0001| AN ACT | 0002| RELATING TO INSURANCE; AMENDING CERTAIN SECTIONS OF THE NEW MEXICO | 0003| INSURANCE CODE. | 0004| | 0005| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0006| Section 1. Section 59A-2-9 NMSA 1978 (being Laws 1984, Chapter | 0007| 127, Section 27) is amended to read: | 0008| "59A-2-9. RULES AND REGULATIONS--PROMULGATION--VIOLATION.-- | 0009| A. The superintendent, after a hearing thereon, may make | 0010| reasonable rules and regulations necessary for or as an aid to | 0011| administration or effectuation of any provision of the Insurance Code | 0012| administered by the superintendent, and from time to time withdraw, | 0013| modify or amend any such rule or regulation. | 0014| B. No such rule or regulation shall extend, modify or | 0015| conflict with any such provision or other laws of New Mexico. | 0016| C. The superintendent shall file all new rules, amendments | 0017| of rules or repeals of rules in accordance with the State Rules Act | 0018| not later than the submittal deadline for publication in the New | 0019| Mexico register on or before the effective date of any such rule, | 0020| amendment or repeal. | 0021| D. Willful violation of any such rule or regulation shall | 0022| subject the violator to such penalty as may be applicable under the | 0023| Insurance Code for violation of the provision to which the rule or | 0024| regulation relates; but no penalty shall apply to any act done or | 0025| omitted in good faith in conformity with any such rule or regulation, | 0001| notwithstanding that the rule or regulation may, after such act or | 0002| omission, be amended or rescinded or determined by judicial or other | 0003| authority to be invalid for any reason." | 0004| Section 2. Section 59A-4-16 NMSA 1978 (being Laws 1984, Chapter | 0005| 127, Section 60) is amended to read: | 0006| "59A-4-16. NOTICE OF HEARING.-- | 0007| A. Except where a different period is expressly provided, | 0008| the superintendent shall give written notice of the hearing not less | 0009| than twenty days in advance. The notice shall state the date, time | 0010| and place of the hearing and specify the matters to be considered | 0011| thereat. | 0012| B. If any person is entitled to a hearing by any provision | 0013| of the Insurance Code before any proposed action is taken, or if the | 0014| superintendent otherwise deems advisable, notice of the hearing may be | 0015| in the form of a notice to show cause, stating that proposed action | 0016| may be taken unless such person shows cause at a hearing to be held as | 0017| specified in the notice why the action should not be taken, and | 0018| stating the basis of the proposed action. | 0019| C. If a hearing is to be held for consideration of rules of | 0020| the superintendent, the superintendent may give notice of the hearing | 0021| by publication thereof in a newspaper of general circulation in this | 0022| state, and once in the New Mexico register; and the superintendent | 0023| shall mail the notice to all persons who had requested the same in | 0024| writing in advance and shall have paid to the superintendent the | 0025| reasonable costs of such mailing as fixed by the superintendent. | 0001| D. If the hearing is for a purpose other than the | 0002| consideration of rules of the superintendent, and if the persons to be | 0003| given notice are not specified in the provision pursuant to which the | 0004| hearing is held, the superintendent shall give the notice to all | 0005| persons whose pecuniary interests, to the superintendent's knowledge | 0006| or belief, are to be directly and immediately affected by the hearing. | 0007| E. All such notices, except published notice, shall be | 0008| given as provided for in 59A-2-10 NMSA 1978. | 0009| F. The superintendent shall specify in the notice of | 0010| hearing whether the hearing is to be an administrative hearing | 0011| pursuant to Section 59A-4-17 NMSA 1978 or an informal hearing pursuant | 0012| to Section 59A-4-18 NMSA 1978." | 0013| Section 3. Section 59A-5-26 NMSA 1978 (being Laws 1984, Chapter | 0014| 127, Section 93) is amended to read: | 0015| "59A-5-26. SUSPENSION, LIMITATION OR REVOCATION OF AUTHORITY-- | 0016| DISCRETIONARY AND SPECIAL GROUNDS.-- | 0017| A. The superintendent may, at his discretion, suspend, | 0018| limit or revoke an insurer's certificate of authority if he finds | 0019| after a hearing thereon, or upon waiver of hearing by the insurer, | 0020| that the insurer has: | 0021| (1) violated or failed to comply with any lawful | 0022| order of the superintendent; | 0023| (2) willfully violated or willfully failed to comply | 0024| with any lawful regulation of the superintendent; | 0025| (3) violated any provision of the Insurance Code | 0001| other than those for violation of which suspension or revocation is | 0002| mandatory; or | 0003| (4) reinsured all or substantially all of its risks, | 0004| or all or substantially all of its risks in a particular kind of | 0005| insurance, in another insurer. | 0006| B. In lieu of suspension or revocation of certificate of | 0007| authority as provided in Subsection A of this section, the | 0008| superintendent may, at his discretion, levy upon the insurer and the | 0009| insurer shall forthwith pay to the superintendent, an administrative | 0010| fine of not more than five thousand dollars ($5,000). The | 0011| superintendent shall promptly deposit with the state treasurer to the | 0012| credit of the general fund all money received under this subsection. | 0013| C. The superintendent shall suspend or revoke an insurer's | 0014| certificate of authority on any of the following grounds, if found | 0015| after a hearing thereon that the insurer: | 0016| (1) is in unsound condition, or being fraudulently | 0017| conducted, or in such condition or using such methods and practices in | 0018| conduct of its business as to render its further transaction of | 0019| insurance in this state currently or prospectively hazardous or | 0020| injurious to policyholders or the public; | 0021| (2) with such frequency as to indicate its general | 0022| business practice in this state: | 0023| (a) has without just cause failed to pay, or | 0024| delayed payment of, claims arising under its policies, whether the | 0025| claim is in favor of an insured or in favor of a third person with | 0001| respect to the liability of an insured to such third person; or | 0002| (b) without just cause compels insureds or | 0003| claimants to accept less than amount due them or to employ attorney or | 0004| to bring suit against the insurer or such an insured to secure full | 0005| payment or settlement of a claim; | 0006| (3) refuses to be examined, or if its directors, | 0007| officers, employees or representatives refuse to submit to examination | 0008| relative to its affairs, or to produce books, papers, records, | 0009| contracts, correspondence or other documents for examination by the | 0010| superintendent when required, or refuses or fails to pay expenses of | 0011| the examination or to perform any other legal obligation relative to | 0012| the examination; or | 0013| (4) has failed to pay any final judgment rendered | 0014| against it in this state upon any policy, bond, recognizance or | 0015| undertaking as issued or guaranteed by it, within thirty days after | 0016| the judgment becomes final. | 0017| D. The superintendent may, at his discretion and without | 0018| advance notice or hearing thereon, immediately suspend the certificate | 0019| of authority of an insurer as to which proceedings for receivership, | 0020| conservation, rehabilitation or other delinquency proceedings have | 0021| been commenced in any state by the public insurance supervisory | 0022| officer of that state." | 0023| Section 4. Section 59A-8-9 NMSA 1978 (being Laws 1984, Chapter | 0024| 127, Section 126) is amended to read: | 0025| "59A-8-9. UNEARNED PREMIUM RESERVE, CASUALTY, VEHICLE, | 0001| PROPERTY, MARINE AND SURETY INSURANCES.--As to property, casualty, | 0002| vehicle and surety insurance, and marine and transportation | 0003| insurance other than as provided in Section 59A-8-10 NMSA 1978, | 0004| the insurer shall maintain as a liability an unearned premium | 0005| reserve on policies in force computed as follows: fifty percent | 0006| of the gross premium in force on policies having one year or less | 0007| to run and pro rata on those for longer periods, or pro rata for | 0008| all premiums in force." | 0009| |