Industry Reports Productive Short Session in New Mexico, Defeats Several Pieces of Legislation

March 4, 2004

The New Mexico legislature’s regular 30-day session adjourned last month with reported progress.

Although the New Mexico Constitution largely limits the scope of 30-day sessions to fiscal matters, the governor can ask legislators to consider additional issues. This year, Governor Richardson asked the legislature to consider a record number of non-fiscal matters, including several pertaining directly to insurance, according to the American Insurance Association (AIA).

“Thanks to a lot of hard work and strategic thinking, the insurance industry had a very successful legislative session,” said Fred Bosse, vice president of the Southwest Region of the AIA. “We were able to pass some significant reforms and defeat several pieces of onerous legislation.”

Of great significance, HB 240 – which was passed and signed by the governor on Feb. 19 – created an Insurance Operations Fund with annual appropriations from the fund for the Insurance Division. The fund is to receive quarterly transfers from the Insurance Department Suspense Fund of fees collected for insurers’ certificate of authority and agent licensing and appointments. This does not apply to fees derived from property and vehicle insurance business, which will continue to flow to the Fire Protection Fund.

The broader business community, including insurers, also pulled together to fight several controversial bills, including:

• HB 320 – Ruiz (D), a bill making employers liable for virtually all asbestosis and silicosis claims for employees or their dependents back to 1945, the original date of passage of the Occupational Disease Disablement Law. This bill died in the Senate Judiciary Committee.

• SB 592 – Sanchez (D), a substitute bill calling for a ban on credit-based insurance scoring in rating and underwriting for both homeowners and auto insurance. This bill died in the Senate Judiciary Committee.

• SB 416 – Aragon (D), a bill limiting awards of public contracts and subcontracts for professional services to only U.S. citizens and others authorized to work in the U.S. This bill was defeated on the Senate floor by a vote of 14 to 19.

“The defeat of these onerous bills helps to preserve New Mexico’s competitive insurance market, which encourages insurers to continue doing business in the state,” said Bosse. “Enactment of these bills would have had a severe, negative effect on an insurer’s ability to accurately price and offer its products.”

The governor has until March 10, 2004, to review and sign or veto legislation passed; legislation not acted upon by the governor by that date is pocket-vetoed. May 19, 2004, is the effective date of legislation not carrying an emergency clause or other specified date. In the event legislation carried an emergency clause and was passed by two-thirds vote of each house, the legislation becomes effective immediately upon signing by the governor.

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