SB 81 — NM PROPERTY INSURANCE PGM. ASSOC. BOARD

(2) one member appointed by the minority floor leader of the senate representing a New Mexico-based insurance trade organization that represents independent insurance agents licensed to write property and casualty insurance in New Mexico;

(3) one member appointed by the minority floor leader of the house of representatives representing the interests of consumers or consumer advocacy organizations in New Mexico who is not a current or former employee of a member insurer;

(4) one member appointed by the attorney general who represents the interests of consumers, and to the h u extent practicable, represents consumer advocacy organizations » r t h in New Mexico;

g e l i (5) one member appointed by the president pro h r i s h , tempore of the senate with actuarial expertise who is not a e h t u g current or former employee of a member insurer;

e b l e e , gh (6) one member appointed by the superintendent n d d i = = o h l ] b ,d with catastrophic risk experience who is not a current or i a º r e r = former employee of a member insurer;

t e w d m a n o d m :

b r e t º o t n = .228948.4SAAIC March 9, 2025 (9:11pm) s k m e - 5 - e a n e d r e l u [ A d (7) one member appointed by the speaker of the house of representatives with finance or statutory accounting expertise who is not a current or former employee of a member insurer;

(8) the state fire marshal or the fire marshal's designee;

and (9) the superintendent or the superintendent's designee.»Sfl1 Sfl1º B.

The board shall elect a chair from among its members.»Sfl1 Sfl1º B.»Sfl1 Sfl1ºC.»Sfl1 The term of office for appointed board members is three years;

(2) members initially appointed pursuant to Sfl1º Paragraphs (1), (2), (6) and (7)(7)»Sfl1 Sfl1ºSubparagraphs (a) and (c) of Paragraph (1) and Paragraphs (3), (5) and h g (7)»Sfl1 of Subsection A of this section shall serve an initial o t hr term of one year;

and g e i k h r (3) members initially appointed pursuant to Paragraphsi s h Sfl1ºParagraphs (3), (4), (5) and (8)(8)»Sfl1 Sfl1ºSubparagraph , t, e u g (b) of SubsectionParagraph A(1) and Paragraphs (2), (4) and (6)»Sfl1 of thise b l e te 17h n d d i Subsection A of this section shall serve an initial term of two = = o h l ] b ,d years.

i a º e r i = r Sfl1ºC.»Sfl1 Sfl1ºD.»Sfl1 Appointed board members t e w ld m a n o d 18m C.:

Appointedb boarde membersd s º o t n = .228948.4SAAIC March 9, 2025 (9:11pm) s k m e - 6 - e a n e d r e l u [ A d may serve three terms.

=Sfl1ºD.»Sfl1 =Sfl1ºE.»Sfl1 19If a lvacancy D.occurs on the board, the original appointing authority shall appoint a new board member to complete the remainder of the board member's term.

IfSfl1º aE.»Sfl1 vacancySfl1ºF.»Sfl1 occursAppointed onboard themembers board,may thereceive originalper idiem aand emileage rpursuant 20to appointingthe authorityPer shallDiem appointand aMileage newAct, boardbut membershall toreceive ano tother mcompensation, mperquisite 21or completeallowance. the remainder of the board member's term.

dSfl1º rF.»Sfl1 eSfl1ºG.»Sfl1 22The E.attorney general shall provide legal representation to the board as necessary." SECTION 3.

Appointed board members may receive per diem and c e s k 23 mileage pursuant to the Per Diem and Mileage Act, but shall e a n b 24 receive no other compensation, perquisite or allowance.

u [ F.

The attorney general shall provide legal .228948.4SA - 4 - representation to the board as necessary." SECTION 3.

ORGANIZATION OF FAIR PLAN AND UNDERWRITING ASSOCIATION.--The superintendent shall direct all insurers licensed to write and writing essential property insurance, as defined by the superintendent [of insurance],insurance ], in New Mexico on h g a direct basis [are authorized, subject to approval and o t hr regulation by the superintendent of insurance] to establish and g e i k maintain a FAIR plan and to establish and maintain an h r i s h underwriting association and to formulate and from time to time , t, e u g amend the plan and articles of association and rules and e b l e e h regulations in connection therewith and to assess and share on n d d i = = o h a fair and equitable basis all expenses, income and losses l ] b ,d i a º e r i = r incident to such FAIR plan and underwriting association in a t e w d m a n o manner consistent with the provisions of the FAIR Plan Act.

e t 17 Such underwriting association shall be known as the "New Mexico w l n d 18m property: insurance program"." = = 19 a l SECTION 4.

Sectionb 59A-29-4e NMSAd 1978s (beingº Lawso 1985,t in = .228948.4SAAIC March 9, 2025 (9:11pm) s k m e - 7 - e a n e d r 20e Chapterl 61,u Section[ 4)A isd amendedSuch tounderwriting read:association shall be known as the "New Mexico property insurance program"." SECTION 4.

aSection t59A-29-4 mNMSA m1978 21(being "59A-29-4.Laws 1985, Chapter 61, Section 4) is amended to read:

REQUIREMENTS"59A-29-4. OF PLAN AND AUTHORITY OF d r e 22 ASSOCIATION.--The FAIR plan and articles of association shall c e s k 23 make provision for an underwriting association having authority e a n b 24 on behalf of its members to cause to be issued property u [ insurance policies and the authority to reinsure in whole or in .228948.4SA - 5 - part any such policies and to cede any such reinsurance.

TheREQUIREMENTS planOF andPLAN articlesAND ofAUTHORITY associationOF shallASSOCIATION.--The provide,FAIR amongplan other things, for the perils to be covered, geographical area of coverage, compensation and commission,articles assessments of members,association [the]shall sharingmake ofprovision expenses,for income and losses on an equitableunderwriting basis,association [cumulativehaving weightedauthority votingon forbehalf theof governingits committeemembers ofto thecause association,to the]be administrationissued ofproperty theinsurance planpolicies and associationthe andauthority anyto otherreinsure matterin necessarywhole or convenientin forpart theany purposesuch ofpolicies assuringand fair access to insurancecede requirements."any SECTIONsuch 5.reinsurance.

AThe newplan sectionand articles of association shall provide, among other things, for the FAIRperils Planto Act,be Sectioncovered, 59A-29-4.1geographical NMSAarea 1978,of iscoverage, enactedcompensation and commission, assessments of members, [the] sharing of expenses, income and losses on an equitable basis, [cumulative weighted voting for the governing committee of the association, the] administration of the plan and association and any other matter necessary or convenient for h g the purpose of assuring fair access to read:insurance requirements." o t hr SECTION 5.

"59A-29-4.1.A new section of the FAIR Plan Act, Section g e i k 59A-29-4.1 NMSA 1978, is enacted to read:

[NEWh MATERIAL]r FAIRi PLANs REQUIREMENTS.--h A."59A-29-4.1.

The[NEW boardMATERIAL shall] establish a FAIR planPLAN toREQUIREMENTS.-- provide, propertyt, ande commercialu propertyg insuranceA. to persons who are unable to obtain insurance in the regular market.

B.The board shall establish a FAIR plan to provide e b l e e h property and commercial property insurance to persons who are n d d i = = o h unable to obtain insurance in the regular market.

l ] b ,d i a º e r i = r B.

t e tw 17d m a n o (1) not be excessive, inadequate or unfairly w l n d 18m discriminatory;:

=b =e 19d as lº (2)o bet actuariallyn sound= so.228948.4SAAIC thatMarch revenue9, i2025 a(9:11pm) es rk 20m generatede from- premiums8 is- adequatee toa payn fore expectedd losses,r ae tl mu m[ 21A expensesd anddiscriminatory; taxes;

d(2) rbe eactuarially 22sound (3)so reflectthat therevenue investmentgenerated incomefrom ofpremiums theis plan;adequate to pay for expected losses, expenses and taxes;

c(3) e s k 23 and e a n b 24 (4) reflect the costinvestment income of reinsurancethe orplan; other u [ capital risk transfer markets." .228948.4SA - 6 - SECTION 6.

and (4) reflect the cost of reinsurance or other capital risk transfer markets." SECTION 6.

[NEW MATERIAL]MATERIAL ] PLAN OF OPERATION.-- A.

(2) coverage limits not to exceed Sfl1º one h g million dollars ($1,000,000) for property and five million o t hr dollars ($5,000,000) for each commercial property and a policy g e i k limit of ten million dollars ($10,000,000) for commercial property;h r i s h property»Sfl1 Sfl1ºseven hundred fifty thousand dollars , t, e u g ($750,000) for dwellings and two million dollars ($2,000,000) e b l e e h for each commercial property and a maximum policy limit of five n d d i = = o h l ] b ,d million dollars ($5,000,000)»Sfl1 ;

provided that beginning in i a º e r i = r fiscal year 2027 and each fiscal year thereafter, the board may t e w d m a n o adjust the coverage limits by an amount that does not exceed the change between the penultimate calendar year and the immediately preceding calendar year of e t 17 the consumer price index for housing published by the bureau of w l n d 18m labor: statistics of the United States department of labor;

=b e d s º o t n = 19.228948.4SAAIC March 9, 2025 (9:11pm) s k m e - 9 - e a n e d r e l (3)u [ A d the policychange formsbetween tothe bepenultimate used;calendar year and the immediately preceding calendar year of the consumer price index for housing published by the bureau of labor statistics of the United States department of labor;

i(3) a e r 20 (4) the perilspolicy forms to be covered;used;

a(4) t m m 21 (5) the establishmentperils of reasonable d r e 22 underwriting standards to determinebe thecovered; eligibility of a risk, c e s k 23 including mitigation requirements and property inspections;

e(5) athe nestablishment bof 24reasonable (6)underwriting thestandards compensation and commissions to bedetermine uthe [eligibility paidof toa memberrisk, insurersincluding offeringmitigation therequirements FAIRand plan;property inspections;

.228948.4SA(6) -the 7compensation -and (7)commissions theto timebe framespaid forto feesmember toinsurers beSTBTCº collected, fromand membertheir insurers;licensed producers,»STBTC offering the FAIR plan;

(7) the time frames for fees to be collected from member insurers;

and (9) any other matter necessary for the purpose h g of assuring fair access to a FAIR plan.

o t hr B.

The plan of operation and any amendments to the g e i k plan of operation become effective upon written approval by the h r i s h superintendent.

, t, e u g C.

The board may, on its own initiative or at the e b l e e h request of the superintendent, amend the plan of operation, n d d i = = o h subject to approval by the superintendent.

l ] b ,d i a º e r i = r D.

If the board fails to submit a plan of operation t e w d m a n o that is approved by the superintendent by July 1, 2026, the superintendentd shallm promulgate: rules to implement and administer the FAIR Plan Act.

b e d s º o t 17n E.= .228948.4SAAIC March 9, 2025 (9:11pm) s k m e - 10 - e a n e d r e l u [ A d superintendent shall promulgate rules to implement and administer the FAIR Plan Act.

IfE. the superintendent determines that an w l n d 18 approved plan of operation is insufficient to satisfy the = = 19 a l requirements of the FAIR Plan Act, the superintendent shall i a e r 20 provide notice to the board of the superintendent's intent to a t m m 21 revoke approval of all or part of the plan of operation.

dIf rthe esuperintendent 22determines Withinthat thirtyan daysapproved plan of theoperation superintendent'sis notice,insufficient to satisfy the boardrequirements cof ethe sFAIR kPlan 23Act, maythe submitsuperintendent ashall revisedprovide plannotice ofto operationthe forboard of the superintendent's eintent ato nrevoke bapproval 24of reviewall andor approval.part of the plan of operation.

IfWithin thethirty boarddays fails to submit a revised u [ plan of operationthe withinsuperintendent's thirtynotice, days, the superintendentboard may .228948.4SAsubmit -a 8revised - make specific changes to the existing plan of operation sofor that the plansuperintendent's satisfiesreview theand requirementsapproval. of the FAIR Plan Act." SECTION 7.

If the board fails to submit a revised plan of operation within thirty days, the superintendent may make specific changes to the existing plan of operation so that the plan satisfies the requirements of the FAIR Plan Act." SECTION 7.

CHANGES IN PLAN OR ARTICLES.--The [governing committee of the New Mexico property insurance program may, on h its own initiative or at the request of the superintendent of u » r t h insurance, amend the plan and articles, subject to approval by g e l i the superintendent] FAIR plan and articles of association may h r i s be amended by the board on its own initiative, subject to h , e h t u g approval by the superintendent or at the direction of the e b l e e , gh superintendent." n d d i = = o h SECTION 8.

A new section of the FAIR Plan Act, Section l ] b ,d i a º r e r = 59A-29-6.1 NMSA 1978, is enacted to read:

t e w d m a n o "59A-29-6.1.

[NEW MATERIAL] ENFORCEMENT.-- A.d m :

Afterb noticer and hearing, the superintendent may e t 17º suspendo ort revoken the= certificate.228948.4SAAIC ofMarch authority9, to2025 transact(9:11pm) ws lk nm de 18- insurance11 business- ine this state of a membern insurere thatd failsr =e = 19 a l tou timely[ payA and assessmentA. or to comply with the plan of i a e r 20 operation.

After notice and hearing, the superintendent may suspend or revoke the certificate of authority to transact insurance business in this state of a tmember minsurer mthat 21fails B.to timely pay an assessment or to comply with the plan of operation.

AsB. an alternative to suspension or revocation of d r e 22 a certificate of authority, the superintendent may impose a c e s k 23 fine on any member insurer that fails to timely pay an e a n b 24 assessment or to comply with the plan of operation in an amount u [ that is the greater of:

.228948.4SAAs -an 9alternative -to (1)suspension theor amountrevocation of a certificate of authority, the superintendent may impose a fine on any member insurer that fails to timely pay an assessment plusor interestto andcomply with the superintendent'splan cost of enforcement;operation in an amount that is the greater of:

(1) the amount of the assessment plus interest and the superintendent's cost of enforcement;

"[NEW MATERIAL] ENTITIES THAT CAN SELL FAIR PLAN POLICIES.--The board and the New Mexico property insurance h g program shall not sell a policy subject to the FAIR Plan Act o t hr directly to any person.

A FAIR plan policy may only be issued g e i k through a member insurer that shall, on behalf of a person, h r i s include evidence of at least three declinations of coverage for h , t, e u g the property as part of the submittal of an application for a e b l e e h policy with the New Mexico property insurance program." n d d i = = o h SECTION 10.

A new section of the FAIR Plan Act is enacted l ] b ,d i a º e r i = r to read:

t e w d m a n o "[NEW MATERIAL] ASSESSMENT OF FEES.-- ed tm 17: A.

Theb boarde mayd collects feesº fromo membert insurers w l n d= 18.228948.4SAAIC asMarch needed9, for2025 the(9:11pm) News Mexicok propertym insurancee program- to12 =- =e 19 a ln remaine solvent,d subjectr toe approvall byu the[ superintendent.A d A.

iThe aboard emay rcollect 20fees B.from member insurers as needed for the New Mexico property insurance program to remain solvent, subject to approval by the superintendent.

AB. member insurer assessed a fee pursuant to this a t m m 21 section may recoup the fee directly from the member insurer's d r e 22 policyholders as a surcharge on the policyholders.

TheA cmember einsurer sassessed ka 23fee surchargepursuant to this section may berecoup recoupedthe overfee directly from the member insurer's policyholders as a three-yearsurcharge period.on the policyholders.

eThe asurcharge nmay bbe 24recouped C.over a three-year period.

AC. member insurer shall not increase premiums u [ based on a fee assessed pursuant to this section.

.228948.4SAA -member 10insurer -shall D.not increase premiums based on a fee assessed pursuant to this section.

D.

The board may defer, in whole or in part, a fee assessed to a member insurer if, in the opinion of the board, payment of the fee would endanger the solvency of a member insurer." h g SECTION 11.

A new section of the FAIR Plan Act is enacted o t hr to read:

g e i k "[NEW MATERIAL] REPORTING REQUIREMENTS.-- h r i s A.

On or before April 1, 2027, and each year h , t, e u g thereafter, the board shall submit a report to the e b l e e h superintendent, in a form and manner prescribed by the n d d i = = o h superintendent, that provides information on the:

l ] b ,d i a º e r i = r (1) financial condition of the FAIR plan;

t e tw 17d m a n o (2) number of policies and the coverage w l n d 18m available: through the FAIR plan;

andb =e d s º o t n = 19.228948.4SAAIC aMarch l9, (3)2025 number(9:11pm) ands typesk ofm claimse made- under13 the- ie a n e d r 20e l u [ A d available through the FAIR plan.plan;

aand t(3) mnumber mand 21types B.of claims made under the FAIR plan.

InB. addition to the annual reporting requirement, d r e 22 the superintendent may require the board to submit quarterly c e s k 23 reports if the superintendent determines that quarterly e a n b 24 reporting is necessary to ensure the continued solvency of the u [ FAIR plan." .228948.4SA - 11 - SECTION 12.

APPROPRIATION.--FiftyIn millionaddition dollarsto ($50,000,000)the isannual appropriatedreporting fromrequirement, the generalsuperintendent fundmay torequire the officeboard ofto superintendentsubmit ofquarterly insurancereports forif expenditurethe insuperintendent fiscaldetermines yearthat 2026quarterly reporting is necessary to administerensure the FAIRcontinued Plansolvency Actof andthe fireFAIR mitigationplan." programs.SFCº SECTION 12.

AnyAPPROPRIATION.--Fifty unexpendedmillion ordollars unencumbered($50,000,000) balanceis remainingappropriated atfrom the endgeneral fund to the office of superintendent of insurance for expenditure in fiscal yearSFCºSTBTCºyear 2026»STBTC STBTCºyears 2026 shalland revert2027»STBTC»SFC SFCºyear 2026»SFC to administer the generalFAIR fund.Plan Act and fire mitigation programs.

Any unexpended or unencumbered balance remaining at the end of fiscal year SFCºSTBTCº2026»STBTC STBTCº2027»STBTC»SFC SFCº2026»SFC shall revert to the general fund.»SFC h u SECTION 13.SFCº 13.»SFC SFCº12.»SFC REPEAL.--Section 59A- » r t h 29-9 NMSA 1978 (being Laws 1985, Chapter 61, Section 9) is g e l i repealed.

REPEAL.--Sectionh 59A-29-9r NMSAi 1978s (beingSECTION LawsSFCº14.»SFC 1985,SFCº13.»SFC ChapterEMERGENCY.--It 61,is Sectionh 9), ise repealed.h t u g necessary for the public peace, health and safety that this act e b l e e , gh take effect immediately.

SECTIONn 14.d d i = = o h - 14 - l ] b ,d i a º r e r = t e w d m a n o d m :

EMERGENCY.--Itb isr necessarye fort theº publico peace,t healthn and= safety.228948.4SAAIC thatMarch this9, act2025 take(9:11pm) effects immediately.k m e e a n e d r e l u [ A d

- 12 - 13 15 e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .228948.4SA