- New Mexico does maintain a list of eligible surplus lines insurers (foreign insurers only).
- New Mexico does have an industrial insured exemption which will remain in effect. The NRRA exempt commercial purchaser exemption is also in effect. (§ 59-14-2(F)).
- Surplus lines tax: 3.003%, payable by broker.
- New Mexico enacted Legislation in 2017 which eliminates SLIMPACT authorization.
- New Mexico does not allow domestic surplus lines insurers in the state.
Eligibility and Filing Requirements (All Insurers):
Certificate of Compliance from domiciliary regulator due every March 1.
Eligibility and Filing Requirements (Alien Insurers Only):
Alien insurers must be on the NAIC Quarterly Listing of Alien Insurers. § 59A-14-4(C)(3).
Eligibility and Filing Requirements (Foreign Insurers Only):
New Mexico added a specific provision on foreign insurer eligibility to the SLIMPACT Model (§ 59A-14-4(C)): Surplus lines brokers shall not place coverage with a nonadmitted insurer unless, at the time of placement, the nonadmitted insurer:
- Is authorized to write such insurance in its domiciliary jurisdiction;
- Has established satisfactory evidence of good repute and financial integrity; and
- Possesses capital and surplus – or its equivalent under the laws of its domiciliary jurisdiction that equals the greater of the minimum capital and surplus requirements under the laws of New Mexico or $15 million.
The superintendent may waive the minimum capital and surplus requirement for a nonadmitted insurer if the superintendent makes an affirmative finding of acceptability after considering: quality of management, capital and surplus of a parent company, company underwriting profit and investment trends, market availability, and company record and reputation within the industry. § 59A-14-4(C)(1)(b). The superintendent may not make a finding of acceptability if the insurer’s capital and surplus is under $4.5 million. § 59A-14-4(C)(1)(b).
Types of Insurance Exempted from Surplus Lines Regulation:
- Wet marine and transportation insurance as defined in Section 59A – 7-5 NMSA 1978.
- Insurance on subjects located, resident, or to be performed wholly outside of New Mexico or on vehicles or aircraft owned and principally garaged outside New Mexico.
- Insurance on property or operation of railroads engaged in interstate commerce.
- Insurance of aircraft of common carriers, cargo of such aircraft, or against liability, other than employer’s liability, arising out of the ownership, maintenance or use of such aircraft.
- Insurance of automobile bodily injury and property damage liability risks when written by Mexican insurers and covering risks in Mexico and not in the U.S.
- Insurance independently procured.
Other Comments or Requirements:
- Burden is on broker not to place insurance with financially unsound insurers whose capital and surplus is insufficient for the particular risk.
- Every insurance contract procured and delivered as surplus lines insurance must bear the name, address and signature of the surplus lines broker who procured it and have stamped, printed or otherwise displayed prominently in boldface ten-point or larger type either upon its declarations page or by attachment of an endorsement, the form of which may be promulgated by the superintendent, the following:“This policy provides surplus lines insurance by an insurer not otherwise authorized to transact business in New Mexico. This policy is not subject to supervision, review or approval by the superintendent of insurance. The insurance so provided is not within the protection of any guaranty fund law of New Mexico designed to protect the public in the event of the insurer’s insolvency.”
- New Mexico enacted Legislation in 2017 that eliminates the need for brokers to file surplus lines affidavits with the state. Instead, brokers now need to maintain a signed statement of diligent effort.
- As of January 1, 2020, surplus line premium tax collection is performed by the New Mexico Taxation and Revenue Department. Relevant broker forms for the remittance of surplus line premium tax can found at the Taxation and Revenue Department website: https://www.tax.newmexico.gov/.