0001|                           SENATE BILL 972
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                           MANNY M. ARAGON
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0005|     
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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|                                AN ACT
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0011|     RELATING TO TITLE INSURANCE; ENACTING THE TITLE INSURANCE
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0012|     GUARANTY ACT; AMENDING SECTIONS OF THE NMSA 1978.
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0013|     
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0014|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0015|          Section 1.  [<u>NEW MATERIAL</u>]  SHORT TITLE.--Sections 1
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0016|     through 18 of this act may be cited as the "Title Insurance
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0017|     Guaranty Act".
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0018|          Section 2.  [<u>NEW MATERIAL</u>]  PURPOSE.--The purpose of the
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0019|     Title Insurance Guaranty Act is to provide a mechanism for
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0020|     continuation of coverage and payment of covered claims under
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0021|     certain title insurance policies, to avoid excessive delay in
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0022|     payment and avoid financial loss to policyholders because of
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0023|     insolvency of a title insurer, to assist in detection and
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0024|     prevention of title insurer insolvencies and to provide an
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0025|     association to assess the cost of such protection among title
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0001|     insurers.
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0002|          Section 3.  [<u>NEW MATERIAL</u>]  SCOPE.--The Title Insurance
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0003|     Guaranty Act applies to all insurers authorized to transact
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0004|     title insurance business in New Mexico.
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0005|          Section 4.  [<u>NEW MATERIAL</u>]  DEFINITIONS.--As used in the
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0006|     Title Insurance Guaranty Act:
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0007|               A.  "account" means an account created by Section 5
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0008|     of the Title Insurance Guaranty Act;
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0009|               B.  "association" means the title insurance guaranty
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0010|     association;
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0011|               C.  "covered claim" means any unpaid claim of an
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0012|     insured in excess of one thousand dollars ($1,000) covered
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0013|     under and not in excess of the applicable limits of a title
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0014|     insurance policy insuring land located in New Mexico issued by
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0015|     an insolvent insurer, if the insurer is found insolvent
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0016|     pursuant to Paragraph (2) of Subsection D of this section after
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0017|     the effective date of the Title Insurance Guaranty Act. 
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0018|     Subject to applicable policy limits, the association's
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0019|     liability for covered claims shall not exceed two hundred fifty
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0020|     thousand dollars ($250,000) per claim and does not include any
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0021|     amount in excess of two hundred fifty thousand dollars
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0022|     ($250,000) per claim.  The total amount that may be recovered
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0023|     from the association by any one claimant for all covered claims
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0024|     shall not exceed five hundred thousand dollars ($500,000). 
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0025|     "Covered claim" does not include any amount due by or for the
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0001|     benefit of any reinsurer, insurer, insurance pool or
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0002|     underwriting association, as subrogation recoveries or
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0003|     otherwise; provided, that any such claim asserted against a
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0004|     person insured by an insolvent insurer that, if it were not a
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0005|     claim by or for the benefit of a reinsurer, insurer, insurance
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0006|     pool or underwriting association, would be a covered claim, may
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0007|     be filed directly with the receiver of the insolvent insurer. 
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0008|     In no event may any such claim be asserted in any legal or
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0009|     administrative action against the insolvent insurer's insured
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0010|     unless that claim is based on the insured's fraud.  "Covered
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0011|     claim" does not include the amount of any claim that an insured
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0012|     recovers from any person, including an agent, regardless of
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0013|     whether an assignment is taken.  "Covered claim" does not
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0014|     include supplementary payment obligations, including but not
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0015|     limited to adjustment fees and expenses, attorney's fees and
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0016|     expenses and court costs, nor does it include punitive,
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0017|     exemplary, extracontractual or bad-faith damages awarded by a
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0018|     court judgment against an insurer;
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0019|               D.  "insolvent insurer" means an insurer:
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0020|                    (1)  authorized to transact title insurance
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0021|     business in New Mexico at the time the title insurance policy
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0022|     was issued; and
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0023|                    (2)  against which an order of liquidation with
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0024|     a finding of insolvency has been entered after the effective
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0025|     date of the Title Insurance Guaranty Act by a court of
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0001|     competent jurisdiction in the insurer's state of domicile, or
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0002|     in this state, which has not been stayed or been the subject of
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0003|     a writ of supersedeas or other comparable order;
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0004|               E.  "member insurer" means any insurer authorized to
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0005|     transact title insurance business in New Mexico;
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0006|               F.  "net written premiums" means gross premiums
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0007|     written in this state on title insurance policies.  "Net
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0008|     written premiums" does not include premiums on contracts
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0009|     between insurers or reinsurers;
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0010|               G.  "person" means an individual or other legal
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0011|     entity;
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0012|               H.  "superintendent" means the superintendent of
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0013|     insurance; and
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0014|               I.  "title insurance policy" or "policy" means those
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0015|     terms as defined in Section 59A-30-3 NMSA 1978 with respect to
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0016|     policies issued on land located in New Mexico.
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0017|          Section 5.  [<u>NEW MATERIAL</u>]  ORGANIZATION OF
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0018|     ASSOCIATION.--All member insurers shall remain members of the
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0019|     association as a condition of their authority to transact
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0020|     insurance in this state.  The association shall may take the
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0021|     form of any appropriate legal entity under New Mexico law,
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0022|     including a corporation, partnership or unincorporated
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0023|     association, as approved by the superintendent.  For purposes
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0024|     of administration and assessment, the association shall have
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0025|     two separate accounts:
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0001|               A.  the administrative account; and
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0002|               B.  the title guaranty account.
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0003|          Section 6.  [<u>NEW MATERIAL</u>]  BOARD OF DIRECTORS.--
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0004|               A.  The association's board of directors shall
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0005|     consist of not less than five nor more than eleven appointed
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0006|     members serving terms as provided in the association's plan of
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0007|     operation, and the superintendent or his designated
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0008|     representative as an ex-officio member.  Appointed board
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0009|     members shall be selected by member insurers, subject to the
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0010|     superintendent's approval.  A majority of the appointed members
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0011|     shall be employed by member insurers.  Vacancies shall be
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0012|     filled for the remaining term by majority vote of the remaining
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0013|     board members, subject to the superintendent's approval.
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0014|               B.  Board members may be reimbursed from the
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0015|     administrative account for expenses incurred in their
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0016|     capacities as board members.
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0017|          Section 7.  [<u>NEW MATERIAL</u>]  DUTIES AND POWERS OF THE
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0018|     ASSOCIATION.--
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0019|               A.  The association shall:
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0020|                    (1)  be obligated to the extent of covered
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0021|     claims arising from policies of an insolvent insurer issued
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0022|     prior to the finding of insolvency, except that the association
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0023|     shall not be obligated as to policies replaced by another title
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0024|     insurance policy that covers the claim.  In no event shall the
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0025|     association be obligated to a policyholder in an amount in
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0001|     excess of the obligation of the insolvent insurer under the
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0002|     policy;
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0003|                    (2)  be deemed the insolvent insurer to the
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0004|     extent of the insurer's obligation on covered claims and to
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0005|     such extent shall have all rights, duties and obligations of
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0006|     the insurer as if the insurer had not become insolvent;
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0007|     provided that the association shall have no liability for any
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0008|     past claims based on negligence of the insurer or its agents in
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0009|     searching and reporting the condition of any title, on bad
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0010|     faith of the insolvent insurer, on the closing of any
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0011|     transaction or for exemplary or punitive damages;
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0012|                    (3)  pay for the administration and operation
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0013|     of the association from the administrative account, through
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0014|     proceeds received from an annual guaranty fee to be collected
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0015|     in the amounts and manner established by regulation of the
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0016|     superintendent;
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0017|                    (4)  allocate claims payments, loss and
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0018|     adjustment expense and administrative expense to the
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0019|     appropriate accounts and assess member insurers, separately for
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0020|     each account, amounts necessary to pay the association's
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0021|     obligations subsequent to any insolvency.  Assessments shall
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0022|     not be made in any year in which guaranty fee proceeds,
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0023|     together with unencumbered account balances and other assets,
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0024|     will be sufficient to satisfy the association's obligations. 
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0025|     Assessments shall be made against each member insurer in the
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0001|     proportion that the member insurer's net written premiums for
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0002|     the last full calendar year bears to net written premiums of
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0003|     all member insurers for that calendar year.  Each member
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0004|     insurer shall be notified of the assessment not later than
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0005|     thirty days before it is due.  No member insurer may be
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0006|     assessed in any year an amount greater than two percent of that
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0007|     member insurer's net written premiums for the preceding
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0008|     calendar year.  If it appears that the maximum assessment
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0009|     available, together with unencumbered account balances and
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0010|     other assets, will be insufficient in any year to make all
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0011|     necessary payments, the association's obligations shall be paid
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0012|     pro rata and the unpaid portion shall be paid as soon as
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0013|     additional assessment proceeds or other funds become available. 
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0014|     The association may pay claims in any order that it deems
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0015|     reasonable, including payments as claims are received or by
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0016|     groups or categories of claims.  The association may exempt or
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0017|     defer, in whole or in part, the assessment of any member
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0018|     insurer if the assessment would cause the member insurer's
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0019|     financial statement to reflect amounts of capital or surplus
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0020|     less than the minimum amounts required for a certificate of
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0021|     authority in any jurisdiction in which the member insurer is
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0022|     authorized to transact insurance.  Each member insurer acting
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0023|     as a servicing facility may set off against any assessment any
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0024|     authorized payments made on covered claims and expenses
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0025|     incurred in the payment of the claims by such member insurer if
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0001|     they are chargeable to the account for which the assessment is
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0002|     made;
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0003|                    (5)  investigate claims and adjust, compromise,
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0004|     settle and pay covered claims to the extent of the
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0005|     association's obligations, and deny all other claims.  The
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0006|     association may review settlements, releases and judgments to
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0007|     which the insolvent insurer or its insureds are parties to
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0008|     determine the extent to which such settlements, releases and
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0009|     judgments may be properly contested;
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0010|                    (6)  notify such persons as the superintendent
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0011|     may direct pursuant to Section 9 of the Title Insurance
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0012|     Guaranty Act;
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0013|                    (7)  receive, handle, adjust and pay claims
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0014|     through its employees or through one or more insurers or other
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0015|     persons designated as servicing facilities, subject to the
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0016|     superintendent's approval; provided that a member insurer may
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0017|     decline any such designation;
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0018|                    (8)  reimburse each servicing facility for
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0019|     obligations of the association paid by the facility and for
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0020|     reasonable expenses incurred by the facility for handling
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0021|     claims on behalf of the association, and pay other expenses of
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0022|     the association authorized by the Title Insurance Guaranty Act;
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0023|     and
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0024|                    (9)  refund excess funds in any account to
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0025|     member insurers in proportion to the contribution of each
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0001|     member insurer to that account, when the board of directors
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0002|     estimates that the assets in the account will exceed the
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0003|     liabilities for the coming year.
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0004|               B.  The association may:
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0005|                    (1)  employ persons or contract with servicing
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0006|     facilities necessary to handle claims and to perform other
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0007|     association duties;
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0008|                    (2)  borrow funds necessary to effectuate the
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0009|     purposes of the Title Insurance Guaranty Act in accordance with
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0010|     the plan of operation, subject to the superintendent's
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0011|     approval;
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0012|                    (3)  sue or be sued, and intervene in any court
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0013|     or other forum having jurisdiction over an insolvent insurer or
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0014|     its insureds;
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0015|                    (4)  negotiate and enter into contracts
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0016|     necessary to carry out the purposes of the Title Insurance
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0017|     Guaranty Act; and
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0018|                    (5)  perform all other acts necessary or proper
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0019|     to effectuate the purposes of the Title Insurance Guaranty Act.
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0020|          Section 8.  [<u>NEW MATERIAL</u>]  PLAN OF OPERATION.--
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0021|               A.  The association shall submit to the
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0022|     superintendent a plan of operation and any amendments to the
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0023|     plan necessary or suitable to assure the fair, reasonable and
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0024|     equitable administration of the association.  The plan of
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0025|     operation and any amendments shall become effective upon the
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0001|     superintendent's written approval.  If, at any time, the
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0002|     association fails to submit the plan or suitable amendments to
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0003|     the superintendent, he shall, after notice and hearing, adopt
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0004|     necessary or advisable regulations to effectuate the provisions
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0005|     of the Title Insurance Guaranty Act.  The regulations shall
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0006|     continue in force until the superintendent modifies them or
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0007|     they are superseded by a plan or amendments submitted by the
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0008|     association and approved by the superintendent.
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0009|               B.  All member insurers shall comply with the
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0010|     association's plan of operation.
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0011|               C.  The association's plan of operation, among other
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0012|     things, shall establish all procedures for conducting the
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0013|     association's business, for handling its assets, for receiving,
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0014|     handling, adjusting and paying claims, for keeping records and
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0015|     for the conduct of other activities necessary to carry out the
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0016|     association's powers and duties.
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0017|               D.  The association's plan of operation may provide
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0018|     that any of the association's powers and duties, except those
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0019|     specified in Paragraph (3) of Subsection A and Paragraph (2) of
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0020|     Subsection B of Section 7 of the Title Insurance Guaranty Act,
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0021|     be delegated to a corporation, association or other
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0022|     organization that performs or will perform functions similar to
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0023|     those of the association in two or more states.  Such a
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0024|     corporation, association or organization shall be reimbursed as
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0025|     a servicing facility and paid for performing any other
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0001|     function.
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0002|          Section 9.  [<u>NEW MATERIAL</u>]  DUTIES AND POWERS OF
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0003|     SUPERINTENDENT.--
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0004|               A.  The superintendent shall:
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0005|                    (1)  promptly forward to the association a copy
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0006|     of any complaint or petition seeking an order of liquidation
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0007|     with a finding of insolvency against a title insurer;
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0008|                    (2)  notify the association that a title

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0009|     insurer has been found to be an insolvent insurer not later
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0010|     than three days after he receives notice of the finding; and
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0011|                    (3)  upon request of the board of directors,
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0012|     provide the association with a statement of the net written
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0013|     premiums of each member insurer.
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0014|               B.  The superintendent may:
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0015|                    (1)  require that the association or an
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0016|     insolvent insurer's licensed New Mexico agents notify the
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0017|     insurer's New Mexico insureds and any other interested parties
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0018|     of the finding of insolvency and of their rights under the
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0019|     Title Insurance Guaranty Act.  Notification shall be made by
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0020|     mail at the last known address; provided that if sufficient
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0021|     information for notification by mail is not available, notice
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0022|     by publication in one or more newspapers of general circulation
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0023|     in the state shall be sufficient;
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0024|                    (2)  suspend or revoke, after notice and
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0025|     hearing, any member insurer's certificate of authority if the
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0001|     insurer fails to pay any assessment within thirty days after it
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0002|     was due or fails to comply with the association's plan of
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0003|     operation.  In the alternative, the superintendent may impose a
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0004|     civil penalty not to exceed five percent of the unpaid
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0005|     assessment per month; provided that no civil penalty shall be
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0006|     less than one hundred dollars ($100) per month; and
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0007|                    (3)  revoke the designation of any servicing
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0008|     facility if he finds that claims are not being handled
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0009|     satisfactorily.
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0010|          Section 10.  [<u>NEW MATERIAL</u>]  EFFECT OF PAID CLAIMS.--
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0011|               A.  Any person recovering under the Title Insurance
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0012|     Guaranty Act shall be deemed to have assigned his rights and
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0013|     claims under the insolvent insurer's policy to the association
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0014|     to the extent of his recovery from the association.  Every
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0015|     insured seeking the protection of the Title Insurance Guaranty
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0016|     Act shall cooperate with the association to the same extent as
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0017|     required to cooperate with the insurer.  The association shall
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0018|     have no cause of action against an insured for any sums it has
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0019|     paid out except such causes of action as the insurer would have
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0020|     had.  In the case of an insolvent insurer operating on a plan
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0021|     with assessment liability, payments of claims by the
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0022|     association do not operate to reduce the liability of the
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0023|     insured to the receiver, liquidator or statutory successor for
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0024|     unpaid assessments.
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0025|               B.  The court having jurisdiction shall grant claims
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0001|     assigned pursuant to Subsection A of this section and the
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0002|     claims expenses of the association or similar organization in
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0003|     another state the same priority as the claims had before
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0004|     assignment.  The association may make application to the court
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0005|     for reimbursement of such claims and expenses and, upon proper
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0006|     application, the court shall order appropriate disbursement to
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0007|     be made.
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0008|               C.  The association shall, within the time set by
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0009|     the receivership court, file with the receiver or liquidator of
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0010|     the insolvent insurer, statements of paid claims and claims
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0011|     expense and reserves for unpaid claims and claims expense.
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0012|          Section 11.  [<u>NEW MATERIAL</u>]  NONDUPLICATION OF
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0013|     RECOVERY.--Any person having a claim under any other title
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0014|     insurance policy that is not an insolvent insurer's policy,
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0015|     which is also a covered claim, shall first exhaust his rights
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0016|     under such other title insurance policy.  Any amount payable
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0017|     for a covered claim shall be reduced by the amount of any
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0018|     recovery under such other title insurance policy.
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0019|          Section 12.  [<u>NEW MATERIAL</u>]  PREVENTION OF
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0020|     INSOLVENCIES.--          A.  To aid in the detection and
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0021|     prevention of title insurer insolvencies, the association's
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0022|     board of directors may, upon majority vote:
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0023|                    (1)  make recommendations to the superintendent
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0024|     for the detection and prevention of insolvencies; and
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0025|                    (2)  respond to requests by the superintendent
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0001|     to discuss and make recommendations regarding the status of any
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0002|     member insurer whose financial condition may be hazardous to
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0003|     policyholders or the public.  Recommendations pursuant to this
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0004|     paragraph shall not be available for public inspection.
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0005|               B.  The superintendent shall report to the
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0006|     association's board of directors when he has reasonable cause
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0007|     to believe that any title insurer may be insolvent or in a
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0008|     financial condition hazardous to its policyholders or the
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0009|     public.  The report, and any subsequent meetings, activities,
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0010|     recommendations and decisions of the board of directors as
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0011|     required or permitted in this section, shall not be open to the
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0012|     public or available for public inspection.
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0013|               C.  At the conclusion of any domestic title insurer
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0014|     insolvency for which the association was obligated to pay
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0015|     covered claims, the association's board of directors may
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0016|     prepare a report on the history and causes of such insolvency,
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0017|     based on the information available to the association, and
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0018|     submit the report to the superintendent.  The report, and any
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0019|     subsequent meetings, activities, recommendations and decisions
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0020|     of the board of directors as required or permitted in this
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0021|     section, shall not be open to the public or available for
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0022|     public inspection.
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0023|          Section 13.  [<u>NEW MATERIAL</u>]  EXAMINATION OF ASSOCIATION-
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0024|     - FINANCIAL REPORTS.--The association is subject to the
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0025|     superintendent's examination and regulation pursuant to Chapter
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0001|     59A, Article 4 NMSA 1978.  The board of directors shall submit,
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0002|     not later than June 30 each year, a financial report for the
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0003|     preceding calendar year prepared by an independent certified
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0004|     public accountant acceptable to the superintendent.  The
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0005|     financial report shall be in a form approved by the
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0006|     superintendent.
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0007|          Section 14.  [<u>NEW MATERIAL</u>]  APPEALS.--
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0008|               A.  Any insured whose claim is denied in whole or in
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0009|     party by the association may request the receivership court, or
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0010|     the ancillary receivership court in this state, to review the
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0011|     association's decision.  The request for review shall be filed
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0012|     within thirty days after the date of denial.  The receivership
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0013|     court and ancillary receivership court in this state shall have
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0014|     exclusive jurisdiction of all such claims.  The decision of the
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0015|     court shall be binding on both the claimant and the
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0016|     association.
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0017|               B.  Any member insurer may appeal to the
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0018|     superintendent from any action of the association's board of
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0019|     directors by filing a notice of appeal within thirty days after
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0020|     the date of the action appealed from.
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0021|               C.  Any final order of the superintendent pursuant
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0022|     to Subsection B of this section is subject to judicial review
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0023|     by an action in the district court of Santa Fe county to set
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0024|     aside the order as unlawful or not supported by substantial
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0025|     evidence.  If judicial review is not sought within thirty days
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0001|     after the date of the superintendent's order, the order shall
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0002|     be final and not subject to appeal.
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0003|          Section 15.  [<u>NEW MATERIAL</u>]  RECOGNITION OF ASSESSMENT
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0004|     IN RATES.--The title insurance rates and premiums promulgated
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0005|     by the superintendent shall include amounts sufficient to
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0006|     recoup within three years after assessment a sum equal to the
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0007|     amounts paid to the association by the member insurers, less
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0008|     any amounts returned to the member insurers by the association. 
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0009|     Rates shall not be deemed excessive because they contain an
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0010|     amount reasonably calculated to recoup assessments paid by the
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0011|     member insurers.  Rates shall be deemed inadequate if they do
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0012|     not contain such an amount.  The entire amount of any such
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0013|     recoupment shall be passed through to insurers.
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0014|          Section 16.  [<u>NEW MATERIAL</u>]  IMMUNITY--CONFIDENTIALITY.-
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0015|     -         A.  There shall be no liability on the part of, and
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0016|     no cause of action of any nature shall exist against, any
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0017|     member insurer, the association or its agents or employees, the
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0018|     board of directors, any individual director or the
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0019|     superintendent or his representative for any action taken by
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0020|     them in connection with carrying out their powers and duties
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0021|     under the Title Insurance Guaranty Act or failure to prevent
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0022|     any insolvency.  The association or the attorney general shall
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0023|     defend all actions alleging such liability.
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0024|               B.  The meetings, activities, recommendations and
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0025|     decisions of the board of directors pursuant to the Title
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0001|     Insurance Guaranty Act shall not be open to the public or
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0002|     available for public inspection; provided that no
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0003|     representative of a member insurer shall be excluded from any
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0004|     meeting of the board of directors, with the exception of any
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0005|     representative of an insolvent insurer.
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0006|          Section 17.  [<u>NEW MATERIAL</u>]  STAY OF PROCEEDINGS--
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0007|     REOPENING OF DEFAULT JUDGMENTS.--All proceedings in which the
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0008|     insolvent insurer is a party or is obligated to defend a party
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0009|     in any court in New Mexico shall be stayed for not to exceed
    |
0010|     six months from the date of a finding of insolvency to permit
    |
0011|     proper defense by the association of all pending causes of
    |
0012|     action.  As to any covered claims arising from a judgment under
    |
0013|     any decision, verdict or finding resulting from the default of
    |
0014|     the insolvent insurer or its failure to defend an insured, the
    |
0015|     association, either on its own behalf or on behalf of the
    |
0016|     insured, may apply to have the judgment, order, decision,
    |
0017|     verdict or finding set aside by the same court, administrator
    |
0018|     or arbitrator that made it and may defend against the claim on
    |
0019|     its merits.
    |
0020|          Section 18.  [<u>NEW MATERIAL</u>]  TERMINATION--DISTRIBUTION
    |
0021|     OF FUNDS.--
    |
0022|               A.  The superintendent shall by order terminate the
    |
0023|     operation of the association if he finds, after hearing, that
    |
0024|     there is in effect a statutory or voluntary plan that:
    |
0025|                    (1)  is a permanent plan that is adequately
    |
0001|     funded or for which an adequate means of funding is provided;
    |
0002|     and
    |
0003|                    (2)  extends or will extend, to New Mexico
    |
0004|     title insurance policyholders and residents, protection and
    |
0005|     benefits with respect to insolvent insurers not less favorable
    |
0006|     than the protection provided under the Title Insurance Guaranty
    |
0007|     Act.
    |
0008|               B.  If the association's operation is terminated,
    |
0009|     the association, as soon as possible, shall distribute the
    |
0010|     balance of money and assets remaining, after discharge of the
    |
0011|     functions of the association with respect to prior insurer
    |
0012|     insolvencies not covered by another plan, to member insurers
    |
0013|     that are then writing title insurance policies in this state,
    |
0014|     pro rata upon the basis of the aggregate of payments and
    |
0015|     assessments made by the respective insurers during the five
    |
0016|     years next preceding the date of the order.
    |
0017|          Section 19.  Section 59A-30-6 NMSA 1978 (being Laws 1985,
    |
0018|     Chapter 28, Section 6) is amended to read:
    |
0019|          "59A-30-6.  PREMIUMS--AGENCY AGREEMENTS--DUTY TO FIX 
    |
0020|     RATES--EXCEPTION.--
    |
0021|               A.  The superintendent shall promulgate the premium
    |
0022|     rates of title insurers and title insurance agents for title
    |
0023|     insurance policies and the percentage of premium to be retained
    |
0024|     by title insurers under agency agreements, except that premium
    |
0025|     rates for reinsurance as between title insurers shall not be
    |

0001|     promulgated by the superintendent.  No premium <s>[which]</s> <u>that</u>
    |
0002|     has not been promulgated by the superintendent shall be charged
    |
0003|     for any title insurance policy.  The superintendent shall not
    |
0004|     promulgate charges of title insurers and title insurance agents
    |
0005|     other than premium rates for title insurance policies and the
    |
0006|     percentage of premium to be retained by title insurers under
    |
0007|     agency agreements.
    |
0008|               B.  The superintendent shall promulgate additional
    |
0009|     premium rates for searches or examinations of title conducted
    |
0010|     or performed for the purpose of issuance of a title insurance
    |
0011|     policy when the search or examination involves more than one
    |
0012|     chain of title or other unusual complexity.
    |
0013|               C.  Premium rates promulgated by the superintendent
    |
0014|     shall not be excessive, inadequate or unfairly discriminatory
    |
0015|     and shall contain an allowance permitting a profit that is not
    |
0016|     unreasonable in relation to the riskiness of the business of
    |
0017|     title insurance. <u>Premium rates shall include an allowance for
</u>    |
<u></u>0018| <u>    recoupment of assessments made pursuant to the Title Insurance
</u>    |
<u></u>0019| <u>    Guaranty Act.</u>"
    |
0020|          Section 20.  Section 59A-30-11 NMSA 1978 (being Laws 1985,
    |
0021|     Chapter 28, Section 11) is amended to read:
    |
0022|          "59A-30-11.  UNDERWRITING STANDARDS AND RECORD RETENTION.-
    |
0023|     -
    |
0024|               A.  No title insurance policy may be written unless
    |
0025|     the title insurer or its title insurance agent has caused to be
    |
0001|     conducted a reasonable search and examination of the title
    |
0002|     using an abstract plant meeting the requirements of Section
    |
0003|     59A-12-13 NMSA 1978 and has caused to be made a determination
    |
0004|     of insurability of title in accordance with sound underwriting
    |
0005|     practices. <u>The duty to search and examine imposed by this
</u>    |
<u></u>0006| <u>    section is solely for the purpose of enhancing the financial
</u>    |
<u></u>0007| <u>    stability of title insurers for the benefit of insureds under
</u>    |
<u></u>0008| <u>    title insurance policies.  The New Mexico Title Insurance Law
</u>    |
<u></u>0009| <u>    is not intended and should not be construed to create any duty
</u>    |
<u></u>0010| <u>    to search and examine that runs to the benefit of, or to create
</u>    |
<u></u>0011| <u>    any right or cause of action in favor of, any person other than
</u>    |
<u></u>0012| <u>    a title insurer.</u>
    |
0013|               B.  Evidence of the examination of title and
    |
0014|     determination of insurability shall be preserved and retained
    |
0015|     in the files of the title insurer or its title insurance agent
    |
0016|     for a period of not less than fifteen years after the title
    |
0017|     insurance policy has been issued.  Instead of retaining the
    |
0018|     original evidence, the title insurer or title insurance agent
    |
0019|     may in the regular course of business establish a system
    |
0020|     whereby all or part of the evidence is recorded, copied or
    |
0021|     reproduced by any process that accurately and legibly
    |
0022|     reproduces or forms a durable medium for reproducing the
    |
0023|     contents of the original.  This subsection shall not apply to:
    |
0024|                    (1)  a title insurer assuming liability through
    |
0025|     a contract of reinsurance; or
    |
0001|                    (2)  a title insurer acting as coinsurer if one
    |
0002|     of the other coinsuring title insurers has complied with this
    |
0003|     section."
    |
0004|          Section 21.  Section 59A-30-14 NMSA 1978 (being Laws 1985,
    |
0005|     Chapter 28, Section 14) is amended to read:
    |
0006|          "59A-30-14.  OTHER PROVISIONS APPLICABLE.--To the extent
    |
0007|     not in conflict with the New Mexico Title Insurance Law, the
    |
0008|     following articles and provisions of the Insurance Code shall
    |
0009|     also apply to title insurers, title insurance agents and the
    |
0010|     business of title insurance:
    |
0011|     Article 1.  Scope of Code; Initial Definitions; General
    |
0012|     Penalty.
    |
0013|     Article 2.  Department of Insurance.
    |
0014|     Article 3.  State Insurance Board.
    |
0015|     Article 4.  Examinations, Hearings and Appeals.
    |
0016|     Article 5.  Authorization of Insurers and General Requirements.
    |
0017|     Article 6.  Fees and Taxes.
    |
0018|     Article 7.  Kinds of Insurance; Limits of Risk; Reinsurance.
    |
0019|     Article 8.  Assets and Liabilities.
    |
0020|     Article 9.  Investments.
    |
0021|     Article 10.  Administration of Deposits; Trusteed Assets of 
    |
0022|                      Alien Insurer.
    |
0023|     Article 11.  Licensing Procedures, Agents, Solicitors, Brokers,
    |
0024|                 Adjusters and Others.
    |
0025|     Article 12.  Insurance Agents, Brokers and Solicitors.
    |
0001|     Article 15.  Unauthorized Insurers.
    |
0002|     Article 16.  Trade Practices and Frauds.
    |
0003|                <u>Title Insurance Guaranty Act</u>."
    |
0004|                                         
    |
0005|   
    |
0006|                      FORTY-THIRD LEGISLATURE
    |
0007|                        FIRST SESSION, 1997
    |
0008|   
    |
0009|   
    |
0010|                                               February 26, 1997
    |
0011|   
    |
0012|   Mr. President:
    |
0013|   
    |
0014|       Your CORPORATIONS & TRANSPORTATION COMMITTEE, to
    |
0015|   whom has been referred
    |
0016|   
    |
0017|                          SENATE BILL 972
    |
0018|   
    |
0019|   has had it under consideration and reports same with
    |
0020|   recommendation that it DO PASS.
    |
0021|   
    |
0022|                                Respectfully submitted,
    |
0023|   
    |
0024|   
    |
0025|   
    |
0001|                                
    |
0002|   __________________________________
    |
0003|                                Roman M. Maes, III, Chairman 
    |
0004|   
    |
0005|   
    |
0006|   
    |
0007|   Adopted_______________________   Not
    |
0008|   Adopted_______________________
    |
0009|             (Chief Clerk)                          (Chief Clerk)
    |
0010|   
    |
0011|   
    |
0012|   
    |
0013|                     Date ________________________
    |
0014|   
    |
0015|   
    |
0016|   The roll call vote was <u> 7 </u> For <u> 0 </u> Against
    |
0017|           Yes:    7
    |
0018|           No:     0
    |
0019|                Excused:     Fidel, Kidd, Robinson
    |
0020|           Absent: None
    |
0021|   
    |
0022|   
    |
0023|   S0972CT1
    |
0024|                        FORTY-THIRD LEGISLATURE
    |
0025|                           FIRST SESSION
    |
0001|   
    |
0002|   
    |
0003|                                               February 28, 1997
    |
0004|   
    |
0005|   
    |
0006|   SENATE FLOOR AMENDMENT number _______ to
    |
0007|           SENATE BILL 972
    |
0008|   
    |
0009|   Amendment sponsored by Senator Manny M. Aragon 
    |
0010|   
    |
0011|       1.  On page 4, line 20, strike "shall".
    |
0012|   
    |
0013|       2.  On page 5, line 15, after "for" insert "any reasonable
    |
0014|   and necessary".
    |
0015|   
    |
0016|       3.  On page 5, line 16, after "members" insert ", but the
    |
0017|   amount of such reimbursement shall not exceed guidelines provided
    |
0018|   by the approved plan of operation".
    |
0019|   
    |
0020|       4.  On page 14, line 7, strike "section" and insert in lieu
    |
0021|   thereof "subsection".
    |
0022|   
    |
0023|       5.  On page 15, line 4, strike "party" and insert in lieu
    |
0024|   thereof "part".
    |
0025|   
    |
0001|       6.  On page 16, lines 5 and 6, strike "Rates shall be deemed
    |
0002|   inadequate if they do not contain such an amount.".
    |
0003|   
    |
0004|       7.  On page 16, line 16, strike "or the attorney general".
    |
0005|   
    |
0006|       8.  On page 16, line 17, after "liability" insert "except
    |
0007|   that the attorney general shall defend any such actions against
    |
0008|   the superintendent or his representatives".
    |
0009|   
    |
0010|       9.  On page 17, line 2, strike "defend" and insert in lieu
    |
0011|   thereof "represent".
    |
0012|   
    |
0013|       10.  On page 17, line 5, strike "defense" and insert in lieu
    |
0014|   thereof "representation".
    |
0015|   
    |
0016|       11.  On page 21, between lines 18 and 19, insert: 
    |
0017|   
    |
0018|   "Article 34.  Domestic and Mutual Insurers.
    |
0019|   
    |
0020|    Article 37.  Insurance Holding Companies.".
    |
0021|   
    |
0022|   
    |
0023|   
    |
0024|       
    |
0025|   
    |
0001|   
    |
0002|   
    |
0003|   
    |
0004|   
    |
0005|   
    |
0006|                                       __________________________
    |
0007|                                       
    |
0008|   
    |
0009|   
    |
0010|   
    |
0011|   Adopted ___________________   Not Adopted _______________________
    |
0012|            (Chief Clerk)                    (Chief Clerk)
    |
0013|   
    |
0014|   
    |
0015|                    Date _________________
    |
0016|   
    |
0017|                          State of New Mexico
    |
0018|                      House of Representatives
    |
0019|   
    |
0020|                      FORTY-THIRD LEGISLATURE
    |
0021|                        FIRST SESSION, 1997
    |
0022|   
    |
0023|   
    |
0024|                                                  March 15, 1997
    |
0025|   
    |
0001|   
    |
0002|   Mr. Speaker:
    |
0003|   
    |
0004|       Your JUDICIARY COMMITTEE, to whom has been referred
    |
0005|   
    |
0006|                 SENATE BILL 972, as amended
    |
0007|                               
    |
0008|   has had it under consideration and reports same with
    |
0009|   recommendation that it DO PASS.
    |
0010|   
    |
0011|                            Respectfully submitted,
    |
0012|   
    |
0013|   
    |
0014|   
    |
0015|                            <u>                                 
</u>    |
<u></u>0016| <u>                           </u>                        Thomas P. Foy, Chairman
    |
0017|   
    |
0018|   
    |
0019|   Adopted <u>                    </u>   Not Adopted <u>                     
</u>    |
<u></u>0020| <u>  </u>
    |
0021|           (Chief Clerk)               
    |
0022|        (Chief Clerk)
    |
0023|   
    |
0024|                        Date <u>            </u>
    |
0025|   
    |
0001|   The roll call vote was<u> 8 </u> For<u> 1 </u> Against
    |
0002|   Yes:         8
    |
0003|   No:     King
    |
0004|                Excused:     M.P. Garcia, Luna, Rios, Sanchez
    |
0005|           Absent: None
    |
0006|   
    |
0007|   
    |
0008|   G:\BILLTEXT\BILLW_97\S0972
    |