46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO MOTOR VEHICLE INSURANCE; PROVIDING THAT MOTOR VEHICLE INSURERS SHALL, AFTER DECEMBER 31, 2005, OFFER THE VEHICLE-MILE EXPOSURE UNIT AS AN ALTERNATIVE TO THE VEHICLE-YEAR EXPOSURE UNIT FOR DRIVING COVERAGES; PROVIDING FOR A VOLUNTARY PHASE-IN; PROVIDING ADDITIONAL DUTIES FOR THE SUPERINTENDENT OF INSURANCE.

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

Section 1. A new section of the New Mexico Insurance Code is enacted to read:

"[NEW MATERIAL] MOTOR VEHICLE INSURANCE--VEHICLE-MILE EXPOSURE UNIT AUTHORIZED--ADDITIONAL DUTIES FOR SUPERINTENDENT.--

A. As used in this section:

(1) "vehicle-mile exposure unit" means a unit of exposure that is one mile of coverage of the insured motor vehicle; and

(2) "vehicle-year exposure unit" means a unit of exposure that is one year of coverage of the insured motor vehicle.

B. An authorized insurer that, after December 31, 2005, delivers, issues or renews a policy of motor vehicle insurance shall offer each person who purchases motor vehicle insurance from that insurer a choice for the same class and coverage between the vehicle-mile exposure unit for coverage for losses caused by collision or other driving-related accidents and the vehicle-year exposure unit for all coverages. The insurer may require a person purchasing insurance to use the same exposure unit applied to driving coverages for all vehicles covered under the person's motor vehicle insurance policy.

C. Prior to January 1, 2006, an authorized insurer that delivers, issues or renews policies of motor vehicle insurance may phase in the implementation of the requirement of Subsection B of this section by offering the choice between the vehicle-mile exposure unit and the vehicle-year exposure unit on a county-by-county basis; provided that, for each county selected by the insurer for implementation of the vehicle-mile exposure unit, the insurer shall offer the choice of that exposure unit to each of the insurer's policyholders or applicants for motor vehicle insurance that reside in that county.

D. In approving or disapproving rates filed pursuant to the Insurance Code, the superintendent shall exempt from regulation each cents-per-vehicle-mile rate offered as an alternative to each dollars-per-vehicle-year rate that has been approved. In reporting incurred losses and earned premiums, an insurer shall separately report experience based on use of the vehicle-mile exposure unit and the vehicle-year exposure unit.

E. The superintendent shall:

(1) compile information concerning:

(a) the number of motor vehicle insurance policies using the vehicle-mile exposure unit;

(b) the geographic areas of this state in which the vehicle-mile exposure unit is used; and

(c) the cents-per-vehicle-mile premium rates compared to their matching dollars-per-vehicle-year premium rates;

(2) analyze the effect of the vehicle-mile exposure unit on:

(a) rates offered for motor vehicle insurance based on the vehicle-year exposure unit; and

(b) the number of uninsured motor vehicles; and

(3) adopt such rules as are necessary to implement and effectively administer the vehicle-mile exposure unit, including rules regarding:

(a) prepayment arrangements;

(b) renewal procedures;

(c) proof of financial responsibility;

(d) auditing of the odometer readings of vehicles for the purpose of determining whether coverage is in force;

(e) the inclusion of the vehicle-mile exposure unit in assigned risk plans developed pursuant to the Motor Vehicle Assigned Risks Law; and

(f) policy forms."