NEW MEXICO
Legislation:
February 28, 2017 - NAPSLO testimony on SB 367 which replaces broker affidavits with signed statements and eliminates SLIMPACT authorization.
SB 250 NOTE: SB 250 is effective July 21, 2011.
Bulletins/Regulations/Rules:
May 15, 2014 - Bulletin 2014-08 - Surplus Lines Premium Tax Filings
Compact, NIMA, other: SLIMPACT
Home State Definition: New Mexico is the insured's Home State if the insured maintains its principal place of
business here or, in the case of an individual, if the individual's
principal residence is here. If New Mexico is considered the insured's
Home State, only New Mexico's requirements regarding the placement of
such business will apply. If 100% of the insured risk is located outside
of New Mexico, then the insured's Home State is the state to which the
greatest percentage of the insured's taxable premium for that insurance
contract is allocated. If more than one insured from an affiliate group
are named insureds on a single nonadmitted insurance placement, New
Mexico will be considered the Home
State for that placement if New Mexico is the Home State of the member
of the affiliated group that has the largest percentage of premium
attributed to it under such insurance contract. For an affiliated group
of insured entities, the “Home State” is the principal place of business
of the group member to which the largest percentage of premium is
allocated.
The term affiliated group means any group of entities that are
affiliated. An affiliate means (a) with respect to an insured, any
entity that controls, is controlled by, or is under common control with
the insured. An entity has control over another entity if the entity:
(i) directly or indirectly or acting through one or more other person
owns, controls or has the power to vote twenty –five percent or more of
any class of voting securities of the other entity; or (ii) controls in
any manner the election of a majority of the directors of trustees of
the other entity.
SB 250 goes further to define "Principal Place of
Business" as where the insured maintains its headquarters and where the
insured’s high-level officers direct, control and coordinate the
business activities of the insured. This definition is not a standard
NRRA definition.
Exempt Commercial Purchaser: Surplus
lines brokers seeking to procure or place nonadmitted insurance on
behalf of an “exempt commercial purchaser” are not required to perform a
diligent search if: 1) the broker has disclosed to the exempt
commercial purchaser that insurance may or may not be available from the
admitted market that may provide greater protection with more
regulatory oversight; and 2) the exempt commercial purchaser has
subsequently requested in writing for the broker to procure or place
such insurance from a nonadmitted insurer.
“Exempt Commercial Purchaser” and “Qualified Risk Manager” are defined
in SB 250.
NOTE: The following New Mexico law was not amended by SB 250:
59A-15-2. Representing or aiding unauthorized insurer prohibited.
A. No person shall in this state directly or indirectly act as agent
for, or otherwise represent or aid on behalf of another, any
unauthorized insurer in solicitation, negotiation, procurement or
effectuation of insurance or renewals thereof, or forwarding of
applications, or delivery of policies or contracts, or inspection of
risks, or fixing of rates, or investigation or adjustment of claims or
losses, or collection or forwarding of premiums, or in any other manner
represent or assist such insurer in transaction of insurance in this
state.
B. This section shall not apply as to:…
(5) a transaction or transactions in this state involving contracts of insurance to one or
more industrial insureds. For the purposes of this section, an industrial insured is an insured:
(a) which procures the insurance of any risk by the use of the services of a full-time
employee acting as a risk manager or insurance manager or by utilizing the services of a
regularly and continuously qualified insurance consultant;
(b) which has aggregate annual premiums for insurance on all risks of at least
twenty-five thousand dollars ($25,000); and…
Eligibility:
SB 250 allows the compact to adopt uniform eligibility requirements.
Until that time, under the terms of the NRRA, brokers are permitted to
place nonadmitted insurance with U.S. domestic insurers that are
eligible in New Mexico provided they are authorized to write such
business in their State of Domicile and maintain minimum capital and
surplus of $15 million or the minimum capital and surplus amount
required in New Mexico, whichever is greater. NRRA allows brokers to
place business with non-U.S. carriers that are included on the NAIC’s
Quarterly Listing of Alien
Insurers. New Mexico also has other criteria under which an insurer may
be determined to be eligible.
Tax Reporting Status:
SB 250: SECTION 9. Section 59A-14-12 NMSA 1978 (being Laws 1984, Chapter 127, Section 250, as amended) is amended to read:
"59A-14-12. PREMIUM TAX ON SURPLUS LINES INSURANCE.--
A. Within sixty days after expiration of a calendar quarter, the
surplus lines broker shall pay to the superintendent for the use of the
state a tax on gross premiums received, less returned premiums, on
surplus lines business where New Mexico is the home state of the insured
transacted under the surplus lines broker's license during such
calendar quarter as shown by the quarterly statement filed with the
superintendent pursuant to Section 59A-14-11 NMSA 1978. The tax shall be
at the same rate as is applicable to premiums of authorized insurers
under Section 59A-6-2 NMSA 1978. (…B.
Each such taxpayer shall pay in accordance with this subsection a
premium tax of three and three-thousandths percent of the gross premiums
and membership and policy fees received or written by it, as reported
in Schedule T and supporting schedules of its annual financial statement
on insurance or contracts covering risks within this state during the
preceding calendar year, less all return premiums, including dividends
paid or credited to policyholders or contract holders and premiums received for reinsurance on New Mexico risks.)
B. For purposes of this section, "premiums" shall include any
additional amount charged the insured, including policy fees, risk
purchasing group fees and inspection fees; but "premiums" shall not
include any additional amount charged the insured for local, state or
federal tax; regulatory authority fee; or examination fee, if any.
C. The superintendent may require surplus lines brokers and insureds
who have independently procured insurance to file tax allocation reports
annually detailing the portion of the nonadmitted insurance policy
premiums attributable to properties, risks or exposures located in each
state.
D. A penalty of ten percent of the amount of tax originally due, plus
one percent of such tax amount for each month or fraction thereof of
delinquency after the first thirty days of delinquency, shall be paid by
the surplus lines broker for failure to pay the tax in full within
sixty days after expiration of the calendar quarter as provided in
Subsection A of this section; except that the superintendent may waive
or remit the penalty if the superintendent finds that the failure or
delay in payment arose from excusable mistake or excusable
inadvertence."
Tax Processing Fee: The commission shall collect a
fee, payable by the insured directly or through a surplus lines
licensee, on each transaction processed through the compact
clearinghouse, to cover the cost of the operations and activities of the
commission and the commission's staff.
Policyholder Notice: No change, however, the
commission may adopt mandatory rules establishing foreign insurer
eligibility requirements and a concise and objective policyholder
notice.
Department Contact: New Mexico Office of the Superintendent of Insurance
Office of the Superintendent of Insurance
4th Floor
1120 Paseo De Peralta
Santa Fe, NM 87504
Phone: 1.855.4ASK.OSI
(1.855.427.5674)
New Mexico Approves SLIMPACT-lite Measure
April 8, 2011 - New Mexico Governor signs SB0250 which would
adopt SLIMPACT-lite. A Compact Commission would adopt rules on tax
allocation, reporting, collection and distribution, and may also adopt
uniform insurer eligibility requirements. The bill provides for
exclusive home state regulation of surplus lines compliance pursuant to
the compact, but does not incorporate the NRRA's ECP exemption from
state diligent search requirements.