SB 221 — ADDITIONAL UNFAIR INSURANCE CLAIMS PRACTICE

SENATE BILL 221 57TH LEGISLATURE -STATEOFNEWMEXICO- FIRST SESSION, 2025 INTRODUCED BY Pat Woods and Gabriel Ramos and Anita Gonzales 6 8 10 AN ACT RELATING TO INSURANCE;

145 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

e t 17 "59A-16-20.

UNFAIR CLAIMS PRACTICES DEFINED AND w l n d 18 PROHIBITED.--Any [and all] of the following practices with = = 19 a l respect to claims, by an insurer or other person, knowingly i a e r 20 committed or performed with such frequency as to indicate a a t m m 21 general business practice are defined as unfair and deceptive d r e 22 practices and are prohibited:

c e s k 23 A.

misrepresenting to insureds pertinent facts or e a n b 24 policy provisions relating to coverages at issue;

u [ B.

failing to acknowledge and act reasonably .229529.1SA promptly upon communications with respect to claims from insureds arising under policies;

failing to affirm or deny coverage of claims of insureds within a reasonable time after proof of loss requirements under the policy have been completed and SB 221 Page 1 submitted by the insured;

compelling insureds to institute litigation to e t 17 recover amounts due under policy by offering substantially less w l n d 18 than the amounts ultimately recovered in actions brought by = = 19 a l such insureds when such insureds have made claims for amounts i a e r 20 reasonably similar to amounts ultimately recovered;

a t m m 21 H.

attempting to settle a claim by an insured for d r e 22 less than the amount to which a reasonable person would have c e s k 23 believed [he] the insured was entitled by reference to written e a n b 24 or printed advertising material accompanying or made part of an u [ application;

.229529.1SA - 2 - I.

attempting to settle claims on the basis of an application that was altered without notice to, or knowledge or consent of, the insured [his] or the insured's representative, agent or broker;

SB 221 Page 2 K.

delaying the investigation or payment of claims by requiring an insured, a claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of e t 17 which submissions contain substantially the same information;

w l n d 18 M.

failing to settle an insured's claims promptly = = 19 a l where liability has become apparent under one portion of the i a e r 20 policy coverage in order to influence settlement under other a t m m 21 portions of the policy coverage;

d r e 22 N.

failing to promptly provide an insured a c e s k 23 reasonable explanation of the basis relied on in the policy in e a n b 24 relation to the facts or applicable law for denial of a claim u [ or for the offer of a compromise settlement;

[or] .229529.1SA - 3 - O.

consideringtreating an insured's inquiry relating to damage or loss as a claim when the facts of the inquiry are not covered in the policy, the insurer makes no payment to or on behalf of the insured and the claim does not involve SB 221 Page 3 deceptive practices on the part of the insured."insured.” -SB 4221 -Page 104 123 145 167 e9 t25 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 [ .229529.1SA