SENATE BILL 253
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Carroll H. Leavell
AN ACT
RELATING TO INSURANCE; AMENDING SECTIONS OF THE NEW MEXICO INSURANCE CODE; PROVIDING FOR EXAMINATION OF INSURERS; PROVIDING FOR CERTAIN FEES; PROVIDING FOR PROCEDURES FOR LICENSURE OR CERTIFICATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 59A-4-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 49, as amended) is amended to read:
"59A-4-5. EXAMINATION OF INSURERS.--
A. For the purpose of determining financial condition, fulfillment of contractual obligations, methods of doing business, treatment accorded policyholders and compliance with law, the superintendent shall, as often as [he] the superintendent deems advisable, examine or investigate the affairs, transactions, accounts, records and assets of each authorized insurer and of any other person as to any matter [which] that the superintendent in [his] the superintendent's sole discretion has determined to be relevant to the financial affairs of the insurer or to the examination. Except as expressly otherwise provided, the superintendent shall so examine each domestic insurer not less frequently than every five years. In scheduling and determining the nature, scope and frequency of the examinations, the superintendent may consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, evidence of market practices, policyholder complaints and other criteria as set forth in the handbooks for financial or market conduct examiners adopted by the national association of insurance commissioners in effect when the superintendent exercises discretion under this section.
B. For like purposes, the superintendent shall examine each insurer, or proposed insurer, applying for an initial certificate of authority to transact insurance in this state. The initial examination shall be completed prior to issuance of a certificate of authority.
C. Whenever the superintendent examines the affairs of [any] a domestic insurer, [he] the superintendent may invite the representative of the insurance supervisory agency of at least one other state, if any, in which the insurer is an authorized insurer, to participate in the examination.
D. Until January 1, 1994, in lieu of making [his] the superintendent's own examination of a foreign or alien insurer, the superintendent may accept a full report of an examination of the insurer made by competent examiners as of a date not more than one year prior and participated in by at least two states in which the insurer was authorized to transact insurance. The report shall be certified by the insurance supervisory official of the state under whose jurisdiction the examination was conducted. The superintendent may, at the superintendent's discretion, so accept [such] the report of examination [so made] as of a date more than one year but not more than three years prior; and with respect to an alien insurer, the superintendent may at the superintendent's discretion so accept [such] a report of recent examination made by the insurance supervisory official of the port of entry state of the insurer into the United States without participation therein of another state.
E. After January 1, 1994, examination reports prepared by examiners employed by other state insurance departments may be accepted only if:
(1) made as of a date not more than five years prior to acceptance and the examiner in charge was employed by and under the direction of the insurance commissioners of the insurer's state of domicile or port of entry, which insurance department was at the time of the examination accredited under the financial regulation standards and accreditation program of the national association of insurance commissioners; or
(2) made as of a date not more than three years prior to acceptance and the examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who were employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
F. As far as practical, the superintendent shall conduct examination of a foreign or alien insurer in cooperation with the insurance supervisory officials of other states in which the insurer is authorized to transact business."
Section 2. Section 59A-4-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 50, as amended) is amended to read:
"59A-4-6. EXAMINERS AND SPECIALISTS.--
A. The superintendent may appoint one or more competent individuals, sufficiently knowledgeable in applicable accounting and operations, as examiners to represent the superintendent in an examination and shall fix the reasonable compensation of the examiners.
B. The superintendent may also employ and fix reasonable compensation of independently contracting accountants knowledgeable of insurance accounting principles and practices, actuaries, attorneys, appraisers and other specialists not otherwise part of the insurance department staff as the superintendent deems necessary for the examination, the cost of which shall be borne by the company [which] that is the subject of the examination. All specialists shall be under the direction and control of the superintendent.
[C. All examiners and specialists shall be subject to Sections 59A-2-5 and 59A-2-6 NMSA 1978.]"
Section 3. Section 59A-4-15 NMSA 1978 (being Laws 1984, Chapter 127, Section 59, as amended) is amended to read:
"59A-4-15. HEARINGS--IN GENERAL.--
A. The superintendent may hold a hearing, without request by others, for any purpose within the scope of the Insurance Code.
B. The superintendent shall hold a hearing:
(1) if required by any other provision of the Insurance Code; or
(2) upon written request for a hearing by a person aggrieved by any act, threatened act or failure of the superintendent to act, or by any report, rule, regulation or order of the superintendent, other than an order for the holding of a hearing or order on a hearing or pursuant to such an order on a hearing of which [such] the person had notice.
C. The request for a hearing shall briefly state the respects in which the applicant is so aggrieved, the relief to be sought and the grounds to be relied upon as basis for relief. The request shall be received by the superintendent no later than thirty days from the date of the act, threatened act, failure of the superintendent to act, report, rule, regulation or order of the superintendent.
D. If the superintendent finds that the request is made in good faith, that the applicant would be so aggrieved if the stated grounds are established and that such grounds otherwise justify the hearing, the superintendent shall commence the hearing within ninety days after filing of the request, unless postponed by mutual consent.
E. Pending the hearing and decision thereon, the superintendent may suspend or postpone the effective date of the action as to which the hearing is requested. If upon request the superintendent refuses to grant such suspension or postponement, the person requesting the hearing may apply to the district court of Santa Fe county for a stay of the superintendent's action or proposed action pending the hearing and the superintendent's order thereon.
F. Except as otherwise expressly provided, this section does not apply to hearings relative to matters arising under Chapter 59A, Article 17 NMSA 1978."
Section 4. Section 59A-6-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 101, as amended) is amended to read:
"59A-6-1. FEE SCHEDULE.--The superintendent shall collect the following fees:
A. insurer's certificate of authority -
(1) filing application for certificate of authority, and issuance of certificate of authority, if issued, including filing of all charter documents, financial statements, service of process, power of attorney, examination reports and other documents included with and part of the application. . . . . . . . . . . . . . . . . . . . . .$1,000.00
(2) annual continuation of certificate of authority, per kind of insurance, each year
continued. . . . . . . . . . . . . . . . . . . . . . . . 200.00
(3) reinstatement of certificate of authority (Section 59A-5-23 NMSA 1978). . . . . . . . . . . . . . .150.00
(4) amendment to certificate of
authority. . . . . . . . . . . . . . . . . . . . . . . . 200.00
B. charter documents - filing amendment to any charter document (as defined in Section 59A-5-3
NMSA 1978). . . . . . . . . . . . . . . . . . . . . . . . 10.00
C. annual statement of insurer,
filing. . . . . . . . . . . . . . . . . . . . . . . . . .200.00
D. service of process, acceptance by superintendent and issuance of certificate of service, where issued. . . 10.00
E. agents' licenses and appointments -
(1) filing application for original agent license and issuance of license, if issued. . . . . . . . 30.00
(2) appointment of agent -
(a) filing appointment, per kind of insurance, each insurer. . . . . . . . . . . . . . . . . .20.00
(b) continuation of appointment, each insurer, each year continued. . . . . . . . . . . . . . . 20.00
(3) variable annuity agent's license -
(a) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 30.00
(b) continuation of appointment each
year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
(4) temporary license as to life and health insurance or both. . . . . . . . . . . . . . . . . . . . .30.00
(a) as to property insurance. . . .30.00
(b) as to casualty/surety
insurance. . . . . . . . . . . . . . . . . . . . . . . . .30.00
(c) as to vehicle insurance. . . . 30.00
(5) appointment of agent by agency. . . .30.00
F. solicitor license -
(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00
(2) continuation of appointment, per kind of insurance, each year. . . . . . . . . . . . . . . . . . . 20.00
G. broker license -
(1) filing application for license and issuance of original license, if issued. . . . . . . . . .30.00
(2) annual continuation of
license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00
H. insurance vending machine license -
(1) filing application for original license and issuance of license, if issued, each machine. . . . . 25.00
(2) annual continuation of license, each
machine. . . . . . . . . . . . . . . . . . . . . . . . . .25.00
I. examination for license, application for examination conducted directly by superintendent, each grouping of kinds of insurance to be covered by the examination as provided by the superintendent's rules, and payable as to each instance of examination. . . . . . . . . . . . . . . . . .50.00
J. surplus line insurer - filing application for qualification as eligible surplus [lines] line
insurer. . . . . . . . . . . . . . . . . . . . . . . . 1,000.00
K. surplus line broker license -
(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00
(2) annual continuation of
license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00
L. adjuster license -
(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00
(2) annual continuation of
license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00
M. rating organization or rating advisory organization license -
(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . .100.00
(2) annual continuation of
license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00
N. nonprofit health care plans -
(1) filing application for preliminary permit and issuance of permit, if issued. . . . . . . . . . . . 100.00
(2) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers
(3) annual statement, filing. . . . . . 200.00
(4) agents and solicitors -
(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00
(b) examination for license conducted directly by superintendent, each instance of
examination. . . . . . . . . . . . . . . . . . . . . . . .50.00
(c) annual continuation of
appointment. . . . . . . . . . . . . . . . . . . . . . . .20.00
O. prepaid dental plans -
(1) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers
(2) annual report, filing. . . . . . . .200.00
(3) agents and solicitors -
(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00
(b) examination for license conducted directly by superintendent, each instance of
examination. . . . . . . . . . . . . . . . . . . . . . . .50.00
(c) continuation of license, each
year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
P. prearranged funeral insurance - application for certificate of authority, issuance, continuation, reinstatement, charter documents, filing annual statement, licensing of sales representatives - same as for insurers
Q. premium finance companies -
(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00
(2) annual renewal of license. . . . . .100.00
R. motor clubs -
(1) certificate of authority -
(a) filing application for original certificate of authority and issuance of certificate of authority, if issued. . . . . . . . . . . . . . . . . . .200.00
(b) annual continuation of certificate of authority. . . . . . . . . . . . . . . . . . . . . . .100.00
(2) sales representatives -
(a) filing application for registration or license and issuance of registration or license, if issued, each representative. . . . . . . . . . . . . . . . . . . .20.00
(b) annual continuation of registration or license, each representative. . . . . . . . . . . . . .20.00
S. bail bondsmen -
(1) filing application for original license as bail bondsman or solicitor, and issuance of license, if
issued. . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
(2) examination for license conducted directly by superintendent, each instance of
examination. . . . . . . . . . . . . . . . . . . . . . . .50.00
(3) continuation of appointment, each
year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
T. securities salesperson license -
(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 25.00
(2) renewal of license, each year. . . . 25.00
U. for each signature and seal of the superintendent affixed to any instrument. . . . . . . . . 10.00
V. required filing of forms or rates - by all lines of business other than property or casualty -
(1) rates. . . . . . . . . . . . . . . . 50.00
(2) major form - each new policy and each package submission, which can include multiple policy forms, application forms, rider forms, endorsement forms or amendment forms. . . . . . . . . . . . . . . . . . . . . . . . . . .30.00
(3) incidental forms and rates - forms filed for informational purposes; riders, applications, endorsements and amendments filed individually; rate service organization reference filings; rates filed for informational
purposes. . . . . . . . . . . . . . . . . . . . . . . . . 15.00
W. health maintenance organizations -
(1) filing an application for a certificate of authority. . . . . . . . . . . . . . . . . . . . . . . 1,000.00
(2) annual continuation of certificate of authority, each year continued. . . . . . . . . . . . . .200.00
(3) filing each annual report . . . . 200.00
(4) filing an amendment to organizational documents requiring approval. . . . . . . . . . . . . . .200.00
(5) filing informational
amendments. . . . . . . . . . . . . . . . . . . . . . . . 50.00
(6) agents and solicitors -
(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00
(b) examination for license, each instance of examination. . . . . . . . . . . . . . . . . .50.00
(c) annual continuation of
appointment . . . . . . . . . . . . . . . . . . . . . . . 20.00
X. purchasing groups and foreign risk retention groups -
(1) original registration. . . . . . . .500.00
(2) annual continuation of
registration. . . . . . . . . . . . . . . . . . . . . . .200.00
(3) agent or broker fees same as for authorized insurers
Y. third party administrators -
(1) filing application for original individual insurance administrator license. . . . . . . . . . . . . .30.00
(2) filing application for original officer, manager or partner insurance administrator
license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00
(3) continuation or renewal of annual
license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00
(4) examination for license conducted directly by the superintendent, each examination. . . . . . . . . .75.00
(5) each request for a duplicate license or for each name change. . . . . . . . . . . . . . . . . . . 30.00
(6) filing of annual report. . . . . . .50.00.
An insurer shall be subject to additional fees or charges, termed retaliatory or reciprocal requirements, whenever form or rate-filing fees in excess of those imposed by state law are charged to insurers in New Mexico doing business in another state or whenever a condition precedent to the right to issue policies in another state is imposed by the laws of that state over and above the conditions imposed upon insurers by the laws of New Mexico; in those cases, the same form or rate-filing fees may be imposed upon an insurer from another state transacting or applying to transact business in New Mexico so long as the higher fees remain in force in the other state. If an insurer does not comply with the additional retaliatory or reciprocal requirement charges imposed under this subsection, the superintendent may refuse to grant or may withdraw approval of the tendered form or rate filing.
All fees are earned when paid and are not refundable."
Section 5. Section 59A-10-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 165) is amended to read:
"59A-10-5. DEPOSITORIES DESIGNATED BY TREASURER.--The state treasurer may designate any solvent trust company or other solvent financial institution having trust powers [domiciled] and offices located in this state as the state treasurer's depository to receive and hold any general, special or excess deposit of an insurer under [this article] Chapter 59A, Article 10 NMSA 1978. The deposit shall be so handled at the expense, if any, of the insurer, and the state of New Mexico shall not be responsible for safekeeping thereof."
Section 6. Section 59A-14-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 239, as amended) is amended to read:
"59A-14-1. SCOPE OF ARTICLE--PURPOSE--NECESSITY FOR REGULATION.--
A. Chapter 59A, Article 14 NMSA 1978 governs the placing of insurance of New Mexico risks, through licensed surplus line brokers, in insurers not otherwise authorized to transact insurance in this state and subject to the conditions for such placing as stated in that article; qualifications, licensing and duties and responsibilities of surplus line brokers; and other provisions as to such surplus line business and brokers. As to unauthorized insurers in general, and in respects other than as to surplus line, refer to Chapter 59A, Article 15 NMSA 1978.
B. Chapter 59A, Article 14 NMSA 1978 shall not apply as to reinsurance or to the following insurances [when placed by general lines agents or surplus line brokers licensed as such by this state]:
(1) wet marine and transportation insurance, as defined in Section 59A-7-5 NMSA 1978;
(2) insurance of subjects located, resident or to be performed wholly outside this state or on vehicles or aircraft owned and principally garaged outside this state;
(3) insurance of property and operations of railroads engaged in interstate commerce;
(4) insurance of aircraft of common carriers, or cargo of such aircraft, or against liability, other than employer's liability, arising out of ownership, maintenance or use of such aircraft;
(5) insurance of automobile bodily injury and property damage liability risks when written in Mexican insurers and covering in Mexico and not in the United States; or
(6) insurance independently procured.
C. Chapter 59A, Article 14 NMSA 1978 shall be liberally construed and applied to promote its underlying purposes, which include:
(1) protecting insureds and persons seeking insurance in this state;
(2) permitting surplus lines insurance to be placed with reputable and financially sound unauthorized insurers, but only pursuant to Chapter 59A, Article 14 NMSA 1978;
(3) establishing a system of regulation that will permit controlled access to surplus lines insurance in this state; and
(4) assuring collection of revenues and other amounts due to this state."
Section 7. Section 59A-14-7 NMSA 1978 (being Laws 1984, Chapter 127, Section 245, as amended by Laws 1999, Chapter 272, Section 19 and also by Laws 1999, Chapter 289, Section 21) is amended to read:
"59A-14-7. SURPLUS LINE BROKER LICENSE REQUIRED--QUALIFICATIONS FOR LICENSE.--
A. No person shall in New Mexico be, act as or hold out to be a surplus line broker or place insurance of risks resident, located or to be performed in New Mexico in any unauthorized insurer on behalf of others and for compensation as an independent contractor in any form, unless licensed as a surplus line broker under Chapter 59A, Article 14 NMSA 1978.
B. The superintendent shall, upon due application and payment of the license fee, issue a license as surplus line broker to a person qualified as follows:
(1) if the applicant is an individual, the individual must [be currently licensed as an insurance agent in this state as to the kinds of insurance to be exported under the surplus line broker license applied for, and] have had experience or special training or education sufficient in duration and character [as such an agent as] to render the applicant, in the opinion of the superintendent, reasonably competent to engage in business as a surplus line broker; and
(2) if the applicant is a firm or corporation, all individuals to represent it as a surplus lines broker in this state must be licensed [agents. Each such individual shall be qualified as for an individual license as surplus line broker, and an additional license fee shall be paid as to each individual, in excess of one, who is to exercise the surplus line broker license powers; and
(3) must file with the application the bond provided for in Section 59A-14-8 NMSA 1978] surplus lines brokers.
C. Licensing procedure, duration and related matters are as provided in Chapter 59A, Article 11 NMSA 1978, and license fee is as specified in Section 59A-6-1 NMSA 1978."
Section 8. Section 59A-17-34 NMSA 1978 (being Laws 1984, Chapter 127, Section 329, as amended) is amended to read:
"59A-17-34. HEARING AND REVIEW AS TO SUPERINTENDENT'S ACTIONS.--
A. Any person aggrieved by any action, threatened action or failure to act of the superintendent or otherwise under Chapter 59A, Article 17 NMSA 1978 shall have the same right to a hearing before the superintendent with respect thereto as provided for in general under Section 59A-4-15 NMSA 1978. Notice of hearing shall be given, the hearing conducted, rights and powers exercised and the superintendent's order on hearing made and given as provided as to hearings in general under the applicable provisions of Chapter 59A, Article 4 NMSA 1978.
B. Any person aggrieved by the superintendent's order [on such hearing] issued pursuant to this section or by the superintendent's refusal to hold the hearing may request a review by the public regulation commission in the manner set forth by rule of the commission. The request for review shall be filed no later than thirty days after the issuance of the order of the superintendent or the superintendent's refusal to hold a hearing."
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