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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

1/18/08

1/21/08 HB

SHORT TITLE False Insurance Claims as Racketeering

SB 151

ANALYST Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Defender Department (PDD)

No Responses Received From

Administrative Office of the Courts (AOC)

Administrative Office of the District Attorneys (AODA)

Attorney General’s Office (AGO)

Department of Public Safety (DPS)

SUMMARY

Synopsis of Bill

Senate Bill 151 expands the crime of racketeering to include false application, claim or proof of

loss with respect to insurance. As explained by the Public Defender Department, it amends

NMSA 1978, § 30-41-1, et seq., the “Racketeering Act" to include within the definition

provided in § 30-42-3, an additional method by which racketeering may be committed. The bill

includes within this list “false application, claim or proof of loss" as provided in NMSA 1978, §

59A-16-23, which prohibits knowingly or willfully making a false or fraudulent statement or

representation as to a material fact in application for insurance for the purpose of obtaining

money or some benefit, or presenting a fraudulent claim in support for payment of loss under an

insurance policy.

Senate Bill 151 – Page

2

Currently, the statute defines “racketeering" as any act chargeable or indictable under the law of

New Mexico and punishable by imprisonment of over one year and involving number specific

offenses, including but not limited a number of crimes of dishonesty such as forgery, fraud,

embezzlement, illegal kickbacks and extortion. Violation of the insurance fraud statute is

punishable as a petty misdemeanor, misdemeanor, fourth, third or second degree felony

depending on the amount of the purported loss or potential loss to the victim insurer. A violation

of the racketeering statute itself is punishable as a second degree felony.

EO/nt