Opinion ID: 2607296
Heading Depth: 3
Heading Rank: 3

Heading: National's Obligations Under Self-Insurance Regulations

Text: Notwithstanding the MFRA's express exemption of self-insured entities, Cordova argues that the MFRA applies to self-insurers just as it applies to other members of the motoring public. In support of this contention, Cordova cites to N.M.Ins.Dep't Reg. 2-3, a regulation promulgated by the State Superintendent of Insurance pursuant to statutory mandate. See § 66-5-207.1(A). That regulation specifies the requirements for obtaining a certificate of self-insurance, and one of its provisions states that car rental agreements must provide that the lessor shall be primarily liable and [the] lessee shall be secondarily liable for responsibilities under the Mandatory Financial Responsibility] Act. [2] N.M.Ins.Dep't Reg. 2-3, at 10. We cannot agree with Cordova's theory of the significance of this provision. To the extent that Cordova interprets this language as bringing self-insured entities within the purview of the MFRA, that interpretation directly conflicts with the statutory language that explicitly exempts self-insured vehicles from the MFRA. See § 66-5-207(E). The Superintendent of Insurance may not promulgate a regulation that conflicts with a statute. See Peck v. University Residence Comm., 248 Kan. 450, 807 P.2d 652, 660 (1991). Nor do we agree with Cordova that exempting self-insured entities from the MFRA is inconsistent with the public policies embodied in the MFRA. The stated purpose of the MFRA is to ensure that vehicle owners and operators have the ability to respond in damages to accidents arising out of the use and operation of a motor vehicle. Section 66-5-201.1. One way to demonstrate the ability to respond in damages is to purchase an insurance policy that conforms to the criteria specified in the MFRA. If, on the other hand, an entity can demonstrate that it has sufficient financial reserves such that it will be able to adequately respond in damages without purchasing insurance, then the Superintendent of Insurance may issue a certificate of self-insurance. See N.M.Ins.Dep't Reg. 2-3, at 4-10. In our view, the legislature intended for self-insurance and the purchase of insurance to serve as two alternative means of ensuring that owners of vehicles are able to respond in damages. Cf. Levi Strauss & Co., 112 N.M. at 436-37, 816 P.2d at 505-06 (noting that self-insurance under the workers' compensation law is a way of proving to the state that an employer can satisfy its obligation under the workers' compensation laws).