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AN ACT

RELATING TO INSURANCE; UPDATING CAPITAL REQUIREMENTS AND

OTHER PROVISIONS; PROVIDING PENALTIES; RECOMPILING A SECTION

OF THE NMSA 1978; AMENDING, REPEALING AND ENACTING SECTIONS

OF THE NEW MEXICO INSURANCE CODE.

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

Section 1. Section 59A-5-16 NMSA 1978 (being Laws 1984,

Chapter 127, Section 83, as amended by Laws 1987, Chapter

259, Section 4 and also by Laws 1987, Chapter 262, Section 1)

is repealed and a new Section 59A-5-16 NMSA 1978 is enacted

to read:

"59A-5-16. CAPITAL FUNDS, DEPOSITS, REQUIRED FOR

CERTIFICATE OF AUTHORITY.--

A. To qualify for certificate of authority to

transact any one kind or combination of kinds of insurance in

this state, an insurer shall possess:

(1) if a stock insurer, paid-in capital

stock and, when first so authorized, surplus all as shown in

Schedule I of this section; or

(2) if a mutual, reciprocal or Lloyds

insurer, basic capital surplus, including guaranty funds, if

any, and additional unassigned surplus when first so

authorized, as required under Schedule I of this section.

B. Except that an insurer that on January 1, 1985,

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having applied for a certificate on or before

February 15, 1984, held a valid and subsisting certificate of

authority to transact insurance in this state may, if a

domestic insurer, continue to be so authorized until December

31, 1995, so long as otherwise qualified therefor and

possessing paid-in capital stock, if a stock insurer, or

basic capital surplus, if a mutual, reciprocal or Lloyds

insurer, not less than that required of the insurer by the

laws of this state in force on January 1, 1986; and if a

foreign insurer, may so continue to be so authorized, if

otherwise qualified therefor, while possessing such capital

funds (paid-in capital stock and surplus if a stock insurer,

and surplus if a mutual or reciprocal insurer) until December

31, 1990. At the expiration of such period, as applicable,

the insurer shall meet the basic capital requirements of this

section as set forth in Schedule I of this section in order

to maintain its certificate of authority. Upon a change in

the control of either a domestic insurer or foreign insurer,

the insurer shall, within one year from effective date of

such change of control, meet the capital funds requirements

of Schedule I of this section as though a newly authorized

insurer, but this sentence shall not act to extend the

otherwise applicable time period. For the purposes of this

subsection, "control" shall have the meaning ascribed in

Section 59A-37-2 NMSA 1978.

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C. The capital funds required for authority to

transact insurance in this state shall be based upon all the

kinds of insurance the insurer transacts, wherever transacted

or to be transacted.

D. This section shall not apply as to domestic

Lloyds plan insurers as identified in Chapter 59A, Article 38

NMSA 1978 except as stated in that article.

E. The capital requirements of this section are

set forth in the following schedule:

Schedule I

NEW MEXICO

Minimum Capital, Surplus and Deposit Requirements

Property/Casualty Insurer

Premium Volume:

Under $5 $5 to $10 $10 to $25 Over $25

Million

Million Million Million

Number of Kinds of Insurance

Basic Capital 500,000 600,000 700,000 800,000 900,000 1,000,000

Additional

Surplus

500,000 600,000 700,000 same as same as same as

Under Under Under

$5 Million $5 Million $5 Million

General Deposit 100,000 200,000 300,000 400,000 400,000 400,000

Special Deposit 100,000 200,000 300,000 same as same as same as

Under

Under Under

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$5 Million $5 Million $5 Million

Life/Health Insurer

Premium Volume:

Under $5 $5 to $10 $10 to $25 Over $25

Million

Million Million Million

Basic Capital

600,000

700,000 800,000 900,000

Additional Surplus

400,000

400,000 400,000 400,000

General Deposit

100,000

100,000 100,000 100,000

Special Deposit

100,000

100,000 100,000 100,000

Notes: Premium Volume means the insurer's worldwide direct premiums earned

(if Property/Casualty) or received (if Life/Health) during the

previous calendar year.

Kinds of insurance pertains to the general kinds of insurance that

property/casualty insurers are authorized to transact. The following

groups or single kinds of insurance shall be counted as one kind of

insurance when calculating the amount of required Basic Capital,

Additional Surplus, General Deposit and Special Deposit:

Casualty and/or Surety;

Property and/or Marine & Transportation;

Vehicle; and

Title.

When determining Basic Capital and Additional Surplus amounts, the

kinds of Insurance shall be based on the insurer's actual or

requested transaction authority Worldwide.

When determining General Deposit and Special Deposit amounts, the

kinds of Insurance shall be based on the insurer's actual or requested

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transaction authority in New Mexico.

"Basic Capital" means paid-in capital stock (if a stock insurer) or

basic capital surplus (if a mutual, reciprocal or Lloyds insurer).

General Deposit or Special Deposit funds are included within, and are

not additional to, required Basic Capital and Additional Surplus.

General Deposit amounts shown above are not applicable to alien

insurers."

Section 2. Section 59A-5-29 NMSA 1978 (being Laws 1984,

Chapter 127, Section 96, as amended) is amended to read:

"59A-5-29. ANNUAL STATEMENT.--

A. Each authorized insurer shall annually on or

before March 1, or within any reasonable extension of time

that the superintendent for good cause may have granted on or

before such date, file with the superintendent and with the

national association of insurance commissioners a full and

true statement of its financial condition and of its

transactions and affairs as of the December 31 next

preceding. The statement shall be prepared in the form of

the annual statement blank prescribed by the national

association of insurance commissioners for use in the United

States for the type of insurer and kinds of insurance to be

reported upon, in accordance with the annual statement

instructions and the accounting practices and procedures

manual published by the national association of insurance

commissioners, or such other form and instructions as the

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superintendent may prescribe, and supplemented by additional

information reasonably required by the superintendent; the

superintendent may require that the annual statement data be

filed in electronically readable format or in lieu of filing,

may accept a statement or supplemental information filed in

electronic format with the national association of insurance

commissioners that is readily available to the superintendent

and that the superintendent can reproduce or otherwise make

available to the public for a period of at least five years

from the date that the filing is due. The statement shall be

verified by the oath of the insurer's president or vice

president and secretary or actuary, as applicable; or, in

absence of the foregoing, by two other principal officers; or

if a reciprocal insurer or Lloyds insurer, the oath of the

attorney-in-fact or its like officers if a corporation.

B. The statement of an alien insurer shall be

verified by its United States manager or other officer duly

authorized and shall relate only to the insurer's

transactions and affairs in the United States unless the

superintendent requires otherwise. If the superintendent

requires a statement as to the alien insurer's affairs

throughout the world, the insurer shall file such statement

with the superintendent as soon as reasonably possible.

C. If the insurer's statement is in any language

other than English or in monetary amounts other than United

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States dollars, the statement shall be accompanied by an

English-language translation and monetary amounts shall be

shown in United States dollars with statement of the basis

upon and date as of which the monetary conversion was made.

D. The superintendent may suspend or revoke the

certificate of authority of any insurer failing to file its

annual statement when due.

E. At time of filing, the insurer shall pay the

fee for filing its annual statement with the superintendent

as prescribed by Section 59A-6-1 NMSA 1978, and pay to the

national association of insurance commissioners the fee

established for filing, review or processing of the

information, unless such fee has been disapproved by the

superintendent.

F. In the absence of actual malice, members of

national association of insurance commissioners, their duly

authorized committees, subcommittees and task forces, their

delegates, employees and all others charged by the

superintendent or the national association of insurance

commissioners with the responsibility of collecting,

reviewing, analyzing and disseminating the information

developed from the filing of the annual statement blanks

shall be acting as agents of the superintendent under the

authority of the Insurance Code and shall not be subject to

civil liability for libel, slander or any other cause of

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action by virtue of their collection, review and analysis or

dissemination of the data and information collected from the

filings required hereunder.

G. As to publication of nonstatutory financial

statements, refer to Section 59A-16-9 NMSA 1978."

Section 3. Section 59A-6-2 NMSA 1978 (being Laws 1984,

Chapter 127, Section 102, as amended) is amended to read:

"59A-6-2. PREMIUM TAX--HEALTH INSURANCE PREMIUM

SURTAX.--

A. The premium tax provided for in this section

shall apply as to the following taxpayers:

(1) each insurer authorized to transact

insurance in New Mexico;

(2) each insurer formerly authorized to

transact insurance in New Mexico and receiving premiums on

policies remaining in force in New Mexico, except that this

provision shall not apply as to an insurer that withdrew from

New Mexico prior to March 26, 1955;

(3) each plan operating under provisions of

Chapter 59A, Articles 46 through 49 NMSA 1978;

(4) each property bondsman, as that person

is defined in Section 59A-51-2 NMSA 1978, as to any

consideration received as security or surety for a bail bond

in connection with a judicial proceeding, which consideration

shall be considered "gross premiums" for the purposes of this

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section; and

(5) each unauthorized insurer that has

assumed a contract or policy of insurance directly or

indirectly from an authorized or formerly authorized insurer

and is receiving premiums on such policies remaining in force

in New Mexico, except that this provision shall not apply if

a ceding insurer continues to pay the tax provided in this

section as to such policy or contract.

B. Each such taxpayer shall pay in accordance

with this subsection a premium tax of three and

three-thousandths percent of the gross premiums and

membership and policy fees received or written by it, as

reported in Schedule T and supporting schedules of its annual

financial statement on insurance or contracts covering risks

within this state during the preceding calendar year, less

all return premiums, including dividends paid or credited to

policyholders or contract holders and premiums received for

reinsurance on New Mexico risks.

C. In addition to the premium tax imposed

pursuant to Subsection B of this section, each taxpayer

described in Subsection A of this section that transacts

health insurance in New Mexico or is a plan described in

Chapter 59A, Article 46 or 47 NMSA 1978 shall pay a health

insurance premium surtax of one percent of the gross health

insurance premiums and membership and policy fees received by

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it on hospital and medical expense incurred insurance or

contracts; nonprofit health care service plan contracts,

excluding dental or vision only contracts; and health

maintenance organization subscriber contracts covering health

risks within this state during the preceding calendar year,

less all return health insurance premiums, including

dividends paid or credited to policyholders or contract

holders and health insurance premiums received for

reinsurance on New Mexico risks. Except as provided in this

section, all references in the Insurance Code to the premium

tax shall include both the premium tax and the health

insurance premium surtax.

D. For each calendar quarter, an estimated

payment of the premium tax and the health insurance premium

surtax shall be made on April 15, July 15, October 15 and the

following January 15. The estimated payments shall be equal

to at least one-fourth of either the payment made during the

previous calendar year or eighty percent of the actual

payment due for the current calendar year, whichever is

greater. The final adjustment for payments due for the prior

year shall be made with the return, which shall be filed on

April 15 of each year, at which time all taxes for that year

are due. Dividends paid or credited to policyholders or

contract holders and refunds, savings, savings coupons and

similar returns or credits applied or credited to payment of

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premiums for existing, new or additional insurance shall, in

the amount so used, constitute premiums subject to tax under

this section for the year in which so applied or credited.

E. Exempted from the taxes imposed by this

section are:

(1) premiums attributable to insurance or

contracts purchased by the state or a political subdivision

for the state's or political subdivision's active or retired

employees; and

(2) payments received by a health

maintenance organization from the federal secretary of health

and human services pursuant to a contract issued under the

provisions of 42 U.S.C. Section 1395 mm(g)."

Section 4. Section 59A-6-5 NMSA 1978 (being Laws 1984,

Chapter 127, Section 105, as amended) is amended to read:

"59A-6-5. DISTRIBUTION OF DIVISION COLLECTIONS.--

A. All money received by the division for fees,

licenses, penalties and taxes shall be paid daily by the

superintendent to the state treasurer and credited to the

"insurance department suspense fund" except as provided by:

(1) the Law Enforcement Protection Fund Act;

(2) Section 59A-6-1.1 NMSA 1978; and

(3) the Voter Action Act.

B. The superintendent may authorize refund of

money erroneously paid as fees, licenses, penalties or taxes

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from the insurance department suspense fund under request for

refund made within three years after the erroneous payment.

In the case of premium taxes erroneously paid or overpaid in

accordance with law, refund may also be requested as a credit

against premium taxes due in any annual or quarterly premium

tax return filed within three years of the erroneous or

excess payment.

C. The "insurance operations fund" is created in

the state treasury. The fund shall consist of the

distributions made to it pursuant to Subsection D of this

section. The legislature shall annually appropriate from the

fund to the division those amounts necessary for the division

to carry out its responsibilities pursuant to the Insurance

Code and other laws. Any balance in the fund at the end of a

fiscal year greater than one-half of that fiscal year's

appropriation shall revert to the general fund.

D. At the end of every month, after applicable

refunds are made pursuant to Subsection B of this section,

the treasurer shall make the following transfers from the

balance remaining in the insurance department suspense fund:

(1) to the "fire protection fund", that part

of the balance derived from property and vehicle insurance

business;

(2) to the insurance operations fund, that

part of the balance derived from the fees imposed pursuant to

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Subsections A and E of Section 59A-6-1 NMSA 1978 other than

fees derived from property and vehicle insurance business;

and

(3) to the general fund, the balance

remaining in the insurance department suspense fund derived

from all other kinds of insurance business."

Section 5. A new section of the New Mexico Insurance

Code is enacted to read:

"DISHONORED CHECKS AND OTHER FORMS OF PAYMENT--

PENALTY.--When a check or an electronic payment transaction

for payment of fees is dishonored or reversed by the payer's

financial institution, the payer shall pay to the insurance

division a civil penalty in the amount of twenty-five dollars

($25.00). Neither the division nor the fiscal agent of New

Mexico is obligated to resubmit the transaction or check for

payment. The superintendent shall treat the transaction as

though payment has not been made and cancel, suspend, rescind

or revoke the transaction for failure to make payment. Any

other penalty, reinstatement fee or other cost associated

with failure to make the payment shall be in addition to the

penalty set forth in this section. In this section,

"electronic payment transaction" means credit card payments,

electronic fund transfers, automated clearinghouse

transactions and other similar forms of payment."

Section 6. Section 59A-12-6 NMSA 1978 (being Laws 1984,

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Chapter 127, Section 207, as amended) is amended to read:

"59A-12-6. LICENSE REQUIRED--PENALTY.--

A. No person shall in this state be, act as or

make any representation as being, as to subjects of insurance

resident, located or to be performed in this state or

elsewhere, an agent or solicitor unless then licensed as such

under the Insurance Code.

B. No authorized insurer shall accept insurance

of a subject located, resident or to be performed in this

state through a person acting as insurance agent in this

state if the insurer knows, or reasonably should have known,

that such person was not then licensed as an agent as to the

insurance or not appointed as its agent by the insurer.

C. No license as agent or broker shall be issued

to an entity other than an individual, firm (partnership) or

corporation.

D. No agent or solicitor shall solicit or take an

application for, or place for others, any kind of insurance

as to which not then so licensed.

E. No agent shall place any insurance with an

insurer as to which not then licensed or appointed as agent

under the Insurance Code, except as permitted by Section

59A-11-10 NMSA 1978.

F. A license as agent or solicitor, or

appointment as agent of a particular insurer, shall not be in

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effect until the license has actually been delivered to the

agent or solicitor or to the solicitor's employer agent or

the appointment has been duly filed with and approved by the

superintendent.

G. In addition to any applicable denial,

suspension or revocation of license, refusal to continue

license, or administrative fine, violation of this section

shall be a misdemeanor punishable by a fine of from one

hundred dollars ($100) to five hundred dollars ($500) and by

forfeiture to the state of New Mexico of an amount equal to

all compensation for services as agent or solicitor received

or to be received by the violator by reason of the prohibited

transactions."

Section 7. Section 59A-12-18 NMSA 1978 (being Laws

1984, Chapter 127, Section 219, as amended by Laws 2002,

Chapter 24, Section 1 and by Laws 2002, Chapter 87, Section

1) is amended to read:

"59A-12-18. LIMITED LICENSE.--

A. The superintendent may issue a limited agent's

license to:

(1) individual applicants qualified pursuant

to Chapter 59A, Article 12 NMSA 1978 and employed as

transportation ticket sellers by public carriers, who in the

course of such employment solicit or sell insurance

incidental to transportation of persons or storage or

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transportation of baggage, provided that the license is

limited to that insurance; or

(2) individual applicants employed full time

by a vendor of merchandise or other property or by a

financial institution making consumer loans, on terms with

respect to which credit life insurance or health insurance,

under individual policies is customarily required of or

offered to the purchaser or borrower, covering only that

credit life and health insurance.

B. The superintendent may issue a limited agent's

license to applicants who are retail vendors or lessors of

communication equipment or services. The license shall

authorize the licensee, in connection with the lease, retail

sale or provision of communication equipment or communication

services for communication equipment, to sell insurance

covering the loss, theft, mechanical failure or malfunction

of or damage to the communication equipment. The licensee

shall provide for the training of its employees who are

authorized to sell that insurance. The conduct of the

licensee's business under the limited license by its

employees shall be attributed to the licensee. As used in

this subsection, "communication equipment" means handsets,

pagers, personal digital assistants, portable computers,

automatic answering devices, batteries and other devices or

their accessories used to originate or receive communication

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signals or service, and includes services related to the use

of such devices such as access to a network.

C. No holder of a limited license issued pursuant

to this section shall concurrently be otherwise licensed

under the Insurance Code."

Section 8. Section 59A-13-2 NMSA 1978 (being Laws 1984,

Chapter 127, Section 230, as amended) is amended to read:

"59A-13-2. DEFINITIONS.--

A. For the purposes of the Insurance Code:

(1) "adjuster" is a person that:

(a) investigates, negotiates, settles

or adjusts a loss or claim arising under an insurance

contract on behalf of an insurer, insured or self-insurer,

for a fee, commission or other compensation; however, an

adjuster acting on behalf of an insured shall not

investigate, negotiate, settle or adjust a claim involving

personal injury to the insured; and

(b) advises the insured of the

insured's rights to settlement and the insured's rights to

settle, arbitrate and litigate the dispute;

(2) "staff adjuster" is an adjuster

individual who is a salaried employee of an insurer or

affiliates of the employer insurer, representing and

adjusting claims solely under policies of the employer

insurer; and

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(3) "independent adjuster" is an adjuster

who is not a staff adjuster and includes a representative and

an employee of an independent adjuster.

B. Except as otherwise provided, "adjuster" does

not include:

(1) an attorney-at-law who adjusts insurance

losses or claims from time to time incidental to practice of

law and who does not advertise or represent as an adjuster;

(2) a licensed agent or general agent of an

authorized insurer or an employee of an agent or general

agent who adjusts claims or losses under specific authority

from the insurer and solely under policies issued by the

insurer;

(3) an agent or employee of a life or health

insurer who adjusts claims or losses under the insurer's

policies or contracts to administer policies or benefits of

that type; or

(4) a salaried or part-time claims agent or

investigator employed by a self-insured person."

Section 9. Section 59A-13-8 NMSA 1978 (being Laws 1984,

Chapter 127, Section 236) is amended to read:

"59A-13-8. POWERS CONFERRED BY ADJUSTER LICENSE.--An

independent adjuster shall have the powers granted by its

principal to investigate, report upon, adjust and settle

claims on behalf of an insurer or self insurer and have

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additional powers as to claims and losses as may be conferred

by the principal. A staff adjuster shall have only such

powers with respect to claims and losses as granted by the

adjuster's employer or affiliates of the adjuster's employer.

A temporary adjuster shall, as to claims and losses, have the

powers of the employer, subject to extension or limitation by

contract."

Section 10. Section 59A-16-20.1 NMSA 1978 (being Laws

1993, Chapter 350, Section 1) is amended to read:

"59A-16-20.1. HOMEOWNER'S CASUALTY INSURANCE--PREMIUM

RATE AND POLICY--PROTECTION AFTER NATURAL DISASTER.--

A. A homeowner's casualty insurance policy shall

not be canceled or denied renewal because of a homeowner's

claim made as a result of damages caused by a natural

disaster to the homeowner's private residence, provided that

the homeowner's policy expressly provides for such coverage.

B. The provisions of this section apply to all

insurance carriers authorized under the Insurance Code to

transact homeowner's casualty insurance policies. For the

purposes of this section, "natural disaster" means any

hurricane, tornado, storm, flood, high water, wind-driven

water, earthquake, landslide, mudslide, snowstorm, drought,

fire, explosion or other catastrophe that results in

substantial damage to property, hardship, suffering or loss

of life."

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Section 11. Section 59A-34-37 NMSA 1978 (being Laws

1984, Chapter 127, Section 583) is amended to read:

"59A-34-37. PRESERVATION OF OLD CHARTER IN MERGER,

CONSOLIDATION.--

A. In any merger or consolidation of a foreign

stock or mutual insurer into or with a domestic insurer under

Chapter 59A, Article 34 NMSA 1978, the continuing New Mexico

corporation shall for all purposes be deemed to be

continuation of the corporate existence of the foreign

corporation, with New Mexico as the adoptive state of

domicile and with date of corporate origin the same as the

original date of incorporation of the foreign insurer in its

original domiciliary state or country, subject to the

following conditions:

(1) the plan and agreement of merger or

consolidation shall provide for such continuation of

corporate existence, with designation of New Mexico as the

state of domicile of the foreign corporation by adoption, and

shall specify the original date of incorporation of the

foreign corporation in its original domiciliary state or

country as being the date of incorporation of the New Mexico

corporation pursuant to this section;

(2) the articles of corporation of the New

Mexico corporation shall provide, or be amended to provide,

that the corporation is a continuance of the corporate

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existence, through adoption of New Mexico as the corporate

domicile, of the foreign corporation, and shall specify the

original date of incorporation of the foreign corporation in

its original domiciliary state or country as being the date

of incorporation of the New Mexico corporation pursuant to

this section; and

(3) the continuing New Mexico corporation

shall as of merger or consolidation effective date have

paid-in capital stock and additional surplus in amount not

less than as required of a newly-authorized foreign stock

insurer under Section 59A-5-16 NMSA 1978 to transact the same

kinds of insurance, and shall have all the rights and

obligations of, and be given recognition in all respects as,

a corporation formed under the laws of this state as of the

date of incorporation of the foreign corporation in its

original domiciliary state or country. This provision shall

not be deemed to impose upon the continuing New Mexico

corporation any liability or obligation as to filings, fees,

taxes or otherwise that might have accrued prior to effective

date of the merger or consolidation.

B. This section shall not be deemed in any manner

to preserve, after effective date of merger or consolidation,

the corporate existence of the foreign corporation as a

corporation of its original domiciliary state or country."

Section 12. Section 59A-48-19 NMSA 1978 (being Laws

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1984, Chapter 127, Section 898, as amended) is amended to

read:

"59A-48-19. OTHER PROVISIONS APPLICABLE.--In addition

to those referred to in Chapter 59A, Article 48 NMSA 1978,

the following articles and provisions of the Insurance Code

shall also apply, to the extent reasonably applicable and

subject to the provisions of that article, as to prepaid

dental plan organizations, their sponsors, directors,

officers, personnel and representatives and member contracts.

For the purposes of this provision, such organizations may be

referred to as "insurers" and such contracts as "policies":

A. Chapter 59A, Article 1 NMSA 1978;

B. Chapter 59A, Article 2 NMSA 1978;

C. Chapter 59A, Article 4 NMSA 1978;

D. Subsection C of Section 59A-5-22 NMSA 1978;

E. Section 59A-5-33 NMSA 1978;

F. Sections 59A-6-1, 59A-6-3, 59A-6-4 and 59A-6-6

NMSA 1978;

G. Section 59A-7-11 NMSA 1978;

H. Chapter 59A, Article 8 NMSA 1978;

I. Chapter 59A, Article 10 NMSA 1978;

J. Section 59A-12-22 NMSA 1978;

K. the Insurance Fraud Act;

L. Chapter 59A, Article 18 NMSA 1978;

M. the Policy Language Simplification Law;

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N. Section 59A-34-10 NMSA 1978, as to domestic

prepaid dental plans; and

O. The Insurance Holding Company Law."

Section 13. Section 59A-58-6 NMSA 1978 (being Laws

2001, Chapter 206, Section 6) is amended to read:

"59A-58-6. SECURITY REQUIRED FOR REGISTRATION OF

PROVIDER.--

A. To ensure the faithful performance of a

provider's obligations to the provider's contract holders, a

provider shall maintain a deposit with the superintendent as

provided in this section.

B. A provider of a service contract shall deposit

fifty thousand dollars ($50,000) unless the contract covers

the following, in which case the provider shall deposit one

hundred thousand dollars ($100,000):

(1) a motor vehicle; and

(2) mechanical, plumbing and electrical

systems and appliances at a residential dwelling when the

service contract was sold in conjunction with the sale of the

residential dwelling.

C. Deposits required pursuant to Subsection B of

this section shall be:

(1) a surety bond issued by a surety company

authorized to do business in New Mexico on a form acceptable

to the superintendent;

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(2) securities of the type eligible for

deposit by an insurance company; or

(3) a clean and irrevocable letter of credit

issued by a financial institution acceptable to the

superintendent.

D. Additional financial security may be required

of any provider when it is determined by the superintendent

that an additional deposit is necessary for the protection of

the public.

E. The provisions of this section shall not apply

to major manufacturing companies' service contracts."

Section 14. TEMPORARY PROVISION--RECOMPILATION.--The

compiler shall recompile Section 8-8-9.2 NMSA 1978 (being

Laws 2003, Chapter 235, Section 3) as part of the New Mexico

Insurance Code.