N.M. Stat. § 59A-14-2

Current through 2024, ch. 69

Section 59A-14-2 - Definitions

As used in Chapter 59A, Article 14 NMSA 1978:

A. "affiliate" means, with respect to an insured, any entity that controls, is controlled by or is under common control with the insured;

B. "affiliated group" means any group of entities that are all affiliated;

C. "association" means the national association of insurance commissioners or any successor entity;

D. "authorized insurer" means, with respect to New Mexico, an insurer holding a valid and subsisting certificate of authority, issued by the superintendent, to transact insurance in New Mexico;

E. "control" means that an entity:

(1) directly or indirectly or acting through one or more other persons owns, controls or has the power to vote twenty-five percent or more of any class of voting securities of another entity; or

(2) controls in any manner the election of a majority of the directors or trustees of another entity;

F. "eligible surplus lines insurer" means a qualified nonadmitted insurer with which a surplus lines broker may place surplus lines insurance pursuant to Section 59A-14-4 NMSA 1978;

G. "exempt commercial purchaser" means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:

(1) the person employs or retains a qualified risk manager to negotiate insurance coverage;

(2) the person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars ($100,000) in the immediately preceding twelve months; and

(3) the person:

(a) possesses a net worth in excess of twenty million dollars ($20,000,000), provided that this amount shall be adjusted every five years by rule of the superintendent to account for the percentage change in the consumer price index;

(b) generates annual revenues in excess of fifty million dollars ($50,000,000), provided that this amount shall be adjusted every five years by rule of the superintendent to account for the percentage change in the consumer price index;

(c) employs more than five hundred full-time or full-time-equivalent employees per insured entity or is a member of an affiliated group employing more than one thousand employees in the aggregate;

(d) is a not-for-profit organization or public entity generating annual budgeted expenditures of at least thirty million dollars ($30,000,000), provided that this amount shall be adjusted every five years by rule of the superintendent to account for the percentage change in the consumer price index; or

(e) is a municipality with a population in excess of fifty thousand persons;

H. "export" means to place insurance with a nonadmitted insurer;

I. "home state" means, with respect to an insured:

(1) the state:

(a) in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or

(b) to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated, if one hundred percent of the insured risk is located out of the state referred to in Subparagraph (a) of this paragraph; or

(2) if more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, "home state" means the home state, as determined pursuant to Paragraph (1) of this subsection, of the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract;

J. "independently procured insurance" means insurance procured directly by an insured from a nonadmitted insurer;

K. "nonadmitted insurance" means any property and casualty insurance permitted to be placed through a surplus lines broker with an eligible surplus lines insurer;

L. "nonadmitted insurer" means an insurer not licensed to engage in the business of insurance in New Mexico but does not include a risk retention group, as "risk retention group" is defined in the federal Liability Risk Retention Act of 1986;

M. "premium tax" means, with respect to surplus lines, any tax, fee, assessment or other charge imposed by a government entity directly or indirectly based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees and any other compensation given in consideration for a contract of insurance;

N. "principal place of business" means, with respect to determining the home state of the insured, the state where the insured maintains its headquarters and where the insured's high-level officers direct, control and coordinate the business activities of the insured;

O. "producing broker" means the broker or agent dealing directly with the person seeking insurance if the home state of the person seeking insurance is New Mexico;

P. "professional designation" means:

(1) a designation as a chartered property and casualty underwriter issued by the American institute for chartered property and casualty underwriters;

(2) a designation as an associate in risk management issued by the insurance institute of America;

(3) a designation as a certified risk manager issued by the national alliance for insurance education and research;

(4) a designation as a RIMS fellow issued by the global risk management institute; or

(5) any other designation, certification or license determined by the superintendent to demonstrate minimum competency in risk management;

Q. "qualified risk manager" means, with respect to an exempt commercial purchaser, a person who:

(1) is an employee of, or a third-party consultant retained by, the exempt commercial purchaser;

(2) provides skilled services in loss prevention, loss reduction, risk and insurance coverage analysis and purchase of insurance; and

(3) has:

(a) a bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics or any other field determined by the superintendent to demonstrate minimum competence in risk management and either:

1) three years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis or purchase of commercial lines of insurance; or

2) a professional designation;

(b) a professional designation and at least seven years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis or purchase of commercial lines of insurance;

(c) at least ten years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis or purchase of commercial lines of insurance; or

(d) a graduate degree from an accredited college or university in risk management, business administration, finance, economics or any other field determined by the superintendent to demonstrate minimum competence in risk management;

R. "reinsurance" means the assumption by an insurer of all or part of a risk undertaken originally by another insurer;

S. "surplus lines broker" means an individual, firm or corporation licensed under Chapter 59A, Article 14 NMSA 1978 to place insurance with eligible surplus lines insurers;

T. "surplus lines insurance" means any insurance permitted to be exported through a surplus lines broker in accordance with the provisions of Chapter 59A, Article 14 NMSA 1978;

U. "type of insurance" means one of the types of insurance required to be reported in the annual statement that must be filed with the superintendent by authorized insurers; and

V. "unauthorized insurer" means a nonadmitted insurer.

NMS § 59A-14-2

1978 Comp., § 59A-14-2, enacted by Laws 1991, ch. 125, § 12; 2011, ch. 156, § 5; 2017, ch. 130, § 7.

Amended by 2017, c. 130,s. 7, eff. 7/1/2017.

Amended by 2011, c. 156,s. 5, eff. 7/21/2011.