N.M. Stat. § 59A-16-14 — NM Code / Chapter 59A / Article 16 / Section 59A-16-14
§ 59A-16-14. Coercion of business prohibited; notice required; charges prohibited
Status: in_force

A. No person engaged in selling real or personal property or in the business of financing the purchase of real or personal property, or of lending money on the security of real or personal property, and no trustee, director, officer, agent or other employee of the person shall require, as a condition precedent, concurrent or subsequent to the sale, or financing the purchase of property, or to lending money upon the security of a mortgage on the property, or as a condition precedent, concurrent or subsequent, for the renewal or extension of the loan or mortgage or for the performance of any other act in connection therewith, that the person purchasing the property, or for whom the purchase is to be financed, or to whom the money is to be loaned, or for whom the extension, 1 renewal or other act is to be granted, or performed, negotiate a policy of insurance or renewal covering the property through a particular insurer or insurance producer. The lender is required to inform the buyer of the buyer's rights regarding the placing of insurance on a form prescribed by the superintendent. The buyer must signify that the buyer has been so informed. This section shall not prevent the exercise by a person of the right to designate the terms and provisions of the policy and the amount of coverage with respect to insurance on property pledged or mortgaged to the person.

B. An insured shall have the option, in addition to the rights granted under the terms and conditions of the insurance contract, at any time to substitute, replace, change or extend the existent policy in force. For the purpose of this section “ anniversary date ” means the yearly return of the inception of the effective date of policy in force.

C. If the lender signifies that the proposed insurance is acceptable, the buyer must supply the lender with the policy or binder prior to the closing of the loan.

D. If the policy is cancelled by the insurer, the borrower must have a new policy in the hands of the lender twenty-four hours prior to the effective day of the cancellation.

E. The borrower or the borrower's insurance producer must deliver a renewal policy or an annual renewal certificate to the lender at least fifteen days prior to expiration or renewal of the policy in force if required by the lender.

F. When the insured wants to change insurance producers, the insurance producer writing the renewal business must file with the lender a current letter of authority signed by the borrower. If a change of insurance producers is involved in the renewal of the policy, the lender shall notify the insurance producer renewing the insurance and the borrower in writing within five business days after tender of renewal policy, if the renewal policy is not acceptable to the lender.

G. No person engaged in selling real or personal property or in the business of financing the purchase of real or personal property or of lending money on the security of real or personal property shall charge, either directly or indirectly to a borrower or debtor a consideration of any kind to substitute the insurance policy of one insurer of the property for that of another, or make a charge for a change in the kind, type or amount of the insurance if the change is made at the time the borrower or debtor first becomes a party to the transaction for which the insurance is required, or at an annual renewal date of the policy.

H. No person engaged in the business of selling real or personal property or financing purchase or lending money on security of real or personal property shall share information received in connection with an application for credit in the purchase or for the loan with any parent corporation, subsidiary or affiliate of the person or with an insurer, for the purpose of soliciting insurance, unless the person has written authorization to release the information executed by the purchaser or borrower subsequent to extension of credit or making of the loan.

I. In addition to other penalties provided in Section 59A-1-18 NMSA 1978 , a lender who violates this section shall be liable in a civil action brought by a buyer, insured or insurance producer injured by the violation, or each of them, for an amount of liquidated damages equal to the amount of actual damages as a result of coercion prohibited by this section.