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F I S C A L I M P A C T R E P O R T

SPONSOR Leavell

ORIGINAL DATE

LAST UPDATED

02/19/07

03/01/07 HB

SHORT TITLE Insurance Licensee Training

SB 993/aSCORC/aSFl

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 1188; and Section 7 of SB 350.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Regulation Commission (PRC)

SUMMARY

Synopsis of SFl Amendment

The Senate Floor Amendment clarifies a person issued a limited license to sell insurance

incidental to their primary duties and for a specific purpose not be otherwise licensed under the

Insurance Code.

Synopsis of SCORC Amendment

The Senate Corporations & Transportation Committee Amendment inserts an emergency clause

that the Act takes effect immediately.

Synopsis of Original Bill

Senate Bill 993 amends Section 59A-12-18 NMSA relating to Agents, Brokers and Solicitors of

Insurance; provides for clarification of training responsibilities of employees for a limited

licensee; and, holds the limited licensee responsible for an employee’s conduct. The bill also

removes a general lines agent from any oversight responsibilities toward licensees.

Senate Bill 993/aSCORC/aSFl– Page

2

FISCAL IMPLICATIONS

PRC reports the number of limited licensees affected is so small that the fiscal impact should be

considered zero.

SIGNIFICANT ISSUES

The bill clarifies the issuance of a limited agent's license to applicants who are retail vendors or

lessors of communication equipment or services. Under current law, the license authorizes the

licensee to sell insurance covering the loss, theft, mechanical failure or malfunction of or damage

to the communication equipment. The bill proposes to amend training requirements and

oversight by holding the licensee responsible to provide training for its employees and holds the

licensee responsible for an employee’s conduct. As used in the 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 signals or service and includes services related to the use of such devices such as

access to a network.

PERFORMANCE IMPLICATIONS

The PRC reports that this bill simplifies the procedure for limited licensing of vendors of

telecommunication devices who sell insurance on the equipment. Instead of licensing each retail

salesperson, the employer of the salesperson will be licensed and held accountable for training

their salespeople and for any actions of the salespeople related to the sale of the insurance.

Typically, the only solicitation activity is, “Do you want the insurance on your new phone."

ADMINISTRATIVE IMPLICATIONS

Removal of unnecessary provisions of the Insurance Code will improve efficiency of Insurance

Division operations.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates HB 1188; and Section 7 of SB 350

OTHER SUBSTANTIVE ISSUES

Under current law, limited licenses are issued to applicants employed as transportation ticket

sellers by public carriers who sell insurance; and, to applicants employed by vendors of

merchandise or by a financial institution making consumer loans as long as the credit life and

health insurance offered is customarily required.

Under current law, an "agent" is a person appointed by an insurer authorized to transact

insurance in this state, to solicit applications for insurance or annuity contracts on its behalf, to

countersign insurance policies or contracts if expressly so authorized by the insurer, and to

perform such other services relative to such transactions as the insurer may authorize.

Senate Bill 993/aSCORC/aSFl– Page

3

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Less efficient administration of the Insurance Code due to unnecessarily stringent provisions

remaining in the Insurance Code.

AHO/nt