New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 18 - CREDIT INSURANCE › Part 3 - CREDITOR-PLACED INSURANCE › Section 13.18.3.7 - DEFINITIONS

Current through Register Vol. 35, No. 13, July 16, 2024
As used in this rule:
A.
"Actual cash value"
means the
				cost of replacing damaged or destroyed property with comparable new property,
				minus depreciation and obsolescence.
B.
"Assigned risk plan"
means
				the insurance plan established pursuant to the Motor Vehicle Assigned Risks
				Law, Sections
				59A-32-1
				et. seq NMSA 1978;
C.
"Blanket insurance"
means a policy of insurance issued to a
				creditor that covers direct accidental damage to collateral without listing the
				specific items of collateral covered;
D.
"Collateral"
means property
				that is pledged as security for the satisfaction of a debt;
E.
"Credit agreement"
means the
				written document that sets forth the terms of the credit transaction and
				includes the security agreement;
F.
"Credit property insurance"
means property insurance written in
				connection with credit transactions under which the creditor is the primary
				beneficiary;
G.
"Credit
				transaction"
means a transaction by the terms of which the repayment of
				money loaned or credit commitment made, or payment for goods, services, or
				properties sold or leased, is to be made at a future date;
H.
"Creditor"
means a lender of
				money or vendor or lessor of goods, services, property, rights or privileges
				for which payment is arranged through a credit transaction, or any successor to
				the right, title or interest of a lender, vendor or lessor, and includes
				affiliates, subsidiaries, agents, employees, and representatives of the
				creditor;
I.
"Creditor-placed
				insurance"
means insurance that is purchased unilaterally by the
				creditor, who is the named insured, subsequent to the date of the credit
				transaction, providing coverage against direct loss or damage to collateralized
				property. It is purchased according to the terms of the credit agreement as a
				result of the debtor's failure to provide required physical damage insurance,
				with the cost of the coverage being charged to the debtor;
J.
"Debtor"
means a borrower of
				money or a purchaser or lessee of goods, services, property, rights, or
				privileges for which payment is arranged through a credit
				transaction;
K.
"FAIR
				plan"
means the insurance plan established pursuant to the FAIR Plan
				Act, Sections
				59A-29-1 et. seq NMSA
				1978;
L.
"Insurance
				tracking"
means activities undertaken by a person other than a creditor
				to monitor evidence of insurance on collateralized credit transactions to
				determine whether insurance required by the credit agreement has lapsed and to
				communicate with debtors concerning the status of insurance coverage;
M.
"Lapse"
means that the
				insurance coverage required by the credit agreement is not in force;
N.
"Limited dual interest
				insurance"
means insurance purchased by the creditor to insure its
				interest in the collateral that does not contain the three conditions for loss
				payment required for single interest insurance and extends coverage on the
				collateral while it is in the possession of the debtor;
O.
"Loss ratio"
means incurred
				losses divided by earned premiums;
P.
"Motor vehicles"
means those
				vehicles subject to the Mandatory Financial Responsibility Act, Sections
				66-5-201
				et. seq NMSA 1978;
Q.
"Net
				debt"
means the amount necessary to liquidate the remaining debt in a
				single lump-sum payment, excluding all unearned interest and other unearned
				charges;
R.
"Personal
				property"
means all tangible property other than real property and
				includes motor vehicles, mobile homes and manufactured housing;
S.
"Single interest insurance"
means insurance purchased by the creditor to insure its interest in the
				collateral securing a debtor's credit transaction which requires that three
				conditions be met for payment of loss under the policy:
(1) the debtor has defaulted in payment on
				the credit transaction;
(2) the
				creditor has legally repossessed the collateral, unless collateral has been
				stolen from the debtor; and
(3) the
				creditor has suffered an impairment of interest.