44TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 1999

RELATING TO INSURANCE; PROVIDING FOR INSURANCE REFORM BY MAKING CHANGES IN PROVISIONS COVERING MOTOR VEHICLE LIABILITY INSURANCE; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 59A-17-7.1 NMSA 1978 (being Laws 1987, Chapter 80, Section 1) is amended to read:

"59A-17-7.1. RATES--COVERAGE--MOTOR VEHICLE LIABILITY.--

A. The rates of a motor vehicle liability insurer shall not provide for an increase in the premium if based upon an accident in which the insured is not at fault in any manner as determined by either the accident report or the insurer. If the insurer determines that its insured is at fault contrary to the specific finding of an accident report that the insured is not at fault, the insurer shall reach its conclusion only after an investigation.

B. A motor vehicle liability insurer shall not cancel, or use as a basis for nonrenewal, an insurance policy if such cancellation or nonrenewal is based upon an accident in which the insured is not at fault in any manner as determined by either the accident report or the insurer. If the insurer determines that its insured is at fault contrary to the specific finding of an accident report that the insured is not at fault, the insurer shall reach its conclusion only after an investigation.

C. As used in this section, "motor vehicle liability insurer" means an insurer authorized to transact in this state the business of automobile and motor vehicle bodily injury, property damage liability and physical damage insurance.

D. Subsections A through C of this section [shall] do not apply if other factors exist, exclusive of the accident in which the insured is not at fault, [which] that allow for a premium increase, cancellation or nonrenewal of an insurance policy under the Insurance Code or regulations pursuant to the Insurance Code.

E. In classifying risks to be used in establishing rates for premiums, a motor vehicle liability insurer shall not use a classification based on age, gender or other factor that is not directly and specifically risk-related as defined by rule adopted by the superintendent."

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

"[NEW MATERIAL] GROUP PURCHASE OF MOTOR VEHICLE LIABILITY INSURANCE.--A group of persons may associate for the purpose of purchasing as a group motor vehicle liability insurance covering motor vehicles owned by persons in the group. The superintendent shall adopt rules to implement the provisions of this section."

Section 3. A new section of Chapter 59A, Article 12 NMSA 1978 is enacted to read:

"[NEW MATERIAL] AGENTS, BROKERS AND SOLICITORS REQUIRED TO OFFER LOWEST COST MOTOR VEHICLE LIABILITY POLICY TO APPLICANT.--An agent, broker or solicitor shall inform an applicant for a motor vehicle liability policy of the lowest premium policy available to the applicant through the agent, broker or solicitor for the coverage sought."

Section 4. A new section of the New Mexico Insurance Code is enacted to read:

"[NEW MATERIAL] MOTOR VEHICLE LIABILITY INSURER REQUIRED TO INFORM POLICY HOLDER OF AVAILABILITY OF LOWER PREMIUM COST POLICY AND OF FACTORS THAT MAY REDUCE PREMIUM OF POLICY HOLDER.--A motor vehicle liability insurer, as that person is defined in Section 59A-17-7.1 NMSA 1978, shall inform an insured:

A. of the availability of a lower premium cost policy for coverage identical to that provided under the insured's policy if such a policy becomes available due to a new market product or due to changes in eligibility of the insured for coverage; and

B. at the time of renewal of a motor vehicle liability policy, of factors that would decrease the premium cost to the insured for the policy renewal if the insured qualifies."

Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 1999.