New Mexico Administrative Code › Title 1 - GENERAL GOVERNMENT ADMINISTRATION › Chapter 6 - RISK MANAGEMENT › Part 5 - CERTIFICATES OF COVERAGE › Section 1.6.5.9 - CERTIFICATE OF COVERAGE GUIDELINES

Current through Register Vol. 35, No. 13, July 16, 2024
The following guidelines govern all certificates of coverage
				  that may be issued under cover of a letter of administration.
A. By statute, NMSA 1978, Section 59A-1-16
				(C), the general services department, risk management division is expressly
				exempt for the provisions of the insurance code of the state of New Mexico,
				NMSA 1978, Section 59A-1-1 et seq. Certificates of coverage do not provide
				insurance, but instead provide an understanding among the govnermental
				entitites of the state of New Mexico about the intent of the use of funds from
				the public liability fund. The public liability fund is a self-insurance
				mechanism established to handle losses to or claims against covered
				governmental entities. Although coverage through the fund may be in formats
				like or similar to insurance policies, the relationship between the fund and
				covered entities is not that of insurer and insured. No special duties, rules
				of construction, or other legal doctrines recognized by the courts or created
				by statute with respect to the relationship of an insurer to its insured shall
				apply to the fund or entities covered by it.
B. Pursuant to NMSA 1978, Section 41-4-23(D),
				all decisions to expend money from the fund to provide coverage to defend, save
				harmless, and indemnify any state agency or employee of a state agency or a
				local public body or an employee of such local public body are within the
				discretion of the director.
C. Duty
				to Defend.
(1) Pursuant to NMSA 1978, Section
				41-4-23(B) (3), the general services department, risk management division may
				expend money from the public liability fund to defend, save harmless, and
				indemnify a governmental entity or employee of a governmental entity. This
				defense extends only as far as a governmental entity's duty to provide a
				defense pursuant to NMSA 1978, Section 41-4-20(A) for causes of action that may
				be properly brought under the Tort Claims Act, and any defense provided by the
				general services department, risk management division for any legal claim or
				liability exposure is controlled by the terms of the valid and current
				certificate of coverage in force at the time the claim arose, to the limits of
				such certificate of coverage. The director may contract with one or more
				attorneys or law firms, or with the attorney general, to defend tort liability
				claims against governmental entities and their employees acting within the
				scope of their duties.
(2) Pursuant
				to NMSA 1978, Section 41-4-4(G) of the Tort Claims Act, the general services
				department, risk management division's duty to defend continues after public
				employment with the governmental entity has been terminated if the occurrence
				for which damages are sought happened while the public employee was acting
				within the scope of duty while the public employee was in the employ of the
				governmental entity.
(3) Pursuant
				to NMSA 1978, Section 41-4-17(B), any settlement or judgment in any action
				brought under the act constitutes a complete bar to any further legal action on
				the same occurrence against a governmental entity or public employee whose
				negligence gave rise to the action. As a result of any settlement or judgment
				in any action brought under the act, the duty to defend is deemed to have been
				satisfied by the general services department, risk management division, and no
				further duty to defend continues to exist.