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F I S C A L I M P A C T R E P O R T

SPONSOR HBPAC

DATE TYPED 2/18/05

HB 359/HCPACS

SHORT TITLE Insurance Policies in English & Spanish

SB

ANALYST Wilson

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Workers’ Compensation Administration (WCA)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of HCPAC S

The House Consumer and Public Affairs Committee Substitute for House Bill 359 clarifies the

bill.

Synopsis of Original Bill

House Bill 359 requires that insurance contracts which are issued or renewed after January 1,

2006 be provided in both the English and Spanish languages if requested by the insured. The

Spanish provisions are for information only and do not govern the rights of the parties.

Significant Issues

The AGO believes the language of the bill is confusing in that the exceptions to the bilingual re-

quirement appear to exclude the policy declaration or equivalent pages attached to insurance

contracts from the requirement.

The PRC provided the following:

House Bill 359/HCPACS-- Page 2

New Mexico is culturally unique and unlike any other state in the union. Approximately

40% of New Mexico’s population is Hispanic, which makes the utilization of the term

“minority” a misnomer.

As such, the Insurance Division (ID) fully supports any effort to assist this large popula-

tion in overcoming economic and language barriers. The availability of declaration pages

in certain property & casualty insurance contracts will assist Hispanics in understanding

the terms of coverage that they pay for regularly in premiums. In addition to consumer

protection, HB 359 will also improve the financial literacy of this population.

FISCAL IMPLICATIONS

The ID does not foresee any significant fiscal implications to the ID associated with HB 359.

There may be certain costs associated with the issuance and mailing of a bulletin and a possible

rule making if necessary.

ADMINISTRATIVE IMPLICATIONS

The administrative implications associated with this bill will be minimal for the ID. The ID will

issue a Bulletin to the affected property and casualty insurance companies notifying them of the

requirements of HB 359.

The ID’s form and rate review, examination and other appropriate staff will be notified of the

new requirements, as well as insurance complaint staff in the Consumer Relations Division of

the PRC. The ID will conduct a review of existing rules to determine whether a rule amendment

is necessary. Existing staff resources should be adequate to administer and enforce HB 359.

TECHNICAL ISSUES

The AGO suggests that Section 59A-18-17D should be rewritten to clearly state that insurance

contracts, including policy declarations pages and their equivalents, should be in both in English

and Spanish if requested, assuming that is the intent of this legislation. Then, in a separate sen-

tence, list the exceptions.

DW/lg:yr