Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Vincen
t
LAST UPDATED
ORIGINAL DATE 3/11/2025
SHORT TITLE Lincoln County Homeowner Relief
BILL
NUMBER
House Memorial
55
ANALYST Rodriguez
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
No fiscal
impact
No fiscal
impact
No fiscal
impact
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill 81
Sources of Information
LFC Files
Agency Analysis Received From
Office of Superintendent of Insurance
SUMMARY
Synopsis of House Memorial 55
House Memorial 55 (HM55) sets forth that the New Mexico House of Representatives supports
the New Mexico Property Insurance Program’s decision to increase coverage limits for
residential properties and urges the Office of Superintendent of Insurance (OSI) to approve the
proposed changes. The memorial recognizes that the proposed changes will provide relief to
homeowners in Lincoln County and allow them to secure policy to begin rebuilding homes.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
HM55 contains no appropriation and has no known fiscal impact.
SIGNIFICANT ISSUES
New Mexico FAIR Plan. The New Mexico Property Insurance Program is the underwriting
association of the New Mexico Fair Access to Insurance Requirements (FAIR) plan. The New
Mexico FAIR Plan Act, contained in Article 59A-29 NMSA 1978 of the New Mexico Insurance House Memorial 55 – Page 2
Code, was enacted by the Legislature to provide essential property insurance to responsible and
qualified applicants in New Mexico who are unable to secure such insurance in the normal
market, acting essentially as the provider of last resort and providing minimal coverage. Unlike
normal coverage, the plan only covers actual cash value, or the depreciated value of the property.
However, certain lenders, like Fannie Mae, do accept this plan as creditable coverage to meet
mortgage requirements.
Currently under the FAIR Plan Act, all insurers licensed to write essential property insurance are
required to establish and maintain the FAIR plan and an underwriting association. The
underwriting association is responsible for assessing and sharing all expenses, income, and losses
of the FAIR plan—meaning the financial burden of providing insurance to high-risk individuals
is distributed among all participating insurers rather than being shouldered by one company. The
governing committee determines premiums and are filed with OSI for approval.
Assessments. If the plan’s reserves are inadequate to pay claims, the governing committee can
issue an assessment on insurance companies. Each insurance company’s assessment is based on
the company’s market share. Companies can pass the amount of the assessment onto policy
holders by issuing temporary surcharges that can be paid over the following three years. In 2024,
the governing committee issued an assessment due to an increase in losses due to wind and hail
damage and fires. Increases to coverage limits correlate with additional exposure to the plan,
which could lead to possible losses that might need to be covered by an assessment on insurance
companies.
Recent Increases to Coverage Limits. In 2023, the governing committee increased the
maximum limit of liability for residential homes from $250 thousand to $350 thousand. The
existing maximum limit of liability for commercial properties is $1 million.
As noted in HM55, in February 2025, the governing committee proposed increasing limits for
residential properties to $750 thousand. In March 2025, the superintendent provided provisional
approval for the increase which would expire on June 20, 2025. OSI notes that the provisional
approval was due to Senate Bill 81, which, if enacted, would go into effect June 20, 2025. As of
March 12, the governing committee responded that the provisional approval was insufficient, and
the committee could not move forward with the proposed changes.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
HM55 relates with Senate Bill 81. If passed, SB81 would change the governing structure of the
New Mexico property insurance program and would put into statute maximum coverage limits.
JR/SL2/hj