NMSA 1978, § 59A-50-1 Short title
59A-50-1. Short title
This article [Chapter 59A, Article 50 NMSA 1978] may be cited as the "Motor Club Law".
Laws 1984, ch. 127, § 907.
Motor Clubs
NMSA 1978 ch. 59A, art. 50
in effectNMSA 1978, § 59A-50-2 Definitions
59A-50-2. Definitions
As used in this article and unless context otherwise requires:
A. "motor club" means a person engaged, directly or indirectly either as principal or agent, in selling or offering for sale, furnishing or procuring motor club service to members or subscribers. The definition of a motor club does not include any person whose services are provided predominately on a reimbursable basis since these services constitute insurance and are subject to the insurance laws of this state;
B. "licensee" means a motor club to which a certificate of authority has been issued under this article;
C. "applicant" means any person, firm, association, partnership, corporation or other legal entity, applying for a certificate of authority or renewal thereof under this article;
D. "bail bond service" means the furnishing of or arranging for a cash deposit, bond or undertaking, required and acceptable by law, for a member or subscriber accused of a violation of any motor vehicle or traffic law or ordinance so as to obtain his release from custody pending trial;
E. "emergency road service" means the adjustment, repair or replacement of the equipment, tires or mechanical parts of a motor vehicle so that such motor vehicle may be operated under its own power;
F. "financial service" means the arranging for loans or other advances of money to members or subscribers in connection with providing any other motor club service;
G. "legal fee reimbursement service" means the payment for or reimbursing of members or subscribers for fees charged by an attorney for his advice or services rendered to them in defense of a traffic offense;
H. "motor club service" means the rendering, furnishing or procuring of or the payment or reimbursement for, in whole or in part, such services as community traffic safety services, travel and touring service, theft or reward service, map service, towing service, emergency road service, legal fee reimbursement service in the defense of traffic offenses, license and title service, notary service, check cashing service, discount service, financial service and ticket and reservation service, or any one or more thereof, to any person, in connection with the ownership, operation, use or maintenance of a motor vehicle by such person, in consideration of such other person being or becoming a member or subscriber of any motor club, or being or becoming in any manner affiliated therewith, or being or becoming entitled to receive membership or other motor club service therefrom by virtue of any agreement or understanding with any such person;
I. "insurance service" means the selling or making available, of individual or group insurance policies or certificates other than service contracts as a result of membership in or affiliation with a motor club; such policies, if sold or made available, shall be issued only by an insurer duly authorized to do business in this state;
J. "theft service" means the offering of assistance in locating, identifying or recovering stolen or missing motor vehicles owned by members or subscribers, or the offering of a reward for the purpose of detecting or apprehending the person guilty of the theft;
K. "towing service" means the furnishing to members or subscribers of means to move a motor vehicle, under power other than its own, from one place to another, by any lawful wrecker service;
L. "representative" or "motor club representative" means any salesman or other individual who, for compensation, solicits or sells memberships, subscriptions or franchises on behalf of any motor club. This definition does not include any person performing only work of a clerical nature in the office of the motor club;
M. "service contract" means an agreement whereby a motor club, for a consideration, promises to render, furnish, procure or reimburse club members or subscribers specified services; and
N. "discount service" means obtaining merchandise for members or subscribers at a discount.
Laws 1984, ch. 127, § 908.
NMSA 1978, § 59A-50-3 Certificate of authority required; fees
59A-50-3. Certificate of authority required; fees
No person shall provide motor club services or do business as a motor club in this state without having first met the requirements of this article, and having obtained a certificate of authority from the superintendent. The fee for such certificate shall be as specified in Section 101 [59A-6-1 NMSA 1978] (fee schedule) of the Insurance Code.
Laws 1984, ch. 127, § 909.
NMSA 1978, § 59A-50-4 Requirements and application for certificate of authority
59A-50-4. Requirements and application for certificate of authority
A. Each motor club shall obtain a certificate of authority by filing a written application with the superintendent as hereinafter provided and otherwise in such form and manner as the superintendent shall require.
B. The applicant shall furnish to the superintendent such data and information as the superintendent may deem reasonably necessary to enable the superintendent to determine, in accordance with the provisions of Chapter 59A, Article 50 NMSA 1978, whether or not a certificate of authority should be issued to the applicant. It shall be executed under oath by the applicant, or if other than an individual, by an authorized officer of the applicant, and the information filed with the application shall include the following:
(1) if such applicant is a corporation, a certificate of good standing from the secretary of state, together with the names and addresses of all officers and directors, and the names and addresses of all persons owning in excess of ten percent of the capital stock of the corporation issued and outstanding;
(2) if not incorporated, a list of all persons owning an interest in the applicant, the officers thereof and the parties to any operating or management agreement affecting the applicant, together with a copy of such agreement;
(3) a financial statement certified by a registered or certified public accountant, as of the end of the next preceding calendar year, presenting fairly, in accordance with generally accepted accounting principles, the financial position of the applicant and containing such other information as the superintendent may prescribe;
(4) a copy of its service contract, the terms of which shall not:
(a) contain inconsistent, ambiguous or misleading clauses or exceptions or conditions that deceptively affect the risk purported to be assumed or the service to be performed;
(b) contain any inequitable provision or provisions without substantial benefit to the member or subscriber; or
(c) provide for the payment of fees that are unreasonable in relation to the services agreed to be performed;
(5) security in the form of a deposit or bond of not less than twenty-five thousand dollars ($25,000) nor more than two hundred thousand dollars ($200,000) with the amount to be based upon annual membership fees collected from state residents at the following rates:
Annual Resident Fees Amount of Deposit or Bond $1.00 to $150,000.00 $ 25,000.00 $150,001.00 to $250,000.00 $ 40,000.00 $250,001.00 to $500,000.00 $ 80,000.00 $500,001.00 to $1,000,000.00 $150,000.00 $1,000.001.00 and over $200,000.00
Annual Resident Fees
Amount of Deposit or Bond
$1.00 to $150,000.00
$ 25,000.00
$150,001.00 to $250,000.00
$ 40,000.00
$250,001.00 to $500,000.00
$ 80,000.00
$500,001.00 to $1,000,000.00
$150,000.00
$1,000.001.00 and over
$200,000.00
The security shall be deposited with the superintendent in trust or in any other manner the superintendent may direct, and the applicant may deposit either government securities having a market value equal to the amount of security required, or a corporate surety bond in the proper amount in such form as the superintendent may prescribe. The bond shall be issued by a surety insurer authorized to do business in this state, and conditioned upon faithful performance by the applicant of its obligations under Chapter 59A, Article 50 NMSA 1978, including payment of any fines, fees or penalties imposed on it or restitution ordered, but the aggregate liability of the surety for all breaches of the conditions of the bond shall in no event exceed the amount of the bond. The surety on the bond shall have the right to cancel the bond by giving thirty days' notice to the superintendent and thereafter shall be relieved of liability for any breach of condition occurring after the effective date of cancellation. The superintendent may promulgate rules and regulations specifying conditions concerning the bond and providing methods for its termination; and
(6) the bond or deposit provided for in Paragraph (5) of this subsection shall be maintained so long as the licensee has any outstanding liability or obligation in this state. Upon proof satisfactory to the superintendent that the licensee has ceased to do business and that all its liabilities and obligations have been satisfied, the superintendent shall return the security to the licensee.
Laws 1984, ch. 127, § 910; 2013, ch. 75, § 22.
NMSA 1978, § 59A-50-5 Issuance, refusal of certificate of authority; continuance or expiration
59A-50-5. Issuance, refusal of certificate of authority; continuance or expiration
A. Within a reasonable time after application for certificate of authority is filed, the superintendent shall either issue or refuse to issue the certificate. The superintendent shall issue the certificate to the applicant unless:
(1) the applicant has not met all requirements of this article; or
(2) the applicant does not, in the superintendent's judgment, have sufficient financial responsibility to engage in business as a motor club; or
(3) the applicant has failed to make a reasonable showing that all of its owners, managers, officers, directors or representatives are persons of reliability and integrity.
B. If the superintendent refuses to issue the certificate of authority he shall notify the applicant as soon as practicable, stating the reasons for such refusal, and inform the applicant of its right to a hearing on the matter as provided in Section 59 [59A-4-15 NMSA 1978] (hearings, in general) of the Insurance Code.
C. All certificates of authority issued under this article shall be subject to continuance and expiration in the same applicable manner and on dates as provided in Article 5 [Chapter 59A, Article 5 NMSA 1978] of the Insurance Code with respect to certificates of authority of insurers, and for the purpose thereof a motor club may be referred to as an "insurer" therein. As prerequisite to continuance of the certificate of authority the superintendent may require the motor club to file with him its financial statement for the previous calendar year in such form as he may prescribe or accept.
Laws 1984, ch. 127, § 911.
NMSA 1978, § 59A-50-6 Additional security
59A-50-6. Additional security
A. In addition to the security deposited by a motor club at the time application for certificate of authority is made, the superintendent may require the motor club to establish and maintain reserves out of the receipts from the sale of motor club services under contract. The amount required, if any, may be established from time to time as the superintendent determines is reasonable and necessary for the protection of motor club members but in any event shall not exceed fifty percent of the receipts collected for the period of the service contract. Funds received under this section shall be placed in trust and released as directed by regulation or order of the superintendent.
B. Notwithstanding the provisions of Section 910 [59A-50-4 NMSA 1978] of this article and Subsection A of this section the superintendent may require additional general deposits, in a reasonable amount and in admitted assets of the types of securities authorized by law, whenever he deems it necessary.
Laws 1984, ch. 127, § 912.
NMSA 1978, § 59A-50-7 Service contracts
59A-50-7. Service contracts
A. Any motor club service contract form, amendment thereof and agreement collateral thereto shall be filed with the superintendent before final execution of any such document. The superintendent shall prohibit the use of any language, condition or requirement in such service contracts, amendments and collateral agreements which is false, misleading, unfair, inequitable or otherwise contrary to public interest. Any prohibition of language, condition or requirement shall be made by the superintendent within thirty (30) days after the date the document is filed or shall be made anytime thereafter pursuant to the administrative hearing procedures provided for in Article 4 [Chapter 59A, Article 4 NMSA 1978] of the Insurance Code.
B. Each service contract shall contain a provision that if the motor club is unable to perform a contract obligation either on a service or indemnity basis the cash retail equivalent shall be paid to the member.
Laws 1984, ch. 127, § 913.
NMSA 1978, § 59A-50-8 Investigations, examinations
59A-50-8. Investigations, examinations
The superintendent shall have the same powers and authority under this article to conduct investigations, and to conduct examinations of books, records and accounts at the expense of the person so examined, as vested in him with respect to insurers and other persons under Article 4 [Chapter 59A, Article 4 NMSA 1978] of the Insurance Code and subject to the applicable provisions of such Article 4.
Laws 1984, ch. 127, § 914.
NMSA 1978, § 59A-50-9 Suspension, revocation or refusal to continue certificate of authority
59A-50-9. Suspension, revocation or refusal to continue certificate of authority
The superintendent may suspend, revoke, or refuse to continue the certificate of authority of a motor club upon finding, after notice and opportunity for hearing, that the motor club has:
A. violated any provision of this article;
B. failed to maintain the standards required for issuance of its original certificate of authority as specified in this article;
C. become insolvent;
D. liabilities in excess of its assets;
E. engaged in one or more fraudulent or deceptive acts; or
F. entered into a service contract the form of which has not been filed with the superintendent, or containing language, condition or requirement prohibited by the superintendent pursuant to Section 913 [59A-50-7 NMSA 1978] of this article.
Laws 1984, ch. 127, § 915.
NMSA 1978, § 59A-50-10 Name, trademarks, emblems
59A-50-10. Name, trademarks, emblems
The superintendent may disapprove the name, trademarks and emblems which a motor club employs or proposes to employ in connection with its business. If such a name, trademarks or emblems are distinctive and are not similar to or in conflict with a local organization or a nationally registered or copyrighted name, emblem or insignia and not likely to confuse or mislead the public as to the nature or identity of the motor club using or proposing to use it, and will not interfere with the transactions of a motor club already operating in this state, then they shall be approved. Otherwise, the superintendent may disapprove their use and order that the motor club cease to use them.
Laws 1984, ch. 127, § 916.
NMSA 1978, § 59A-50-11 Violation hearings
59A-50-11. Violation hearings
A. If as a result of investigation or examination the superintendent has cause to believe that any person is violating any provision of this article, he shall send notice of the violation by certified mail to the person so believed to be in violation. The notice shall state the time and place for a hearing to be held on the alleged violation, within not less than thirty (30) days from the date of the notice.
B. The hearing shall be conducted and be subject to provisions relative to hearings of the superintendent in general under Article 4 [Chapter 59A, Article 4 NMSA 1978] of the Insurance Code.
Laws 1984, ch. 127, § 917.
NMSA 1978, § 59A-50-12 Service of process; superintendent appointed attorney
59A-50-12. Service of process; superintendent appointed attorney
A. Every authorized motor club shall file with the superintendent its appointment of the superintendent in writing, on form as prescribed and furnished by the superintendent, as its true and lawful attorney, upon whom all lawful process in any action or proceeding against the motor club may be served. In the power of attorney the motor club shall stipulate and agree that all such process served upon the superintendent, or, in his absence, upon any employee in apparent charge of his office, shall be of the same legal force and validity as if served on the motor club itself, and that the authority shall continue in force so long as any liability or obligation remains outstanding in this state against the motor club by reason of its operations under this article.
B. Whenever such process is served upon the superintendent three (3) copies thereof shall be furnished. The superintendent shall forthwith forward by certified mail (return receipt requested) one copy of the process to the motor club and one copy to its resident manager or other similar official, if any, in this state, directed to the address of the motor club, manager or official at address thereof last of record with the superintendent. The server of the process shall at time of such service pay to the superintendent the service of process fee in amount specified in Section 101 [59A-6-1 NMSA 1978] (fee schedule) of the Insurance Code, taxable as costs in the action or proceeding.
C. Process so served upon the superintendent and copies mailed as hereinabove required shall constitute effective service of such process upon the motor club.
Laws 1984, ch. 127, § 918.
NMSA 1978, § 59A-50-13 Registered representatives required; qualifications for registration
59A-50-13. Registered representatives required; qualifications for registration
A. No person shall be, act as or purport to be a representative of a motor club in this state unless then registered as such with the superintendent by the motor club.
B. To qualify for registration the applicant shall:
(1) be an individual not less than eighteen years of age;
(2) be of good personal and business reputation;
(3) not previously have been refused registration or had registration revoked;
(4) be suitable and competent to act as such representative; and
(5) intend in good faith to act and hold himself out as such a representative.
C. As part of an application for registration, a nonresident applicant shall appoint the superintendent, on a form prescribed and furnished by the superintendent, as agent on whom may be served all legal process issued by a court in this state in any action involving the nonresident registrant. The appointment is irrevocable and continues for so long as an action involving the nonresident registrant could arise. Duplicate copies of process shall be served upon the superintendent or other person in apparent charge of the insurance division during the superintendent's absence, accompanied by payment of the process service fee specified in Section 59A-6-1 NMSA 1978. Upon service the superintendent shall promptly forward a copy by certified mail, return receipt requested, to the nonresident registrant at his last address of record with the superintendent. Process served and copy forwarded as so provided constitutes personal service upon the nonresident registrant.
D. A nonresident registrant shall also file with the superintendent a written agreement to appear before the superintendent pursuant to a notice of hearing, show cause order or subpoena issued by the superintendent and deposited, postage paid, by certified mail in a letter depository of the United States post office, addressed to the nonresident registrant at his last address of record with the superintendent, and that upon failure of the nonresident registrant to appear, the nonresident registrant consents to subsequent suspension, revocation or refusal of the superintendent to continue the license.
Laws 1984, ch. 127, § 919; 1999, ch. 272, § 24; 1999, ch. 289, § 37.
NMSA 1978, § 59A-50-14 Registration procedure and matters relating to registration of representatives
59A-50-14. Registration procedure and matters relating to registration of representatives
Appointment of representatives, issuance or refusal of certificate of registration, continuance or expiration of registration, suspension, revocation or refusal to continue registration, and all related matters shall be governed by the applicable provisions of Article 11 [Chapter 59A, Article 11 NMSA 1978] (licensing procedures) of the Insurance Code as though registration of a motor club representative were the same as licensing of an agent by a casualty insurer, except that applicant for registration as motor club representative shall not be required to take and pass an examination, whether written or oral, as a qualification for registration. The fee for filing application for registration and annual continuance of registration shall be as specified in Section 101 [59A-6-1 NMSA 1978] (fee schedule) of the Insurance Code.
Laws 1984, ch. 127, § 920.
NMSA 1978, § 59A-50-15 Motor club bound
59A-50-15. Motor club bound
The motor club shall be bound by the acts of its representative while so registered and acting within his actual or apparent authority.
Laws 1984, ch. 127, § 921.
NMSA 1978, § 59A-50-16 Representing unauthorized motor club prohibited
59A-50-16. Representing unauthorized motor club prohibited
No person shall in this state be, act as, or purport to be a salesman, solicitor or representative of a motor club doing business in this state and not then holding certificate of authority issued by the superintendent.
Laws 1984, ch. 127, § 922.
NMSA 1978, § 59A-50-17 Limitations upon advertising
59A-50-17. Limitations upon advertising
Motor clubs shall make no reference to their certificate of authority or approval from the superintendent or the state in any advertising, circular, contract or membership card nor shall any such motor club advertise or describe its services in such a manner as would lead the public to believe that such services include motor vehicle insurance.
Laws 1984, ch. 127, § 923.
NMSA 1978, § 59A-50-18 Service contract and membership card
59A-50-18. Service contract and membership card
Every motor club shall furnish to its members a service contract and membership card together with the following information:
A. the exact name of the motor club;
B. the exact location of the motor club's home office, and of its usual place or places of business in this state, giving telephone numbers, street numbers, city and zip code; and
C. a description of the services or benefits to which the member or subscriber is entitled. The completed application and the description of services shall constitute the service contract unless the motor club otherwise provides and the superintendent approves another form of service contract.
Laws 1984, ch. 127, § 924.
NMSA 1978, § 59A-50-19 Administrative penalty
59A-50-19. Administrative penalty
Upon a determination by hearing that this article has been violated, the superintendent may issue an order requiring the person to cease and desist from engaging in such violation or, if such conduct is in violation of the express provisions of this article, the superintendent may suspend or revoke the person's certificate of authority or registration.
Laws 1984, ch. 127, § 925.
NMSA 1978, § 59A-50-20 Civil penalties
59A-50-20. Civil penalties
In addition to any penalties imposed pursuant to other provisions of this article, the district court of the county in which the violation occurred may, in an action filed by the superintendent, impose the following civil penalties:
A. for each violation of this article which the person knew or reasonably should have known was such a violation, a penalty of not more than five thousand dollars ($5,000) for each violation but not to exceed an aggregate penalty of fifty thousand dollars ($50,000) in any six-month period;
B. for each violation of this article which the person did not know nor reasonably should have known was such a violation, a penalty of not more than one thousand dollars ($1,000) for each violation but not to exceed an aggregate penalty of ten thousand dollars ($10,000) in any six-month period; and
C. for each violation of an order issued by the superintendent pursuant to Section 925 [59A-50-19 NMSA 1978] of this article, while such order is in effect, a penalty of not more than ten thousand dollars ($10,000).
Laws 1984, ch. 127, § 926.
NMSA 1978, § 59A-50-21 Other provisions applicable
59A-50-21. Other provisions applicable
In addition to those referred to in Chapter 59A, Article 50 NMSA 1978 as to particular matters, the following articles and provisions of the Insurance Code [Chapter 59A NMSA 1978] shall also, to the extent reasonably applicable and not in conflict with the provisions of Chapter 59A, Article 50 NMSA 1978 and the reasonable implications thereof, apply as to motor clubs, their sponsors, directors, officers, representatives, personnel and operations. For the purposes of such applicability, a motor club may be referred to in such articles and provisions as an "insurer":
A. Chapter 59A, Article 1 NMSA 1978;
B. Chapter 59A, Article 2 NMSA 1978;
C. Chapter 59A, Article 4 NMSA 1978;
D. Chapter 59A, Article 10 NMSA 1978;
E. Section 59A-12-22 NMSA 1978;
F. Chapter 59A, Article 16 NMSA 1978;
G. the Insurance Fraud Act [Chapter 59A, Article16C NMSA 1978]; and
H. the Insurers Conservation, Rehabilitation and Liquidation Law [Chapter 59A, Article 41 NMSA 1978].
Laws 1984, ch. 127, § 927; 2001, ch. 297, § 8.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18562/index.doFetched: 10/20/2026