0001|                        SENATE BILL 633
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0002|     42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003|     1996
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0004|                         INTRODUCED BY
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0005|                        GARY DON REAGAN
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0006|     
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0007|     
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0008|     
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0009|     
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0010|     
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0011|                             AN ACT
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0012|     RELATING TO TITLE INSURANCE; CLARIFYING TITLE INSURANCE AND
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0013|     TITLE COMMITMENTS; AMENDING CERTAIN SECTIONS OF THE NMSA 1978.
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0014|     
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0015|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0016|       Section 1.  Section 59A-30-5 NMSA 1978 (being Laws 1985,
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0017|     Chapter 28, Section 5) is amended to read:
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0018|       "59A-30-5.  POLICY FORMS.--No title insurer or title
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0019|     insurance agent shall use any form of title insurance policy
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0020|     other than the uniform forms promulgated by the superintendent
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0021|     under the New Mexico Title Insurance Law. <u>The uniform title
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<u></u>0022| <u>    insurance policy form shall be a contract of indemnity.  The
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<u></u>0023| <u>    form's terms and language shall state the limit and extent of
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<u></u>0024| <u>    the protection, assurances and coverage provided.</u>  The
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0025|     superintendent shall not promulgate any uniform form under which
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0001|     the coverage offered is excessive or inadequate in relation to
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0002|     the premium charged for the coverage."
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0003|       Section 2.  Section 59A-30-11 NMSA 1978 (being Laws 1985,
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0004|     Chapter 28, Section 11) is amended to read:
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0005|       "59A-30-11.  UNDERWRITING STANDARDS AND RECORD RETENTION.--
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0006|            A. <u>In order to protect the financial stability of
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<u></u>0007| <u>    title insurance underwriters doing business in the state</u>, no
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0008|     title insurance policy <u>or commitment to issue title insurance</u>
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0009|     may be written unless the title insurer or its title insurance
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0010|     agent has caused to be conducted a reasonable search and
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0011|     examination of the title using an abstract plant meeting the
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0012|     requirements of Section 59A-12-13 NMSA 1978 and has caused to be
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0013|     made a determination of insurability of title in accordance with
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0014|     sound underwriting practices. <u>A title insurance policy or title
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<u></u>0015| <u>    commitment is not and does not contain a statement of the
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<u></u>0016| <u>    condition of title to real property.  A title commitment is a
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<u></u>0017| <u>    statement of the terms and conditions upon which the underwriter
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<u></u>0018| <u>    is willing to issue its title insurance policy, which is a
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<u></u>0019| <u>    contract of indemnity.  This section neither establishes nor
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<u></u>0020| <u>    creates a statutory duty owed to any seller of real estate by a
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<u></u>0021| <u>    title insurer.  Violations of this section shall be reported to
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<u></u>0022| <u>    the superintendent for investigation and enforcement.</u>
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0023|            B.  Evidence of the examination of title and
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0024|     determination of insurability shall be preserved and retained in
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0025|     the files of the title insurer or its title insurance agent for
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0001|     a period of not less than fifteen years after the title
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0002|     insurance policy has been issued.  Instead of retaining the
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0003|     original evidence, the title insurer or title insurance agent
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0004|     may in the regular course of business establish a system whereby
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0005|     all or part of the evidence is recorded, copied or reproduced by
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0006|     any process that accurately and legibly reproduces or forms a
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0007|     durable medium for reproducing the contents of the original. 
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0008|     This subsection shall not apply to:
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0009|                 (1)  a title insurer assuming liability through
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0010|     a contract of reinsurance; or
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0011|                 (2)  a title insurer acting as coinsurer if one
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0012|     of the other coinsuring title insurers has complied with this
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0013|     section."
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0014|                              
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