0001| HOUSE BUSINESS AND INDUSTRY COMMITTEE SUBSTITUTE FOR | 0002| HOUSE BILL 346 | 0003| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0004| | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO INSURANCE; ENACTING THE DOMESTIC ABUSE INSURANCE | 0013| PROTECTION ACT; PROHIBITING INSURERS FROM DISCRIMINATING | 0014| AGAINST PERSONS ON THE BASIS OF DOMESTIC ABUSE; PROVIDING | 0015| PENALTIES; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978. | 0016| | 0017| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0018| Section 1. A new section of the New Mexico Insurance Code | 0019| is enacted to read: | 0020| "[NEW MATERIAL] SHORT TITLE.--Sections 1 through 11 of | 0021| this act may be cited as the "Domestic Abuse Insurance | 0022| Protection Act"." | 0023| Section 2. A new section of the New Mexico Insurance Code | 0024| is enacted to read: | 0025| "[NEW MATERIAL] PURPOSE OF ACT.--The purpose of the | 0001| Domestic Abuse Insurance Protection Act is to prohibit insurers | 0002| from unlawfully discriminating on the basis of domestic abuse | 0003| by using the fact of domestic abuse or the insurer's perception | 0004| of a person's abuse status as an insurance criterion or rating | 0005| factor. The Domestic Abuse Insurance Protection Act protects | 0006| victims of domestic abuse, domestic abuse shelters and others | 0007| from being unlawfully discriminated against in insurance | 0008| matters." | 0009| Section 3. A new section of the New Mexico Insurance Code | 0010| is enacted to read: | 0011| "[NEW MATERIAL] DEFINITIONS.--As used in the Domestic | 0012| Abuse Insurance Protection Act: | 0013| A. "abuse-related medical condition" means a | 0014| medical condition sustained by a victim of domestic abuse that | 0015| arises in whole or in part out of an act or pattern of abuse; | 0016| B. "abuse status" means the fact or the perception | 0017| by the insurer that a person is a victim of domestic abuse, | 0018| irrespective of whether the person has sustained abuse-related | 0019| medical conditions; | 0020| C. "confidential abuse information" means | 0021| information about acts of domestic abuse or abuse status, the | 0022| work or home address or telephone number of a victim of | 0023| domestic abuse or the status of an applicant or insured as a | 0024| family member, employer or associate of a victim of domestic | 0025| abuse or a person with whom an applicant or insured is known to | 0001| have a direct, close personal, family or abuse-related | 0002| counseling relationship; | 0003| D. "domestic abuse" means an act of abuse against a | 0004| person, an abuse-related medical condition suffered by a person or | 0005| the abuse status of a person, including a minor, that was caused | 0006| by a family member or a current or former household member, | 0007| intimate partner or caretaker, including the following: | 0008| (1) attempting to cause or intentionally, | 0009| knowingly or recklessly causing bodily injury to, physical harm | 0010| to, severe emotional distress to, psychological trauma to or | 0011| sexual assault on or attempting to rape or raping another person; | 0012| (2) knowingly engaging in a course of conduct or | 0013| repeatedly committing acts, including harassment or stalking, that | 0014| are intended to or would cause a reasonable person, or do cause a | 0015| person, to feel terrorized or seriously threatened that death, | 0016| bodily harm, sexual assault, confinement or restraint may result; | 0017| (3) subjecting another person to false | 0018| imprisonment; or | 0019| (4) attempting to cause or intentionally, | 0020| knowingly or recklessly causing damage to property for the purpose | 0021| of intimidating or attempting to control the behavior of another | 0022| person; | 0023| E. "insured" means an individual named on a policy as | 0024| the one with legal rights to the benefits provided by the policy, | 0025| except for life insurance, for which "insured" means the | 0001| individual whose life is covered by the policy. For group | 0002| insurance, "insured" includes an individual who is a beneficiary | 0003| covered by a group policy. For any insurance policy, "insured" | 0004| does not include a person who commits an act of domestic abuse; | 0005| F. "insurer" means every person engaged as principal | 0006| or indemnitor, surety or contractor in the business of entering | 0007| into contracts of insurance, including life insurance, health | 0008| insurance, automobile insurance, disability insurance and property | 0009| and casualty insurance, and includes the insurance services | 0010| offered by fraternal benefit societies, nonprofit health care | 0011| plans, health maintenance organizations, prepaid dental services | 0012| organizations, motor clubs, agents, brokers, solicitors, adjusters | 0013| and all other persons engaged in a business that is now or later | 0014| becomes subject to the superintendent's supervision pursuant to | 0015| the Insurance Code, as well as all alien and foreign insurers | 0016| delivering or issuing for delivery in New Mexico a certificate or | 0017| other evidence of insurance coverage; | 0018| G. "person" means an individual or entity; | 0019| H. "policy" means a contract of insurance, | 0020| certificate, indemnity, suretyship or annuity issued by an | 0021| insurer, including endorsements or riders to an insurance policy | 0022| or contract, and includes a contract, certificate or agreement | 0023| offered by an insurer to provide, deliver, arrange for, pay for or | 0024| reimburse any of the costs of insurance services. As applied to a | 0025| health plan, "policy" includes a plan that is accident only, | 0001| credit health, dental, vision, medicare supplement or long-term | 0002| care insurance, coverage issued as a supplement to liability | 0003| insurance, short-term or catastrophic health insurance plan and a | 0004| plan that pays on a cost-incurred basis; and | 0005| I. "victim of domestic abuse" means a person against | 0006| whom domestic abuse is directed." | 0007| Section 4. A new section of the New Mexico Insurance Code | 0008| is enacted to read: | 0009| "[NEW MATERIAL] UNFAIR DISCRIMINATION ON THE BASIS OF A | 0010| PERSON'S ABUSE STATUS PROHIBITED.-- | 0011| A. An insurer or any person employed by or contracting | 0012| with an insurer shall not engage in an unfair discriminatory act | 0013| or practice against a person on the basis of a person's abuse | 0014| status, including: | 0015| (1) denying, refusing to issue, renew or reissue | 0016| or canceling or otherwise terminating a policy, restricting or | 0017| excluding coverage or benefits of a policy or charging a higher | 0018| premium for a policy on the basis of a person's abuse status; | 0019| (2) terminating group health coverage for a | 0020| victim of domestic abuse because coverage was originally issued in | 0021| the name of an alleged abuser who has divorced, separated from or | 0022| lost custody of a victim of domestic abuse or because the alleged | 0023| abuser's coverage has terminated voluntarily or involuntarily. | 0024| Nothing in this paragraph prohibits an insurer from requiring a | 0025| victim of domestic abuse to pay the full premium for health | 0001| insurance coverage or from requiring as a condition of coverage | 0002| that a victim of domestic abuse reside or work within the | 0003| insurer's service area, if the requirements are applied to all | 0004| insureds. The insurer may terminate group health coverage for a | 0005| victim of domestic abuse after the continuation coverage required | 0006| by this subsection has been in force for eighteen months if the | 0007| insurer offers conversion to an equivalent individual plan. The | 0008| continuation coverage required in this subsection may be satisfied | 0009| by coverage that is provided under the Consolidated Omnibus Budget | 0010| Reconciliation Act of 1985 to a victim of domestic abuse and is | 0011| not intended to be in addition to coverage provided under that | 0012| act; | 0013| (3) disclosing or transferring confidential | 0014| abuse information about acts of domestic abuse or abuse status | 0015| when the insurer or its employee or contractor has information in | 0016| its possession that clearly indicates that the applicant or | 0017| insured is a subject of domestic abuse. The provisions of this | 0018| paragraph do not prohibit disclosure of information: | 0019| (a) to a victim of domestic abuse or an | 0020| individual specifically designated in writing by the victim, and | 0021| nothing in this section prohibits a victim of domestic abuse from | 0022| obtaining the victim's own insurance records; | 0023| (b) to a health care provider for the | 0024| direct provision of health care services; | 0025| (c) to a licensed physician identified and | 0001| designated by the victim of domestic abuse; | 0002| (d) pursuant to an order of the | 0003| superintendent or a court of competent jurisdiction, or as | 0004| otherwise required by law; | 0005| (e) when necessary for a valid business | 0006| purpose to transfer information that includes confidential abuse | 0007| information that cannot reasonably be segregated without undue | 0008| hardship, provided the recipient has executed a written agreement | 0009| to be bound by the provisions of the Domestic Abuse Insurance | 0010| Protection Act in all respects and to be subject to enforcement of | 0011| that act in the courts of this state, and the information is | 0012| disclosed or transferred only: 1) to a reinsurer that seeks to | 0013| indemnify or indemnifies all or part of a policy covering a victim | 0014| of domestic abuse and that cannot underwrite or satisfy its | 0015| obligations under the reinsurance agreement without the | 0016| information; 2) to a party to a proposed or consummated sale, | 0017| transfer, merger or consolidation of all or part of the business | 0018| of the insurer; 3) to medical or claims personnel contracting with | 0019| the insurer, its parent or affiliated companies that have service | 0020| agreements with the insurer, but only when necessary to process an | 0021| application, perform the insurer's duties under the policy or | 0022| protect the safety or privacy of a victim of domestic abuse; or 4) | 0023| with respect to address and telephone number, to entities with | 0024| which the insurer transacts business when the business cannot be | 0025| transacted without the address or telephone number; | 0001| (f) to an attorney who needs the | 0002| information to represent the insurer effectively, provided the | 0003| insurer notifies the attorney of its obligations under the | 0004| Domestic Abuse Insurance Protection Act and requires that the | 0005| attorney exercise due diligence to protect confidential abuse | 0006| information consistent with the attorney's obligation to represent | 0007| the insurer; | 0008| (g) to the policy owner or assignee, in the | 0009| course of delivery of the policy, if the policy contains | 0010| information about abuse status; or | 0011| (h) to any other entities deemed | 0012| appropriate by the superintendent; or | 0013| (4) requesting information about an applicant's | 0014| or insured's abuse status, or making use of this information, | 0015| however obtained, except: | 0016| (a) for the limited purpose of complying | 0017| with legal obligations; | 0018| (b) when verifying a person's claim to be a | 0019| victim of domestic abuse or to be suffering from an abuse-related | 0020| medical condition; or | 0021| (c) when cooperating with a victim of | 0022| domestic abuse in seeking protection from abuse or facilitating | 0023| the treatment of an abuse-related medical condition. | 0024| B. An insurer may deny a claim when the damage or loss | 0025| is the result of intentional conduct by a named insured who | 0001| commits an act of domestic abuse, except that the insurer shall | 0002| make a payment on such a claim to an innocent insured victim of | 0003| domestic abuse to the extent of that insured's interest in the | 0004| property and within the limits of coverage where the damage was | 0005| proximately related to and in furtherance of domestic abuse. An | 0006| insurer paying such a claim for property damage shall be | 0007| subrogated to the rights of the innocent insured claimant to | 0008| recover for any damages paid by the insurance. | 0009| C. The provisions of this section apply to and protect | 0010| the following applicants for insurance or insured persons, | 0011| excluding a person who commits an act of domestic abuse, from an | 0012| unfair discriminatory act or practice on the basis of any person's | 0013| abuse status: | 0014| (1) a victim of domestic abuse; | 0015| (2) a person that provides shelter, counseling | 0016| or protection to victims of domestic abuse; | 0017| (3) a person who employs or is employed by a | 0018| victim of domestic abuse; | 0019| (4) a person with whom an applicant or insured | 0020| is known to have a direct, close personal, family or abuse-related | 0021| counseling relationship; | 0022| (5) a beneficiary of an insurance contract; or | 0023| (6) a participant in an insurance plan. | 0024| D. Nothing in the Domestic Abuse Insurance Protection | 0025| Act prohibits a life insurer from declining to issue a life | 0001| insurance policy if the applicant or prospective owner of the | 0002| policy is or would be designated as a beneficiary of the policy | 0003| and if: | 0004| (1) the applicant or prospective owner of the | 0005| policy lacks an insurable interest in the insured; | 0006| (2) the applicant or prospective owner of the | 0007| policy is known, on the basis of medical, police or court records, | 0008| to have committed an act of domestic abuse against the proposed | 0009| insured; or | 0010| (3) the insured or prospective insured is a | 0011| victim of domestic abuse, and that person, or a person who has | 0012| assumed the care of that person if a minor or incapacitated, has | 0013| objected to the issuance of the policy on the ground that the | 0014| policy would be issued to or for the direct or indirect benefit of | 0015| the abuser. | 0016| E. A life insurer shall not be civilly or criminally | 0017| liable for the death of or injury to an insured resulting from an | 0018| action taken in a good faith effort to comply with the | 0019| requirements of the Domestic Abuse Insurance Protection Act. The | 0020| provisions of this section do not, however, prevent an action to | 0021| investigate or enforce a violation of that act or to assert any | 0022| other claims authorized by law. | 0023| F. Nothing in the Domestic Abuse Insurance Protection | 0024| Act prohibits an insurer from asking about a medical condition, | 0025| claims history or other underwriting information or from using | 0001| that information to underwrite or to carry out its duties under | 0002| the policy, even if the information is related to a condition or | 0003| event that the insurer knows or has reason to know is abuse- | 0004| related; provided, however, that an insurer shall not request or | 0005| use information in order to determine whether a condition or event | 0006| was the result of domestic abuse. | 0007| G. An insurer shall not be liable for a violation of | 0008| the Domestic Abuse Insurance Protection Act by a person who is a | 0009| contractor with the insurer unless the insurer directed the act or | 0010| omission that constitutes the violation." | 0011| Section 5. A new section of the New Mexico Insurance Code | 0012| is enacted to read: | 0013| "[NEW MATERIAL] JUSTIFICATION OF ADVERSE INSURANCE | 0014| UNDERWRITING DECISIONS.--An insurer that takes an underwriting | 0015| action that adversely affects a victim of domestic abuse on the | 0016| basis of a medical condition, claims history or other underwriting | 0017| information that the insurer knows is abuse-related shall explain | 0018| the reason for its action to the applicant or insured in writing | 0019| and shall be able to demonstrate that its action and any | 0020| applicable plan provision: | 0021| A. does not treat abuse status as a medical condition | 0022| or underwriting criterion; | 0023| B. is otherwise permissible by law and applies in the | 0024| same manner and to the same extent to all applicants and insureds | 0025| with a similar condition or claims history without regard to | 0001| whether the condition, history or claim is abuse-related; and | 0002| C. is based on a determination, made in conformance | 0003| with sound actuarial principles and supported by reasonable | 0004| statistical evidence, that there is a correlation between the | 0005| medical condition, claims history or other underwriting | 0006| information and a material increase in insurance risk." | 0007| Section 6. A new section of the New Mexico Insurance Code | 0008| is enacted to read: | 0009| "[NEW MATERIAL] INSURANCE COMPANY PROCEDURES TO PROTECT THE | 0010| SAFETY AND PRIVACY OF VICTIMS OF DOMESTIC ABUSE.--The | 0011| superintendent, in consultation with public safety officials who | 0012| specialize in domestic abuse matters or with a recognized domestic | 0013| abuse advocacy group, shall adopt regulations that specify | 0014| procedures to be followed by an insurer's employees, contractors, | 0015| agents and brokers for the purpose of protecting the safety and | 0016| privacy of victims of domestic abuse involved in an insurance | 0017| action, including claims investigation and subrogation." | 0018| Section 7. A new section of the New Mexico Insurance Code | 0019| is enacted to read: | 0020| "[NEW MATERIAL] RULES AND REGULATIONS.--The superintendent | 0021| may adopt, in accordance with Section 59A-2-9 NMSA 1978, rules and | 0022| regulations necessary to administer provisions of the Domestic | 0023| Abuse Insurance Protection Act." | 0024| Section 8. A new section of the New Mexico Insurance Code | 0025| is enacted to read: | 0001| "[NEW MATERIAL] ENFORCEMENT BY SUPERINTENDENT--ORDER FOR | 0002| PRELIMINARY INJUNCTIVE RELIEF.-- | 0003| A. The superintendent shall enforce provisions of the | 0004| Domestic Abuse Insurance Protection Act pursuant to the provisions | 0005| of Section 59A-2-11 NMSA 1978. | 0006| B. A person damaged or likely to be damaged by an | 0007| unfair discriminatory act or practice in violation of the Domestic | 0008| Abuse Insurance Protection Act may be granted an order for | 0009| preliminary injunctive relief by the superintendent on terms that | 0010| he considers to be just and reasonable. This authority is in | 0011| addition to any other authority granted the superintendent under | 0012| the Insurance Code." | 0013| Section 9. A new section of the New Mexico Insurance Code | 0014| is enacted to read: | 0015| "[NEW MATERIAL] LAWFUL POLICY TERMS AND CONDITIONS | 0016| PRESERVED.--Nothing in the Domestic Abuse Insurance Protection Act | 0017| shall be construed to alter, modify or prohibit the application of | 0018| any policy provision that excludes coverage for intentional or | 0019| criminal acts or any other policy conditions, exclusions or | 0020| limitations that are clearly stated in the policy and that are not | 0021| in violation of any provisions of the Domestic Abuse Insurance | 0022| Protection Act." | 0023| Section 10. A new section of the New Mexico Insurance Code | 0024| is enacted to read: | 0025| "[NEW MATERIAL] APPLICABILITY.--The provisions of the | 0001| Domestic Abuse Insurance Protection Act apply to all insurers as | 0002| defined in that act, including the following: | 0003| A. fraternal benefit societies pursuant to Chapter | 0004| 59A, Article 44 NMSA 1978; | 0005| B. health maintenance organizations and their | 0006| promoters, sponsors, directors, officers, employees, agents, | 0007| solicitors and other representatives pursuant to Chapter 59A, | 0008| Article 46 NMSA 1978; | 0009| C. health care plans and their promoters, sponsors, | 0010| directors, officers, employees, agents, solicitors and other | 0011| representatives pursuant to Chapter 59A, Article 47 NMSA 1978; | 0012| D. prepaid dental plan organizations and their | 0013| sponsors, directors, officers, personnel and representatives and | 0014| member contracts pursuant to Chapter 59A, Article 48 NMSA 1978; | 0015| and | 0016| E. motor clubs and their sponsors, directors, | 0017| officers, representatives, personnel and operations pursuant to | 0018| Chapter 59A, Article 50 NMSA 1978." | 0019| Section 11. A new section of the New Mexico Insurance Code | 0020| is enacted to read: | 0021| "[NEW MATERIAL] CIVIL ADMINISTRATIVE PENALTY.-- | 0022| A. In lieu of the civil administrative penalty | 0023| provided for in Subsection B of Section 59A-1-18 NMSA 1978, a | 0024| separate civil administrative penalty may be assessed for | 0025| violations of the Domestic Abuse Insurance Protection Act. That | 0001| administrative penalty shall be not over ten thousand dollars | 0002| ($10,000) for each violation, except that if the violation is to | 0003| be found willful and intentional, the penalty may be up to twenty | 0004| thousand dollars ($20,000) for each violation. Every administra- | 0005| | 0006| tive penalty shall be imposed by written order of the | 0007| superintendent made after hearing held as provided in Chapter 59A, | 0008| Article 4 NMSA 1978. | 0009| B. A monetary penalty imposed may be in addition to | 0010| any applicable suspension, revocation or denial of a license or | 0011| certificate of authority." | 0012| Section 12. Section 59A-16-20 NMSA 1978 (being Laws 1984, | 0013| Chapter 127, Section 286, as amended) is amended to read: | 0014| "59A-16-20. UNFAIR CLAIMS PRACTICES DEFINED AND | 0015| PROHIBITED.--Any and all of the following practices with respect | 0016| to claims, by an insurer or other person, knowingly committed or | 0017| performed with such frequency as to indicate a general business | 0018| practice, are defined as unfair and deceptive practices and are | 0019| prohibited: | 0020| A. misrepresenting to insureds pertinent facts or | 0021| policy provisions relating to coverages at issue; | 0022| B. failing to acknowledge and act reasonably promptly | 0023| upon communications with respect to claims from insureds arising | 0024| under policies; | 0025| C. failing to adopt and implement reasonable standards | 0001| for the prompt investigation and processing of insureds' claims | 0002| arising under policies; | 0003| D. failing to affirm or deny coverage of claims of | 0004| insureds within a reasonable time after proof of loss requirements | 0005| under the policy have been completed and submitted by the insured; | 0006| E. not attempting in good faith to effectuate prompt, | 0007| fair and equitable settlements of an insured's claims in which | 0008| liability has become reasonably clear; | 0009| F. failing to settle all catastrophic claims within a | 0010| ninety-day period after the assignment of a catastrophic claim | 0011| number when a catastrophic loss has been declared; | 0012| G. compelling insureds to institute litigation to | 0013| recover amounts due under policy by offering substantially less | 0014| than the amounts ultimately recovered in actions brought by such | 0015| insureds when such insureds have made claims for amounts | 0016| reasonably similar to amounts ultimately recovered; | 0017| H. attempting to settle a claim by an insured for less | 0018| than the amount to which a reasonable person would have believed | 0019| he was entitled by reference to written or printed advertising | 0020| material accompanying or made part of an application; | 0021| I. attempting to settle claims on the basis of an | 0022| application [which] that was altered without notice to, or | 0023| knowledge or consent of, the insured, his representative, agent or | 0024| broker; | 0025| J. failing, after payment of a claim, to inform | 0001| insureds or beneficiaries, upon request by them, of the coverage | 0002| under which payment has been made; | 0003| K. making known to insureds or claimants a practice of | 0004| insurer of appealing from arbitration awards in favor of insureds | 0005| or claimants for the purpose of compelling them to accept | 0006| settlements or compromises less than the amount awarded in | 0007| arbitration; | 0008| L. delaying the investigation or payment of claims by | 0009| requiring an insured, claimant or the physician of either to | 0010| submit a preliminary claim report and then requiring the | 0011| subsequent submission of formal proof of loss forms, both of which | 0012| submissions contain substantially the same information; | 0013| M. failing to settle an insured's claims promptly | 0014| where liability has become apparent under one portion of the | 0015| policy coverage in order to influence settlement under other | 0016| portions of the policy coverage; [or] | 0017| N. failing to promptly provide an insured a reasonable | 0018| explanation of the basis relied on in the policy in relation to | 0019| the facts or applicable law for denial of a claim or for the offer | 0020| of a compromise settlement; or | 0021| O. violating a provision of the Domestic Abuse | 0022| Insurance Protection Act." | 0023| Section 13. EFFECTIVE DATE.--The effective date of the | 0024| provisions of this act is July 1, 1997. | 0025| - 17 - |