New Mexico: Legislative Session Adjourns on a Quiet Note for the Insurance Industry

On Feb. 17, the New Mexico State Legislature adjourned its 30-day legislative session. The legislature was predominantly focused on budget-related legislation, but a few insurance-related bills were introduced: HB 851, Medical Malpractice Joint Underwriting Association Act, and HB 251, Remedies to Victims of Identity Theft.

House Bill 851 would have mandated that liability insurance carriers, other than automobile, homeowners and farm owner liability insurance, fund and participate in the creation of a Medical Malpractice Joint Underwriting Association to assist in improving availability and affordability of professional liability insurance for health-care providers.

According to NAMIC's Western State Affairs Manager Christian John Rataj, NAMIC was opposed to this legislation, because: 1) the bill would have required certain bodily injury liability carriers to contribute to the funding and operation of an association that is designed to address professional malpractice insurance not bodily injury insurance; 2) the bill would have adversely impacted market competition in the state; 3) the bill could have lead to increased insurance rates for consumers since they would ultimately have been the ones required to pay for this professional liability insurance subsidization; 4) the legislation would have required insurance carriers to use their policyholder surplus, which is set aside by carriers to ensure that they have the resources to settle claims, to pay the Medical Malpractice Joint Underwriting Association's annual assessments; and 5) the legislation failed to afford bodily injury liability insurance carriers with Substantive and Procedural Due Process.

House Bill 251 would have amended current law on civil remedies and criminal penalties for identity theft and would have created a provision in the law to allow consumers to place a security freeze on their consumer credit reports.

"NAMIC and the insurance industry were concerned with the language of the introduced legislation because the security-freeze provision of the legislation allowed neither for an 'insurance exclusion,' which is necessary for insurance carriers to provide timely and accurate insurance quotes to applicants, nor a provision that would allow insurance carriers the right to designate an application as incomplete if the consumer activates a security freeze that prevents the carrier from being able to thoroughly evaluate the applicant for insurance coverage," stated Rataj.

Neither HB 851 nor HB 251 made it out of their respective House committees during this brief legislative session. However, NAMIC and members of the insurance industry expect both bills to be introduced next session and adamantly contested by the insurance industry.

NAMIC will work in concert with its member companies and the rest of the insurance industry to oppose HB 851 and HB 251 next legislative session.

Direct questions to NAMIC State Affairs Manager Christian John Rataj.

Posted: Tuesday, February 21, 2006 12:00:00 AM. Modified: Tuesday, February 21, 2006 10:10:59 AM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.