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

RELATING TO MOTOR VEHICLE INSURANCE; PROVIDING THAT MOTOR VEHICLE INSURERS MAY OFFER MILE-BASED RATING PLANS IN ADDITION TO TIME-BASED RATING PLANS; 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--MILE-BASED RATING PLANS AUTHORIZED--ADDITIONAL DUTIES FOR

SUPERINTENDENT.--

A. As used in this section:

(1) "mile-based rating plan" means a rating plan for which a unit of exposure is a specific number of miles traveled by the insured motor vehicle; and

(2) "time-based rating plan" means a rating plan for which a unit of exposure is a unit of time.

B. An authorized insurer that delivers, issues or renews a policy of motor vehicle insurance may offer each person who purchases motor vehicle insurance from that insurer a choice between a mile-based rating plan and a time-based rating plan. The insurer may require a person purchasing insurance to use the same rating plan for all vehicles covered under the person's motor vehicle insurance policy.

C. In approving or disapproving rates filed pursuant to the Insurance Code, the superintendent shall disapprove rates under a mile-based rating plan if he determines that the rates are excessive in comparison to rates filed by the same insurer for similar coverage under the time-based rating plan. In reporting incurred losses and earned premiums, an insurer shall separately report experience based on use of the mile-based rating plan and the time-based rating plan.

D. The superintendent shall:

(1) compile information concerning:

(a) the number of insurers writing motor vehicle insurance based on mile-based rating plans;

(b) the geographic areas of this state in which mile-based rating plans are used; and

(c) the premium rates for mile-based rating plans compared to time-based rating plans;

(2) analyze the effect of mile-based rating plans on:

(a) rates offered for motor vehicle insurance based on time-based rating plans; and

(b) the number of uninsured motorists; and

(3) adopt such rules as are necessary to implement and effectively administer mile-based rating plans, 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 mile-based rating plans in assigned risk plans developed pursuant to the Motor Vehicle Assigned Risks Law; and

(f) policy forms."