permits residents of this state to act as adjusters therein, except that under circumstances of necessity the superintendent may waive the requirement of reciprocity;

(3) can demonstrate a good business reputation, and intends to engage in a bona fide manner in the business of adjusting insurance claims;

(4) except as to temporary license provided for under Section 59A-13-6 NMSA 1978, has had at least one year's experience or special education or training in handling of losses or claims under insurance contracts, such experience, education and training to be of such nature and extent as to demonstrate the applicant's competence to fulfill the responsibilities of an adjuster; [and]

(5) has passed any examination required for licensing; and

[(5)] (6) has filed the bond required under Section 59A-13-5 NMSA 1978.

B. Paragraphs (2) and [(5)] (6) of Subsection A of this section shall not apply as to staff adjusters.

C. Individuals holding licenses as adjusters on the effective date of the Insurance Code shall be deemed to meet the qualifications for the license except as provided in Chapter 59A, Articles 11 and 13 NMSA 1978.

D. A business entity applying for an independent adjuster license for the purposes of portable electronics insurance in New Mexico shall submit the names, addresses, social security numbers, criminal and administrative histories, background checks, biographical statements and fingerprints of all executive officers and directors of the applicant and of all executive officers and directors of entities owning and any individuals owning, directly or indirectly, fifty-one percent or more of the outstanding voting securities of the applicant. Any nonresident business entity applicant whose resident state has enacted into law provisions that are substantively duplicative of the provisions of this subsection shall not be required to submit criminal histories, background checks, biographical statements and fingerprints for its executive officers, directors and owners of outstanding voting securities."

SECTION 55. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:

"[NEW MATERIAL] EXAMINATION FOR LICENSE.--

A. A resident individual applying for a license as an adjuster shall, prior to issuance of a license, personally take and pass a written examination. The examination shall test the knowledge of the individual concerning the duties and responsibilities of an adjuster and the insurance laws and rules of this state. Examinations required by this section shall be developed and conducted under rules prescribed by the superintendent.

B. The superintendent may contract with an outside testing service for administering examinations and collecting the nonrefundable fee set forth in Section 59A-6-1 NMSA 1978.

C. Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the superintendent as set forth in Section 59A-6-1 NMSA 1978.

D. An individual who fails to appear for an examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and

forms before being rescheduled for another examination.

E. No examination shall be required:

(1) for renewal or continuation of an existing license, except as provided in Subsection D of Section 59A-11-10 NMSA 1978;

(2) of applicants for a temporary license as provided in Section 59A-13-6 NMSA 1978; or

(3) if the applicant took and passed a similar examination in a state in which the applicant is already licensed, subject to Section 59A-5-33 NMSA 1978."

SECTION 56. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:

"[NEW MATERIAL] CONTINUING EDUCATION.--

A. The superintendent shall require as a condition to continuation of an adjuster license that during the twenty-four months next preceding expiration of the current license period, the licensee has attended the minimum number of hours of formal class instruction, lectures or seminars required and approved by the superintendent.

C. The superintendent may permit licensees who, because of remoteness of residence or business, cannot with reasonable convenience attend formal instruction sessions to successfully complete an equivalent course of study and instruction online or by mail.

D. The superintendent may impose a penalty not to exceed fifty dollars ($50.00) for a licensee's failure to timely report continuing education credits.

E. The superintendent shall charge, at the time of certifying each licensee's continuing education credits as a condition of continuation of license, a fee of one dollar ($1.00) per credit hour of continuing education; provided that the superintendent may contract with an independent agency to receive and review a continuing education compliance report, and in such a case, the fee shall be a reasonable amount fixed by the superintendent and payable to the contracting agency."

SECTION 57. Section 59A-14-9 NMSA 1978 (being Laws 1984, Chapter 127, Section 247) is amended to read:

"59A-14-9. SURPLUS LINE BROKER MAY ACCEPT BUSINESS FROM [AGENTS] INSURANCE PRODUCERS--COMPENSATION OF OTHERS PROHIBITED.--

A. A surplus line broker may accept and export surplus line business from and for any insurance [agent or broker] producer licensed by this state for the kind of insurance involved, and may compensate the [agent or broker] insurance producer therefor.

B. A surplus line broker shall not directly or indirectly compensate any person other than [such] a licensed [agent or broker as to] insurance producer for origination of [such] business. This provision shall not be deemed to prohibit payment of regular salaries to the surplus line broker's employees or sharing of compensation with other persons entitled thereto under firm and corporate agreements and surplus line broker licenses. Violation of this provision is a misdemeanor."

SECTION 58. Section 59A-16-14 NMSA 1978 (being Laws 1984, Chapter 127, Section 280) is amended to read:

"59A-16-14. COERCION OF BUSINESS PROHIBITED--NOTICE REQUIRED--CHARGES PROHIBITED.--

A. No person engaged in selling real or personal property or in the business of financing the purchase of real or personal property, or of lending money on the security of real or personal property, and no trustee, director, officer, agent or other employee of [any such] the person shall require, as a condition precedent, concurrent or subsequent to the sale, or financing the purchase of [such] property, or to lending money upon the security of a mortgage [thereon] on the property, or as a condition precedent, concurrent or subsequent, for the renewal or extension of [any such] the loan or mortgage or for the performance of any other act in connection therewith, that the person purchasing [such] the property, or for whom [such] the purchase is to be financed, or to whom the money is to be loaned, or for whom [such extention] the extension, renewal or other act is to be granted, or performed, negotiate [any] a policy of insurance or renewal [thereof] covering [such] the property through a particular insurer [agent, solicitor or broker] or insurance producer. The lender is required to inform the buyer of [his] the buyer's rights regarding the placing of insurance on a form prescribed by the superintendent. The buyer must signify that [he] the buyer has been so informed. This section shall not prevent the exercise by [any] a person of [his] the right to designate the terms and provisions of the policy and the amount of coverage with respect to insurance on property pledged or mortgaged to [such] the person.

B. An insured shall have the option, in addition to the rights granted [him] under the terms and conditions of [his] the insurance contract, at any time to substitute, replace, change or extend the existent policy in force. For the purpose of this section "anniversary date" means the yearly return of the inception of the effective date of policy in force.

C. If the lender signifies that the proposed insurance is acceptable, the buyer must supply [him] the lender with the policy or binder prior to the closing of the loan.

D. If the policy is cancelled by the insurer, the borrower must have a new policy in the hands of the lender twenty-four [(24)] hours prior to the effective day of the cancellation.

E. The borrower or [his] the borrower's insurance [agent] producer must deliver a renewal policy or an annual renewal certificate to the lender at least fifteen [(15)] days prior to expiration or renewal of the policy in force if required by the lender.

F. When the insured wants to change insurance [agents] producers, the [agent] insurance producer writing the renewal business must file with the lender a current letter of authority signed by the borrower. If a change of [agents] insurance producers is involved in the renewal of the policy, the lender shall notify the [agent] insurance producer renewing the insurance and the borrower in writing within five [(5)] business days after tender of renewal policy, if the renewal policy is not acceptable to the lender.

G. No person engaged in selling real or personal property or in the business of financing the purchase of real or personal property or of lending money on the security of real or personal property shall charge, either directly or indirectly to [any] a borrower or debtor a consideration of any kind to substitute the insurance policy of one insurer of [such] the property for that of another, or make [any] a charge for [any] a change in the kind, type or amount of [such] the insurance if the change is made at the time the borrower or debtor first becomes a party to the transaction for which the insurance is required, or at [any] an annual renewal date of the policy.

H. No person engaged in the business of selling real or personal property or financing purchase or lending money on security of real or personal property shall share information received in connection with an application for credit in [any such] the purchase or for [such] the loan with any parent corporation, subsidiary or affiliate of [such] the person or with [any] an insurer, for the purpose of soliciting insurance, unless [such] the person has written authorization to release [such] the information executed by the purchaser or borrower subsequent to extension of credit or making of the loan.

I. In addition to other penalties provided in Section [18 (general penalty) of the Insurance Code, any] 59A-1-18 NMSA 1978, a lender who violates this section shall be liable in a civil action brought by [any] a buyer, insured or insurance [agent] producer injured by the violation, or each of them, for an amount of liquidated damages equal to the amount of [his] actual damages as a result of coercion prohibited by this section."

SECTION 59. Section 59A-16-17 NMSA 1978 (being Laws 1984, Chapter 127, Section 283, as amended) is amended to read:

"59A-16-17. UNFAIR DISCRIMINATION, REBATES PROHIBITED--OTHER COVERAGES.--

A. No property, casualty [marine and transportation, surety, vehicle] or title insurer, or nonprofit health care or prepaid dental plan or other insurance-type organization, or any employee or representative thereof, and no [broker, agent, solicitor] insurance producer or other representative shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance or coverage, or after insurance or coverage has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified or provided for in the policy, except to the extent provided for in an applicable filing with the superintendent as provided by law.

B. No title insurer or title insurance [agent] producer shall:

(1) pay, directly or indirectly, to the insured or any person acting as agent, representative, attorney or employee of the owner, lessee, mortgagee, existing or prospective, of the real property, or interest therein, that is the subject matter of title insurance or as to which a service is to be performed any commission or part of its fee or charges or other consideration as inducement or compensation for the placing of any order for a title insurance policy or for performance of any escrow or other service by the insurer with respect thereto;

(2) issue any policy or perform any service in connection with which it or any [agent] insurance producer or other person has paid or contemplates paying any commission, rebate or inducement in violation of this section;

(3) give or receive, directly or indirectly, any consideration or thing of value for the referral of title insurance business or escrow or other service provided by a title insurer or title insurance [agent] producer unless otherwise permitted by regulation of the superintendent; or

(4) enter into a reinsurance agreement with an affiliate of a real estate developer, real estate agency, mortgage lender or referrer of title business without the prior written approval of the superintendent.

C. No insured named in a policy or any employee of such insured shall knowingly receive or accept, directly or indirectly, any such rebate, discount, abatement, credit or reduction of premium, or any such special favor or advantage or valuable consideration or inducement.

D. No such insurer or organization shall make or permit any unfair discrimination between insureds or property having like insuring or risk characteristics, in the premium or rates charged for insurance or coverage, or in the dividends or other benefits payable thereon or in any other of the terms and conditions of the insurance or coverage.

E. Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to licensed [agents, brokers, solicitors] insurance producers or other representatives; or as prohibiting the extension of credit to an insured for the payment of any premium and for which credit a reasonable rate of interest is charged and collected; or as prohibiting any insurer or [agent] insurance producer from allowing or returning to its participating policyholders, members or subscribers, dividends, savings or unabsorbed premium deposits. As to title insurance, nothing in this section shall prohibit bulk rates or special rates for customers of prescribed classes if such bulk or special rates are provided for in the currently effective schedule of fees and charges of the title insurer as filed with the superintendent.

[F. This section does not apply to wet marine and transportation insurance.]"

SECTION 60. Section 59A-18-24 NMSA 1978 (being Laws 1984, Chapter 127, Section 353) is amended to read:

"59A-18-24. [AGENTS, BROKERS] INSURANCE PRODUCERS--WHOM THEY REPRESENT.--[Any] A licensed [agent] insurance producer appointed as [agent] insurance producer by an insurer shall, in any controversy between the insured or [his] the insured's beneficiary and the insurer, be held to be the agent of the insurer [which] that issued the insurance solicited or applied for, anything in the application or policy to the contrary notwithstanding; and [any] a broker licensed to transact insurance business in this state, in any controversy between [any] the insured or [his] the insured's beneficiary and the insurer issuing the insurance through its licensed [agent] insurance producer at request of the broker, shall be held to be the agent of the insured, anything in the application or policy to the contrary notwithstanding, unless under particular circumstances it is found that the broker is representing the insurer. This section shall not apply as to surplus line brokers, nor as to acts of the [agent] insurance producer in fraud or attempted fraud of the insurer or acts of the broker in fraud or attempted fraud of the insured."

SECTION 61. Section 59A-30-4 NMSA 1978 (being Laws 1985, Chapter 28, Section 4, as amended) is amended to read:

"59A-30-4. CONTROL AND SUPERVISION BY SUPERINTENDENT.--

A. Title insurers and title insurance [agents] producers shall operate in New Mexico under the control and supervision of the superintendent. The superintendent shall promulgate such rules and regulations as are necessary to carry out the provisions of the New Mexico Title Insurance Law. The superintendent may adopt uniform rules and regulations to address underwriting standards and practices, including but not limited to rules and regulations that prohibit title insurers from insuring specified risks that the superintendent determines may pose an unreasonable risk to the financial stability of title insurers.

B. No title insurer or title insurance [agent] producer shall collect any premium, issue any title insurance policy or agency agreement, or reinsure any portion of the risk assumed under any title insurance policy, other than in conformance with the New Mexico Title Insurance Law and rules and regulations adopted by the superintendent as authorized by the New Mexico Title Insurance Law."

SECTION 62. Section 59A-30-6 NMSA 1978 (being Laws 1985, Chapter 28, Section 6, as amended) is amended to read:

"59A-30-6. PREMIUMS--AGENCY AGREEMENTS--DUTY TO PROMULGATE REASONABLE RATES--EXCEPTION.--

A. The superintendent shall promulgate the premium rates of title insurers and title insurance [agents] producers for title insurance policies and the percentage of premium to be retained by title insurers under agency agreements, except that premium rates for reinsurance as between title insurers shall not be promulgated by the superintendent. No premium that has not been promulgated or approved by the superintendent shall be charged for any title insurance policy. The superintendent shall not promulgate charges of title insurers and title insurance [agents] producers other than premium rates for title insurance policies and the percentage of premium to be retained by title insurers under agency agreements.

B. The superintendent shall promulgate additional premium rates for searches or examinations of title conducted or performed for the purpose of issuance of a title insurance policy when the search or examination involves more than one chain of title or other unusual complexity.

C. Premium rates promulgated by the superintendent shall not be excessive, inadequate or unfairly discriminatory and shall contain an allowance permitting a profit that is not unreasonable in relation to the risks incurred in the business of title insurance. Premium rates may include an allowance for recoupment of assessments made pursuant to the Title Insurance Guaranty Act.

D. Title insurance [agents] producers shall retain not less than eighty percent of the gross premiums collected on commitments, policies and endorsements issued for one to four family residential property transactions with a liability amount of not more than two million dollars ($2,000,000); provided, however, that from July 1, 2009 until otherwise ordered by the superintendent, title insurance [agents] producers shall retain not less than eighty-one percent of the gross premiums collected on commitments, policies and endorsements issued for one to four family residential property transactions with a liability amount of not more than two million dollars ($2,000,000). The portion of the premium to be retained by the title insurance [agent] producers for policies with a liability amount greater than two million dollars ($2,000,000) shall be set by rule.

E. A title insurer may file with the superintendent proposed title insurance rates for a specific county or counties lower than the premium rate promulgated by the superintendent. The superintendent shall provide notice of the filed title insurance rates to all [agents] insurance producers and underwriters doing business in that county or counties and may conduct a hearing. In determining whether to approve filed title insurance rates, the superintendent shall consider the interests and protection of consumers and independent title insurance [agents] producers and the potential impact on competition within the title insurance industry. Upon approval of the filed title insurance rates, the title insurer and its [agents] insurance producers shall use the filed and approved title insurance rates.

F. The superintendent shall adopt rules to establish standards and procedures by which a title insurance rate lower than the promulgated rate shall be filed and may be approved."

SECTION 63. Section 59A-32A-4 NMSA 1978 (being Laws 2001, Chapter 94, Section 4) is amended to read:

"59A-32A-4. LICENSING RENTAL CAR COMPANIES AS RENTAL CAR AGENTS.--A rental car company may apply to be licensed as a rental car agent under the terms of the Rental Car Insurance Limited Producer License Act if it satisfies all of the requirements of that act and if it files the following documents with the superintendent of insurance:

A. a written application for licensure, signed by the applicant or by an officer of the applicant, in the form prescribed by the superintendent of insurance that includes a listing of all locations at which the rental car company intends to offer, sell, bind, effect, solicit or negotiate rental car insurance; and

B. a certificate filed by the insurer for the applicant stating that the insurer has satisfied itself that the applicant is trustworthy and competent to act as its insurance [agent] producer limited to this purpose; that the insurer has reviewed the employee training program required by Subsection D of Section [5 of the Rental Car Insurance Limited Producer License Act] 59A-32A-5 NMSA 1978 and believes that it satisfies the statutory requirements; and that the insurer will appoint the applicant to act as its [agent] insurance producer to transact the kinds of insurance that are permitted by the Rental Car Insurance Limited Producer License Act if the license for which the applicant is applying is issued by the superintendent of insurance. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the superintendent of insurance."

SECTION 64. Section 59A-32A-7 NMSA 1978 (being Laws 2001, Chapter 94, Section 7) is amended to read:

"59A-32A-7. RENTAL CAR AGENT AND ENDORSEE PROHIBITIONS.--A rental car agent or endorsee shall not:

A. offer, sell, bind, effect, solicit or negotiate the purchase of rental car insurance except in conjunction with and incidental to rental agreements;

B. advertise, represent or otherwise portray itself or any of its employees or agents as licensed insurers [insurance agents] or insurance [brokers] producers; or

C. pay any person, including a rental car endorsee, any compensation, fee or commission that is dependent solely on the placement of insurance under the license issued pursuant to the Rental Car Insurance Limited Producer License Act. Nothing in this section shall prohibit production payments or incentive payments to a person that are not dependent solely upon the sale of insurance."

SECTION 65. Section 59A-38-11 NMSA 1978 (being Laws 1984, Chapter 127, Section 654) is amended to read:

"59A-38-11. LLOYDS PLAN [AGENTS AND SOLICITORS] INSURANCE PRODUCERS--LICENSING.--The provisions of the Insurance Code as to qualifications, appointment, licensing and regulation of insurance [agents and solicitors] producers apply neither to the attorney-in-fact at Lloyds nor to [the] a salaried representative of Lloyds who receives no commission, but do apply to any [agent or solicitor] insurance producer who receives any commission."

SECTION 66. Section 59A-46-17 NMSA 1978 (being Laws 1993, Chapter 266, Section 17) is amended to read:

"59A-46-17. REGULATION OF HEALTH MAINTENANCE ORGANIZATION [AGENTS] INSURANCE PRODUCERS.--

A. Requirements and procedures for licensing of health maintenance organization [agents] insurance producers shall be governed by the provisions of Chapter 59A, Articles 11 and 12 NMSA 1978 and any regulations adopted by the superintendent pertaining [thereto] to those articles.

B. None of the following shall be required to hold a health maintenance organization [agent] insurance producer license:

(1) any regular salaried officer or employee of a health maintenance organization who devotes substantially all of [his] that person's time to activities other than the taking or transmitting of applications or membership fees or premiums for health maintenance organization membership or who receives no commission or other compensation directly dependent upon the business obtained and who does not solicit or accept from the public applications for health maintenance organization membership;

(2) employers or their officers or employees or the trustees of any employee benefit plan to the extent that such employers, officers, employees or trustees are engaged in the administration or operation of any program of employee benefits involving the use of health maintenance organization memberships, if those employers, officers, employees or trustees are not compensated directly or indirectly by the health maintenance organization issuing [such] the health maintenance organization memberships;

(3) banks or their officers and employees to the extent that such banks, officers and employees collect and remit charges by charging same against accounts of depositors on the orders of such depositors; or

(4) any person or the employee of any person who has contracted to provide administrative, management or health care services to a health maintenance organization and who is compensated for those services by the payment of an amount calculated as a percentage of the revenues, net income or profit of the health maintenance organization, if that method of compensation is the sole basis for subjecting that person or the employee of the person to the provisions of the Health Maintenance Organization Law.

C. The superintendent may by rule exempt certain classes of persons from the requirement of obtaining a license if:

(1) the functions they perform do not require special competence, trustworthiness or the regulatory surveillance made possible by licensing; or

(2) other existing safeguards make regulation unnecessary."

SECTION 67. Section 59A-47-30 NMSA 1978 (being Laws 1984, Chapter 127, Section 879.29, as amended by Laws 1999, Chapter 272, Section 23 and also by Laws 1999, Chapter 289, Section 35) is amended to read:

"59A-47-30. LICENSED [AGENTS OR SOLICITORS] INSURANCE PRODUCERS REQUIRED--QUALIFICATIONS, LICENSING PROCEDURES AND CONDITIONS.--

A. Solicitation of subscriberships for a health care plan shall be made only by [agents] insurance producers of [such] the plan [or solicitors of such agents] who are duly qualified, appointed and licensed as such under the Insurance Code. This provision shall not apply [as] to salaried officers or employees of health care plans who are visiting or instructing their licensed [agents] insurance producers and who do not receive any part of the commission for any business written by such [agents] insurance producers with their assistance.

B. No person shall be appointed or licensed as a health care plan [agent or solicitor] insurance producer unless qualified [therefor] as follows:

(1) is an individual at least eighteen years of age;

(2) has had, or will receive, reasonable experience or instruction in the health care plan for which license is applied;

(3) is [be] trustworthy and of good business reputation;

(4) intends to engage in a bona fide way in the business of the health care plan; and

(5) passes [to the superintendent's satisfaction] an examination for license [as] given by or under authorization of the superintendent.

C. A health care plan [agent] insurance producer shall be appointed by and at any one time represent only one [such] health care plan.

D. Subject to the other provisions of this section, procedures for appointment and licensing [such agents and solicitors] insurance producers, examination, issuance or denial of license, continuation or expiration, suspension, revocation or refusal to continue license and other applicable matters relating to [such] licensing and licenses shall be as provided as to licenses of [agents and solicitors] insurance producers as to health insurance under Chapter 59A, Article 11 NMSA 1978. Fee for application for license and continuation of license shall be as specified in Section 59A-6-1 NMSA 1978, and neither fee shall be refundable."

SECTION 68. Section 59A-55-6 NMSA 1978 (being Laws 1988, Chapter 125, Section 6) is amended to read:

"59A-55-6. TAXATION OF RISK RETENTION GROUPS.--

A. Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within New Mexico and shall report to the superintendent the net premium written for risks resident or located within New Mexico. The risk retention group shall be subject to taxation and any applicable fines and penalties related thereto, on the same basis as an admitted insurer.

B. To the extent licensed [agents or brokers] insurance producers are utilized pursuant to Section [24 of the Risk Retention and Purchasing Group Act] 59A-55-24 NMSA 1978, they shall report to the superintendent the premiums for direct business for risks resident or located within this state, which [such licensees] the insurance producers have placed with or on behalf of a risk retention group not licensed in this state.

C. To the extent that insurance [agents or brokers] producers are utilized pursuant to Section [24 of the Risk Retention and Purchasing Group Act, such agent or broker] 59A-55-24 NMSA 1978, the insurance producer shall keep a complete and separate record of all policies procured from each such risk retention group, which record shall be open to examination by the superintendent and shall contain the information required by the superintendent by [regulation] rule."

SECTION 69. Section 59A-55-24 NMSA 1978 (being Laws 1988, Chapter 125, Section 24, as amended by Laws 1999, Chapter 272, Section 27 and also by Laws 1999, Chapter 289, Section 41) is amended to read:

"59A-55-24. DUTY OF [AGENTS OR BROKERS] INSURANCE PRODUCERS TO OBTAIN LICENSE.--

A. No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance in New Mexico from a risk retention group unless such person, firm, association or corporation is licensed as an insurance [agent or broker] producer pursuant to the provisions of the New Mexico Insurance Code.

B. No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance:

(1) in New Mexico for a purchasing group from an authorized insurer or a risk retention group chartered in a state, unless such person, firm, association or corporation is licensed as an insurance [agent or broker] producer pursuant to the provisions of the New Mexico Insurance Code;

(2) in New Mexico for any members of a purchasing group under a purchasing group's policy, unless such person, firm, association or corporation is licensed as an insurance [agent or broker] producer pursuant to the provisions of the New Mexico Insurance Code; or

(3) from an insurer not authorized to do business in New Mexico on behalf of a purchasing group located in this state, unless such person, firm, association or corporation is licensed as a surplus lines agent or excess line broker pursuant to the provisions of the New Mexico Insurance Code.

C. Every person, firm, association or corporation licensed pursuant to the provisions of the New Mexico Insurance Code on business placed with risk retention groups or written through a purchasing group shall inform each prospective insured of the provisions of the notice required by Section 59A-55-10 NMSA 1978 in the case of a purchasing group."

SECTION 70. REPEAL.--Sections 59A-7-5, 59A-7-8, 59A-7-9, 59A-11-19, 59A-12-5, 59A-12-6, 59A-12-8 through 59A-12-10, 59A-12-14, 59A-12-20.1 and 59A-12B-3 NMSA 1978 (being Laws 1984, Chapter 127, Sections 111, 114, 115, 198, 205, 206, 207, 209 and 210, Laws 1997, Chapter 48, Section 1, Laws 1984, Chapter 127, Section 215, Laws 2003, Chapter 306, Section 5 and Laws 1993, Chapter 320, Section 29, as amended) are repealed.

SECTION 71. SEVERABILITY.--If any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.

SECTION 72. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

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