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SENATE BILL 221
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Pat Woods and Gabriel Ramos
AN ACT
RELATING TO INSURANCE; AMENDING THE NEW MEXICO INSURANCE CODE
TO DEFINE AND PROHIBIT AN ADDITIONAL UNFAIR CLAIMS PRACTICE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 59A-16-20 NMSA 1978 (being Laws 1984,
Chapter 127, Section 286, as amended) is amended to read:
"59A-16-20. UNFAIR CLAIMS PRACTICES DEFINED AND
PROHIBITED.--Any [and all ] of the following practices with
respect to claims, by an insurer or other person, knowingly
committed or performed with such frequency as to indicate a
general business practice are defined as unfair and deceptive
practices and are prohibited:
A. misrepresenting to insureds pertinent facts or
policy provisions relating to coverages at issue;
B. failing to acknowledge and act reasonably
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promptly upon communications with respect to claims from
insureds arising under policies;
C. failing to adopt and implement reasonable
standards for the prompt investigation and processing of
insureds' claims arising under policies;
D. failing to affirm or deny coverage of claims of
insureds within a reasonable time after proof of loss
requirements under the policy have been completed and submitted
by the insured;
E. not attempting in good faith to effectuate
prompt, fair and equitable settlements of an insured's claims
in which liability has become reasonably clear;
F. failing to settle all catastrophic claims within
a ninety-day period after the assignment of a catastrophic
claim number when a catastrophic loss has been declared;
G. compelling insureds to institute litigation to
recover amounts due under policy by offering substantially less
than the amounts ultimately recovered in actions brought by
such insureds when such insureds have made claims for amounts
reasonably similar to amounts ultimately recovered;
H. attempting to settle a claim by an insured for
less than the amount to which a reasonable person would have
believed [he] the insured was entitled by reference to written
or printed advertising material accompanying or made part of an
application;
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I. attempting to settle claims on the basis of an
application that was altered without notice to, or knowledge or
consent of, the insured [his ] or the insured's representative,
agent or broker;
J. failing, after payment of a claim, to inform
insureds or beneficiaries, upon request by them, of the
coverage under which payment has been made;
K. making known to insureds or claimants a practice
of insurer of appealing from arbitration awards in favor of
insureds or claimants for the purpose of compelling them to
accept settlements or compromises less than the amount awarded
in arbitration;
L. delaying the investigation or payment of claims
by requiring an insured, a claimant or the physician of either
to submit a preliminary claim report and then requiring the
subsequent submission of formal proof of loss forms, both of
which submissions contain substantially the same information;
M. failing to settle an insured's claims promptly
where liability has become apparent under one portion of the
policy coverage in order to influence settlement under other
portions of the policy coverage;
N. failing to promptly provide an insured a
reasonable explanation of the basis relied on in the policy in
relation to the facts or applicable law for denial of a claim
or for the offer of a compromise settlement; [or ]
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O. violating a provision of the Domestic Abuse
Insurance Protection Act; or
P. considering an insured's inquiry relating to
damage or loss as a claim when the facts of the inquiry are not
covered in the policy, the insurer makes no payment to or on
behalf of the insured and the claim does not involve deceptive
practices on the part of the insured ."
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