SB 221
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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 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
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 SB 221
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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 the insured was entitled by reference to written or
printed advertising material accompanying or made part of an
application;
I. attempting to settle claims on the basis of an
application that was altered without notice to, or knowledge
or consent of, the insured 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; SB 221
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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;
O. violating a provision of the Domestic Abuse
Insurance Protection Act; or
P. treating 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 SB 221
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deceptive practices on the part of the insured.”