Nm Property Insurance Pgm. Assoc. Board
With the introduction of this bill, state laws surrounding property insurance will undergo significant changes. One of the key components of SB81 is the establishment of a fee structure that allows the board to collect fees from member insurers to sustain the solvency of the program. Insurers assessed with these fees may pass them onto policyholders as surcharges over a period of three years, but cannot raise premiums based solely on these assessments. This measure is aimed at creating a stable financial framework necessary for the successful operation of the FAIR plan, thereby benefiting those who are unable to secure property insurance through traditional means.
Senate Bill 81 aims to create the New Mexico Property Insurance Program Association Board to oversee the administration of the FAIR Plan Act. This initiative is designed to ensure that property and commercial property insurance is available to individuals who are unable to obtain it through regular market channels. The legislation sets forth new policy requirements and defines various essential terms related to property insurance, including the roles of member insurers and the structure of the governing board. The board will be responsible for maintaining the integrity and functionality of the FAIR plan, as well as setting guidelines for the insurance provided under this program.
Notable points of contention surrounding SB81 include concerns regarding the effectiveness of the FAIR Plan in ensuring equitable access to insurance. Critics may argue that the imposition of fees on insurers could lead to increased costs for policyholders, particularly those already struggling to find affordable insurance options. Additionally, the requirement for insurers to prove at least three declinations of coverage before applying to the FAIR plan raises questions about the stringent prerequisites being placed on individuals seeking coverage. There may also be differing opinions on the composition and governance of the newly formed board, with some stakeholders potentially advocating for more consumer representation.