2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 14 - Surplus Line Insurance › Section 59A-14-1 - Scope of article; purpose; necessity for regulation.

A. Chapter 59A, Article 14 NMSA 1978 governs the placing of insurance where New Mexico is the home state of the insured, through licensed surplus lines brokers, in insurers not otherwise authorized to transact insurance in this state and subject to the conditions for such placing as stated in that article; qualifications, licensing and duties and responsibilities of surplus lines brokers; and other provisions as to such surplus lines business and brokers. As to unauthorized insurers in general, and in respects other than as to surplus lines, refer to Chapter 59A, Article 15 NMSA 1978.
B. Chapter 59A, Article 14 NMSA 1978 shall not apply as to reinsurance or to the following insurances:
(1) any insurance where New Mexico is not the home state of the insured;
(2) wet marine and transportation insurance, as defined in Section 59A-7-5 NMSA 1978 [repealed];
(3) insurance on vehicles or aircraft owned and principally garaged outside this state;
(4) insurance of property and operations of railroads engaged in interstate commerce;
(5) insurance of aircraft of common carriers, or cargo of such aircraft, or against liability, other than employer's liability, arising out of ownership, maintenance or use of such aircraft;
(6) insurance of automobile bodily injury and property damage liability risks when written in Mexican insurers and covering in Mexico and not in the United States; or
(7) insurance independently procured.
C. Chapter 59A, Article 14 NMSA 1978 shall be liberally construed and applied to promote its underlying purposes, which include:
(1) protecting insureds and persons seeking insurance in this state;
(2) permitting surplus lines insurance to be placed with reputable and financially sound unauthorized insurers, but only pursuant to Chapter 59A, Article 14 NMSA 1978;
(3) establishing a system of regulation that will permit controlled access to surplus lines insurance in this state; and
(4) assuring collection of revenues and other amounts due to this state.
History:
Laws 1984, ch. 127, § 239; 1991, ch. 125, § 11; 2011, ch. 127, § 10; 2011, ch. 156, § 4.
ANNOTATIONS
Bracketed material.
— The bracketed material was inserted by the compiler and is not part of the law.
Laws 2016, ch. 89, § 70 repealed 59A-7-5 NMSA 1978, effective July 1, 2017. For provisions of former section,
see
the 2016 NMSA 1978 on
NMOneSource.com
.
2011 Multiple Amendments.
— Laws 2011, ch. 127, § 10 and Laws 2011, ch. 156, § 4 enacted different amendments to this section that can be reconciled. Pursuant to 12-1-8 NMSA 1978, Laws 2011, ch. 156, § 4, as the last act signed by the governor, is set out above and incorporates both amendments. The amendments enacted by Laws 2011, ch. 127, § 10 and Laws 2011, ch. 156, § 4 are described below. To view the session laws in their entirety,
see
the 2011 session laws on
NMOneSource.com
.
Laws 2011, ch. 156, § 4, effective June 17, 2011, exempted insurance from the application of Chapter 59A, Article 14 NMSA 1978 when New Mexico is not the home state of the insured.
Laws 2011, ch. 127, § 10, effective July 1, 2011, eliminated the limitation on the application of Chapter 59A, Article 14 NMSA 1978 to reinsurance placed by general lines agents and surplus lines brokers.
Applicability.
— Laws 2011, ch. 156, § 11 provided that the provisions §§ 3 through 10 of Laws 2011, ch. 156 are applicable to insurance policies issued on or after July 21, 2011.
The 1991 amendment,
effective April 3, 1991, substituted "Chapter 59A, Article 14 NMSA 1978" for "This article" at the beginning of Subsections A and B; substituted "Chapter 59A, Article 15 NMSA 1978" for "Article 15 of the Insurance Code" at the end in Subsection A; in Subsection B, substituted "Section 59A-7-5 NMSA 1978" for "Section 111 of the Insurance Code" at the end of Paragraph (1), added Paragraph (6) and made a related stylistic change; added Subsection C; and made a minor stylistic change in Subsection A.
Miscommunication may result in coverage despite exclusion.
— Since the surplus lines insurer authorized a surplus lines broker to issue insurance, the insurer must assume responsibility for inadequate insurance coverage resulting from miscommunications made between intermediaries during the process of selling insurance to the insured. Since the insured initially sought coverage for a particular injury, the insured's damages are covered under the policy notwithstanding an exclusion for that particular injury.
Barth v. Coleman
, 1994-NMSC-067, 118 N.M. 1, 878 P.2d 319.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d § 50.