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

RELATING TO INSURANCE; PROVIDING FOR INTERCEPTION OF CERTAIN

INSURANCE PAYMENTS TO PAY DELINQUENT CHILD SUPPORT.

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] NOTIFICATION BY INSURER.--

A. Prior to making payment to a person who resides in New Mexico to settle any obligation, claim or award or to pay an annuity, an insurer providing life, property, marine and transportation, wet marine, casualty, vehicle or surety insurance, as defined in Chapter 59A, Article 7 NMSA 1978, shall first notify the child support enforcement division of the human services department. Notification shall include sufficient information to positively identify the intended recipient, the amount to be paid and the purpose of such payment.

B. An insurer required to provide notification under Subsection A of this section shall not issue payment without first receiving approval from the human services department."

Section 2. A new section of the New Mexico Insurance Code is enacted to read:

"[NEW MATERIAL] INSURERS--COURT ORDER--PAYMENT.--An insurer receiving a court order obtained pursuant to Section 40-4A-5.1 NMSA 1978 shall pay to the human services department an amount equal to the delinquency of the obligor named in the court order if the amount due the person is equal to or greater than the delinquency. If the intended payment by the insurer is less than the amount of the delinquency, the insurer shall pay the entire amount to the human services department."

Section 3. Section 40-4A-1 NMSA 1978 (being Laws 1985, Chapter 105, Section 1) is amended to read:

"40-4A-1. SHORT TITLE.--[This act] Chapter 40, Article 4A NMSA 1978 may be cited as the "Support Enforcement Act"."

Section 4. A new section of the Support Enforcement Act, Section 40-4A-5.1 NMSA 1978, is enacted to read:

"40-4A-5.1. [NEW MATERIAL] NOTICE TO DIVERT PAYMENT.--

A. When an obligor has been served notice of delinquency, as provided in Section 40-4A-4 NMSA 1978, and the department receives notice of an intended payment to the obligor by an insurer, the department shall:

(1) immediately provide notice to the insurer of an interest in the intended payment;

(2) file with the clerk of the district court an application for an order to divert the intended insurance payment to the department and serve notice upon the insurer by certified mail with proof of service filed with the clerk of the district court;

(3) provide notice to the obligor of the court order; and

(4) if the intended payment is more than the amount of an obligor's delinquency, authorize the insurer to make payment to the obligor of the balance remaining after payment to the department as required by Section 2 of this act.

B. If the person identified by the insurer in its notification to the department is not an obligor, or if the person is an obligor but is not found to be delinquent, the department shall notify the insurer to proceed with its payment of the claim, award or annuity. The department shall provide this notice and that required in Paragraph (1) of Subsection A of this section within three business days from the time of receipt of the insurer's notification."

Section 5. Section 40-4A-7 NMSA 1978 (being Laws 1985, Chapter 105, Section 7, as amended) is amended to read:

"40-4A-7. PROCEDURE TO AVOID INCOME WITHHOLDING OR PAYMENT DIVERSION.--

A. Except as provided in Section 40-4A-4.1 NMSA 1978, the obligor may contest [the] a notice to withhold income by filing a petition with the clerk of the district court within twenty days after service of the notice of delinquency. Grounds for the contest shall be limited to a dispute concerning the existence or amount of the delinquency or noncompliance with the Support Enforcement Act. The clerk of the district court shall notify the obligor and the obligee or public office, as appropriate, of the time and place of the hearing on the petition. The court shall hold the hearing pursuant to the provisions of Section 40-4A-9 NMSA 1978.

B. An obligor may contest the payment diversion authorized in Section 40-4A-5.1 NMSA 1978 under the same provisions and with the same limitations as set forth in Subsection A of this section."