SENATE BILL 477
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
John M. Sapien
AN ACT
RELATING TO INSURANCE; EXTENDING THE CONTINUATION OF ADJUSTER LICENSE TO A BIENNIAL BASIS; ADDING INDICTMENT OR BEING CHARGED WITH A CRIMINAL ACT AS A REASON FOR SUSPENSION, REVOCATION OR REFUSAL TO CONTINUE A LICENSE; ALLOWING THE SUPERINTENDENT OF INSURANCE TO WAIVE, SUSPEND OR EXTEND ADJUSTER LICENSING REQUIREMENTS IN A CATASTROPHE OR EMERGENCY; DEFINING "PUBLIC ADJUSTER"; CLARIFYING BOND REQUIREMENTS FOR INDEPENDENT AND PUBLIC ADJUSTERS; ELIMINATING TEMPORARY LICENSES FOR STAFF ADJUSTERS; EXPANDING RECORD RETENTION REQUIREMENTS OF INDEPENDENT AND PUBLIC ADJUSTERS; REQUIRING WORKERS' COMPENSATION INSURERS TO HAVE A RESIDENT ADJUSTER; PROVIDING REQUIREMENTS FOR PUBLIC ADJUSTER CONTRACTS; REQUIRING CERTAIN DISCLOSURES TO A CLIENT OF A PUBLIC ADJUSTER; PROVIDING FOR A CLIENT'S RIGHT TO RESCIND; REQUIRING A PUBLIC ADJUSTER TO DEPOSIT MONEY FROM A CLIENT IN AN ESCROW OR TRUST ACCOUNT; PROVIDING STANDARDS OF CONDUCT OF PUBLIC ADJUSTERS; REQUIRING PUBLIC ADJUSTERS TO REPORT ADMINISTRATIVE ACTIONS AGAINST THE PUBLIC ADJUSTER; PROVIDING FOR PENALTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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
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] biennial continuation of
license. . . . . . . . . . . . . . . . . . . . . .[30.00] 60.00
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 2. Section 59A-11-10 NMSA 1978 (being Laws 1984, Chapter 127, Section 189, as amended) is amended to read:
"59A-11-10. CONTINUATION, EXPIRATION OF LICENSE.--
A. Each license, other than insurance agent, issued under this article shall continue in force until it is suspended, revoked or otherwise terminated, but except as may be provided pursuant to Section 59A-11-11 NMSA 1978, subject to payment to the superintendent annually on or before April 1, or December 31 as to motor club representatives, of the applicable continuation fee specified in Section 59A-6-1 NMSA 1978 accompanied by request for such continuation:
(1) for broker, surplus line broker, independent adjuster, public adjuster, bail bondsman license and similar other independent licensees, request shall be made and signed by the licensee;
(2) for agent (other than insurance agent) or staff adjuster, or solicitor license, request shall be made and signed by the employer or other principal, as applicable; or
(3) for vending machine, request shall be made and signed by the supervisory agent thereof.
B. Subject to Section 59A-11-11 NMSA 1978, any license referred to in Subsection A of this section not so continued shall be deemed to have terminated as of midnight on April 30, or December 31 as to motor club representatives then current; except that the superintendent may effectuate a request for continuation received within thirty days thereafter if accompanied by [annual] a continuation fee equal to one hundred fifty percent of the continuation fee otherwise required.
C. Within sixty days of obtaining an agent license, the licensee shall become appointed by an authorized insurer to act as its agent; otherwise the license shall expire. A person shall not act as an agent of an insurer unless the person becomes appointed as an agent of the insurer. Within fifteen days from the date an agency contract is executed or the first insurance application from the person is accepted by the insurer, the insurer shall file a notice of appointment on a form approved by the superintendent. The agent or the insurer may terminate an appointment by notifying the superintendent and the other party in writing of the termination. If at any time all of the licensee's appointments have been terminated for a period of sixty days, the agent's license shall expire.
D. If the superintendent has reason to believe that the competence of any licensee, or individual designated to exercise license powers, is questionable, the superintendent may require as condition to continuation of the license or license powers that the licensee or individual take and pass to the superintendent's satisfaction a written examination as required under the Insurance Code of new individual applicants for similar license.
E. This section shall not apply as to temporary licenses, which shall be for such duration and subject to extension as provided in the respective sections of the Insurance Code by which such licenses are authorized.
F. All licenses and appointments as to an insurer or other principal [which] that ceases to be authorized to transact business in this state shall automatically terminate without notice as of date of such cessation.
G. A license shall also terminate upon death of the licensee, if an individual, or dissolution if a corporation, or change in partnership members if a firm; subject, in case of a firm, to continuation of the license for a reasonable period while application for new license is being made or pending, under reasonable conditions provided in regulations of the superintendent."
SECTION 3. Section 59A-11-14 NMSA 1978 (being Laws 1984, Chapter 127, Section 193, as amended) is amended to read:
"59A-11-14. SUSPENSION, REVOCATION, REFUSAL TO CONTINUE LICENSE--GROUNDS.--
A. In addition to a reason [therefor] provided under other provisions of the Insurance Code as to particular licenses, the superintendent may suspend, revoke or refuse to continue [any] a license issued under Chapter 59A, Article 11 NMSA 1978 for any of the following reasons applicable as to licensee:
(1) for any cause for which issuance of the license could have been refused had it then existed and been known to the superintendent;
(2) violation of [any] a provision of the Insurance Code or other law applicable to the business transacted under the license;
(3) willful failure to comply with, or willful violation of, [any] a lawful order or rule of the superintendent;
(4) material misstatement, misrepresentation or fraud in obtaining the license;
(5) failure to pass [any] an examination required by the superintendent, subsequent to issue of license, under Subsection D of Section 59A-11-10 NMSA 1978;
(6) misappropriation, conversion or unlawful withholding, or failure or refusal to pay over upon demand, [any] money belonging to insurers or others and received in conduct of business under the license;
(7) fraudulent or dishonest practices in conduct of business under the license;
(8) being charged or indicted for a criminal act related to the duties under the license;
[(8)] (9) intentional material misrepresentation of the terms of [any] an existing or proposed insurance policy, contract or other service within scope of the license;
[(9)] (10) conviction by final judgment of a felony involving dishonesty or breach of trust;
[(10)] (11) aiding, abetting or assisting another person to violate [any] a provision of the Insurance Code; or
[(11)] (12) if in conduct of affairs under the license, the licensee has used fraudulent, coercive or dishonest practices, or [has] is shown [himself] to be incompetent, untrustworthy, financially irresponsible or a source of injury and loss to the public; or that the interests of the insureds or the public are not being properly served under the license.
B. The superintendent may suspend, revoke or refuse to continue the license of a firm or corporation for any [of such causes] cause as [relate] relates to [any] an individual designated in or registered as to the license to exercise its powers.
C. The superintendent may require a criminal history background investigation of a current license holder by means of fingerprint checks by the department of public safety and the federal bureau of investigation, at the expense of the license holder, using the license holder's fingerprints or other identifying information. The information shall be used by the superintendent solely in determining whether to suspend, revoke or refuse to continue a license."
SECTION 4. A new section of Chapter 59A, Article 11 NMSA 1978 is enacted to read:
"[NEW MATERIAL] ADJUSTER LICENSES--PROVISIONS DURING CATASTROPHE OR EMERGENCY.--The superintendent may waive, suspend or extend the licensing requirements of any adjuster handling claims in the state in the event of a catastrophe or emergency as determined by the superintendent."
SECTION 5. 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
(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.]
A. "adjuster" means an individual who:
(1) investigates, negotiates or settles a loss or claim arising under an insurance contract on behalf of a client, insurer, insured or self-insurer, for a fee, commission or other compensation but does not, on behalf of an insured or client, investigate, negotiate, settle or adjust a claim involving personal injury to the insured or client;
(2) advises the client or insured of the client's or the insured's rights to settlement and the client's or insured's rights to settle, arbitrate and litigate the dispute; and
(3) is not:
(a) 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;
(b) 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 authorized insurer and solely under policies issued by the authorized insurer;
(c) 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;
(d) a claims agent or investigator employed by a self-insurer for the adjustment of claims for the self-insurer;
(e) an appraiser or other individual who is principally employed by an insurer, third-party administrator, independent adjuster or self-insurer who inspects and provides monetary estimates of damages sustained by an insured or third party and does not adjust, investigate or negotiate claims;
(f) a person employed only for the purpose of obtaining facts surrounding a loss or furnishing technical assistance to an adjuster, including photographers, estimators, private investigators, engineers and handwriting experts;
(g) a licensed health care provider or employee of a licensed health care provider who prepares or files a health claim on behalf of a patient;
(h) a person that settles subrogation claims between insurers; or
(i) a person who is employed to investigate suspected fraudulent insurance claims but does not adjust losses or determine claim payments;
B. "client" means an insured or a third-party claimant that hires the services of a public adjuster; C. "independent adjuster" means an adjuster who:
(1) is not a public adjuster or a staff adjuster;
(2) independently contracts with insurers or self-insurers for compensation or is a representative or an employee of an independent adjuster; and
(3) investigates, negotiates or settles property, casualty or workers' compensation claims for insurers or self-insurers;
D. "public adjuster" means an adjuster who:
(1) acts or aids in relation to first party claims arising under insurance contracts that insure the real or personal property of a client, on behalf of the client in negotiating for, or effecting the settlement of, a claim for loss or damage covered by an insurance contract;
(2) acts or aids in relation to a third-party claim, or represents a third-party claimant, against an insured or insurer, on behalf of the third party in negotiating for or effecting the settlement of a claim for loss of real or personal property;
(3) advertises for employment as a public adjuster of insurance claims or solicits business or represents to the public as being a public adjuster of insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or
(4) directly or indirectly solicits business, investigates or adjusts losses or advises a client about claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy for the insured;
E. "resident adjuster" means an adjuster who resides and conducts business primarily in the state; and
F. "staff adjuster" means an adjuster who is a salaried employee of an insurer or affiliates of the insurer, representing and adjusting claims solely under policies of the insurer."
SECTION 6. Section 59A-13-3 NMSA 1978 (being Laws 1984, Chapter 127, Section 231, as amended) is amended to read:
"59A-13-3. LICENSE REQUIRED.--
A. No person shall, in this state, act as, or [hold himself out to be] make any representation as being, an adjuster unless licensed as such by the superintendent under the Insurance Code.
B. No person, regardless of location, shall act as, or [hold himself out to be] make any representation as being, an adjuster with respect to workers' compensation claims of claimants [resident] residing or located in New Mexico unless licensed as such by the superintendent under the Insurance Code.
C. The superintendent may assess penalties pursuant to Section 59A-1-18 NMSA 1978 against an insurer that employs, contracts with or otherwise uses as an adjuster an individual who is not licensed as an adjuster under the Insurance Code."
SECTION 7. Section 59A-13-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 232) is amended to read:
"59A-13-4. QUALIFICATIONS FOR LICENSE AS ADJUSTER.--
A. The superintendent shall license as an adjuster only an individual who is otherwise in compliance with [this article and Article 11 (licensing procedures) of the Insurance Code] Chapter 59A, Articles 11 and 13 NMSA 1978, and who has furnished evidence satisfactory to the superintendent that the applicant for license:
(1) is not less than eighteen [(18)] years of age;
[(2) is a bona fide resident of this state, or of a state or country that permits residents of this state to act as adjusters therein, except that under circumstances of necessity the superintendent may waive the requirement of reciprocity;
(3)] (2) can demonstrate a good business reputation, and intends to engage in a bona fide manner in the business of adjusting insurance claims;
[(4)] (3) except as to temporary license provided for under Section [234 of this article] 59A-13-6 NMSA 1978, has had at least one year's experience or special education or training in handling of losses or claims under insurance contracts, such experience, education and training to be of such nature and extent as to demonstrate applicant's competence to fulfill the responsibilities of an adjuster; and
[(5)] (4) has [filed the bond required under] met the requirements of Section [233 of this article] 59A-13-5 NMSA 1978.
B. [Paragraphs (2) and (5) above] Paragraph (4) of Subsection A of this section shall not apply [as] to staff adjusters.
C. Individuals holding licenses as adjusters on the effective date of the Insurance Code shall be deemed to meet the qualifications for the license except as in [Article 11 (licensing procedures) of the Insurance Code and in this article hereinafter provided] Chapter 59A, Articles 11 and 13 NMSA 1978."
SECTION 8. Section 59A-13-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 233) is amended to read:
"59A-13-5. BOND.--
A. With application for license, temporary or otherwise, as an adjuster other than as staff adjuster, the applicant shall file with the superintendent a surety bond in favor of the superintendent in aggregate amount of not less than ten thousand dollars ($10,000), if an independent adjuster, except as provided in Subsection D of this section, and not less than twenty thousand dollars ($20,000) if a public adjuster, conditioned to pay actual damages resulting to the state of New Mexico or any member of the public in New Mexico from violation of law by the licensee while acting as an adjuster. The bond shall be one executed by an authorized surety insurer.
B. The bond shall remain in effect for the duration of the license, or until the surety is released from liability by the superintendent, or until cancelled by the surety. Without prejudice to any liability accrued prior to cancellation, the surety may cancel a bond by giving written notice to the superintendent at least thirty [(30)] days prior to effective date of cancellation.
C. The applicant or licensee may file with the superintendent a cash bond in like amount, in lieu of surety bond.
D. An independent adjuster whose employer maintains a bond equivalent to the bond described in Subsection A of this section is exempt from the provisions of this section."
SECTION 9. Section 59A-13-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 234) is amended to read:
"59A-13-6. TEMPORARY LICENSE.--
A. Upon application by an applicant meeting all qualifications for license except as to experience, education or training referred to in Section [232 of this article] 59A-13-4 NMSA 1978, the superintendent may issue a temporary license as adjuster, except as provided in Subsection B of this section, under which an individual employed by a licensed adjuster and undergoing education or training as an adjuster under direction and supervision of [such] the licensed adjuster, or an insurer's claim supervisor may act as an adjuster. Application for the license must be made, and the applicant registered with the superintendent, at beginning of the training period, and the license may be in force for a period not to exceed twelve [(12)] months, without right of renewal or continuation.
B. [The superintendent may issue a temporary license as adjuster to an individual employed by a licensed adjuster or an authorized insurer due to a catastrophe or emergency requiring immediate expansion of adjuster services in this state. Application for the license must be made through such licensed adjuster or insurer. Responsibility for the conduct of a temporary licensee rests jointly on the licensee and the employer adjuster or insurer. The temporary license may be in force for a period not to exceed three (3) months, without right of renewal or continuation. In considering the application for temporary license the superintendent may waive such of the qualifications for license stated in Section 232 of this article as the superintendent deems advisable.] A temporary license shall not be issued to a staff adjuster."
SECTION 10. Section 59A-13-9 NMSA 1978 (being Laws 1984, Chapter 127, Section 237, as amended) is amended to read:
"59A-13-9. PLACE OF BUSINESS.--
A. A licensed resident adjuster shall have and maintain a principal place of business in the state that is easily accessible to the public and is the place where the adjuster principally conducts transactions under the license. B. The address of the principal place of business of an adjuster licensed in the state, including an adjuster who does not reside in the state, shall appear on the application for license and on the license. The licensee shall promptly notify the superintendent of a change of address of the principal place of business. Failure to notify the superintendent of a change of address within twenty days shall subject the licensee to a penalty in the amount of fifty dollars ($50.00)."
SECTION 11. Section 59A-13-10 NMSA 1978 (being Laws 1984, Chapter 127, Section 238) is amended to read:
"59A-13-10. RECORDS OF INDEPENDENT OR PUBLIC ADJUSTER.--
A. [Each] An independent adjuster shall keep at the business address shown on [his] the independent adjuster's license a record of all transactions under the license. The record shall include:
(1) the documents relating to all investigations or adjustments undertaken; and
(2) a statement of any fee, commission or other compensation received or to be received by the adjuster on account of [such] the investigation or adjustment.
B. [The] An independent adjuster or the independent adjuster's employer shall make [such] the records available for examination by the superintendent at all reasonable times, and shall retain records as to a particular investigation or adjustment for not less than three [(3)] years after completion of [such] the investigation or adjustment, except if an independent adjuster or the independent adjuster's employer provides a complete copy of a record to the entity that hired the independent adjuster for an investigation or adjustment.
C. A public adjuster shall keep at the public adjuster's principal place of business a complete record of all transactions under the public adjuster license. A record shall include:
(1) the name of the client;
(2) the date, location and amount of the loss;
(3) a copy of the contract between the public adjuster and the client;
(4) the name of the insurer and the amount, expiration date and number of each policy carried with respect to the loss;
(5) an itemized statement of the client's recoveries;
(6) an itemized statement of all compensation received by the public adjuster in connection with the loss;
(7) a register of all money received, deposited, disbursed or withdrawn in connection with a transaction with a client, including fees, transfers and disbursements from a trust account and all transactions concerning interest-bearing accounts;
(8) the name of the public adjuster who executed the contract;
(9) the name of the attorney representing the client, if applicable, and the names of the claims representatives of the insurer; and
(10) evidence of financial responsibility in a format prescribed by the superintendent.
D. A public adjuster shall make the records required in Subsection C of this section available for examination by the superintendent at all reasonable times and shall retain records as to a particular investigation or adjustment for not less than three years after completion of the investigation or adjustment. Records submitted by a public adjuster that contain information identified in writing as proprietary shall be considered confidential trade secrets pursuant to the Uniform Trade Secrets Act."
SECTION 12. Section 59A-13-11 NMSA 1978 (being Laws 1989, Chapter 313, Section 2) is amended to read:
"59A-13-11. RESIDENT CLAIMS [REPRESENTATIVE FOR PAYMENT] REQUIREMENTS OF WORKERS' COMPENSATION [CLAIMS] ADJUSTERS.--Each workers' compensation insurer shall have at least one [claims representative within New Mexico, licensed as an adjuster] resident adjuster to pay workers' compensation claims of claimants [resident] residing or located in New Mexico. Such claims shall be paid promptly through such representatives from accounts in financial institutions located within New Mexico."
SECTION 13. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] PUBLIC ADJUSTER--DISCLOSURES--CONTRACT REQUIREMENTS--PROHIBITED PROVISIONS--CLIENT'S RIGHT TO RESCIND--NOTIFICATION TO INSURER.--
A. Prior to the signing of a contract with a client, a public adjuster shall provide a disclosure statement to the client that states:
"Property insurance policies obligate an insured to present a claim to the insured's insurance company for consideration. There are three types of adjusters that could be involved in that process. The three types of adjusters are:
(1) "Company Staff Adjuster" is an insurance adjuster who is an employee of an insurance company. A Company Staff Adjuster represents the interest of the insurance company and is paid by the insurance company and will not charge you a fee.
(2) "Independent Adjuster" is an insurance adjuster who is hired on a contract basis by an insurance company to represent an insurance company's interest in the settlement of a claim. An Independent Adjuster is paid by the insurance company and will not charge you a fee.
(3) "Public Adjuster" is an insurance adjuster who does not work for an insurance company. A Public Adjuster works for you to assist in the preparation, presentation and settlement of your claim. A Public Adjuster is hired by signing a contract in which you agree to pay the Public Adjuster a fee or commission based on a percentage of a settlement, or other method of compensation.
You are not required to hire a Public Adjuster to help you meet your obligations under your insurance policy, but you have the right to do so.
The Public Adjuster's fee, commission or other method of compensation is your obligation, not that of the insurance company.
You have the right to rescind this contract within three business days after this contract is signed. Your rescission must be in writing and mailed or delivered to the Public Adjuster at the address in the contract within the three-business-day period.
If an insurer pays or commits to pay your claim within three days of reporting the loss to the insurer, the Public Adjuster cannot receive as compensation a percentage of the total amount paid by the insurer to resolve the claim. The Public Adjuster is only entitled to receive a reasonable compensation from you for services provided by the Public Adjuster on your behalf, based on the time spent on your claim and expenses incurred by the Public Adjuster.
You have the right to initiate direct communications with your attorney, the insurer, the insurer's adjuster, the insurer's attorney or any other person regarding the settlement of your claim.".
B. A public adjuster's contract with a client shall be in writing, signed and dated by the public adjuster and the client and executed in duplicate to provide an original contract to the public adjuster and the client.
C. A public adjuster's contract shall be designated as a "public adjuster contract" and shall include:
(1) the public adjuster's full name as specified on the public adjuster's license;
(2) the public adjuster's principal place of business address and phone number;
(3) the public adjuster's license number;
(4) the client's full name, street address and name of insurer and policy number, if known to the client;
(5) a description of the loss and its location, if applicable;
(6) a description of the services to be provided to the client;
(7) attestation language stating that the public adjuster is fully bonded pursuant to state law;
(8) the type and amount of compensation the public adjuster is to receive for services;
(9) expenses to be reimbursed to the public adjuster from proceeds of the claim payment, specified by type and with the approval of the client;
(10) a statement that the client has the right to rescind the public adjuster contract within three business days after the public adjuster contract is signed; and
(11) a statement that, if an insurer pays or commits to pay a claim within three days of receiving notice of the loss, the public adjuster shall:
(a) not receive as compensation a percentage of the total amount paid by the insurer to resolve the claim; and
(b) only be entitled to receive a reasonable compensation from the client for services provided by the public adjuster on behalf of the client, based on the time spent on a claim and expenses incurred by the public adjuster.
D. A public adjuster contract shall not contain a provision that:
(1) allows a fee based on a percentage of settlement to be collected when money is due from an insurer, but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurer, rather than as a percentage of each check issued by an insurer;
(2) requires the client to authorize an insurer to issue a check or other payment only in the name of the public adjuster;
(3) imposes collection costs or late fees; or
(4) precludes a client from pursuing civil remedies.
E. Compensation provisions in a public adjuster contract shall not be redacted in a copy of the contract provided to the superintendent.
F. A client has a right to rescind a public adjuster's contract within three business days after the contract is signed by both the public adjuster and the client. The rescission shall be in writing and mailed or delivered to the public adjuster's address in the public adjuster contract within the three-business-day period. If a client exercises the right to rescind, anything of value given by the client to the public adjuster under the public adjuster contract shall be returned to the client within fifteen business days after the public adjuster has received the notice of rescission.
G. Prior to entering discussions with a client's insurer regarding a client's claim, a public adjuster shall provide the client's insurer with a notification letter, signed by the client, authorizing the public adjuster to represent the client's interest."
SECTION 14. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] PROCEDURE--WHEN INSURER PAYS A CLAIM WITHIN THREE DAYS OF REPORT OF LOSS.--If an insurer, within three business days after the date a loss is reported to the insurer, pays or commits to pay to the client the limit of the insurance policy, a public adjuster shall:
A. not receive as compensation a percentage of the total amount paid by an insurer to resolve a claim;
B. inform the client that the loss recovery amount may not be increased by the insurer; and
C. only be entitled to a reasonable compensation from the client for services provided by the public adjuster on behalf of the client, based on the time spent on a claim and expenses incurred by the public adjuster."
SECTION 15. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] ESCROW OR TRUST ACCOUNTS OF PUBLIC ADJUSTERS.--A public adjuster who receives, accepts or holds any funds on behalf of a client toward the settlement of a claim for loss or damage shall deposit the funds in a non-interest-bearing escrow or trust account in a financial institution insured by an agency of the federal government in the state of the public adjuster's principal place of business or in the state where the loss or damage occurred."
SECTION 16. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] STANDARDS OF CONDUCT OF PUBLIC ADJUSTER.--
A. A public adjuster is obligated to serve with objectivity and complete loyalty in the interest of a client and to render to the client information, counsel and service within the knowledge, understanding and opinion in good faith of the public adjuster as will best serve the client's insurance claim needs and interests.
B. A public adjuster shall not act or make any representation as being an independent or staff adjuster representing on the same claim.
C. A public adjuster shall not solicit or attempt to solicit a client during the progress of a loss-producing occurrence, as defined in the client's insurance contract.
D. A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under the Insurance Code.
E. A public adjuster shall not have a direct or indirect financial interest in any aspect of a claim, other than the salary, fee, commission or other consideration established in a public adjuster contract with the client, including:
(1) acquiring an interest in salvage of property subject to a public adjuster contract with a client; and
(2) referring or directing the client to get needed repairs or services in connection with a loss from any person or entity, if the public adjuster maintains or receives any financial interest in the person or entity to which the referral is made.
F. A public adjuster shall not adjust a claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage or the adjustment otherwise exceeds the public adjuster's current expertise.
G. A public adjuster shall not knowingly make any oral or written material misrepresentations or statements that are false or maliciously critical and intended to injure any person engaged in the business of insurance to any client or potential client.
H. A public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall perform repair work for the client.
I. A public adjuster shall not agree to any loss settlement without the client's knowledge and consent."
SECTION 17. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] REPORTING OF ACTIONS.--
A. An adjuster shall report to the superintendent any administrative action taken against the adjuster in the adjuster's professional capacity, in any jurisdiction or by any governmental agency in the state, within thirty days of the final disposition of the matter. The report shall include a copy of the order, consent to order or other relevant legal documents.
B. An adjuster shall report to the superintendent any criminal prosecution of the adjuster taken in any jurisdiction within thirty days of an initial pretrial hearing. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents."
SECTION 18. A new section of Chapter 59A, Article 13 NMSA 1978 is enacted to read:
"[NEW MATERIAL] SUPERINTENDENT--RULES.--The superintendent may adopt rules that the superintendent deems necessary to carry out the purposes of Chapter 59A, Article 13 NMSA 1978."
SECTION 19. SEVERABILITY.--If any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.
SECTION 20. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.
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