NMSA 1978, § 59A-48-1 Short title
59A-48-1. Short title
This article [Chapter 59A, Article 48 NMSA 1978] may be cited as the "Prepaid Dental Plan Law".
Laws 1984, ch. 127, § 880.
Prepaid Dental Plans
NMSA 1978 ch. 59A, art. 48
in effectNMSA 1978, § 59A-48-2 Definitions
59A-48-2. Definitions
As used in this article:
A. "member" means an individual who is enrolled in a group prepaid dental plan as a principal subscriber together with such person's dependents who are entitled to dental care services under the plan solely because of their status as dependents of the principal subscriber;
B. "membership coverage" means any certificate or contract issued to a member setting out the dental coverage to which such member is entitled;
C. "prepaid dental plan" means any contractual arrangement whereby any prepaid dental plan organization undertakes to provide directly or to arrange for prepaid dental services and to pay or make reimbursement for any remaining portion of such prepaid dental services on a prepaid basis through insurance or otherwise;
D. "prepaid dental plan organization" means any person who undertakes to conduct one or more prepaid dental plans providing only dental services; provided, that this article shall not apply to nonprofit health care plans or accident and health insurance programs;
E. "prepaid dental services" means services included in the practice of dentistry as defined in the Dental Act [61-5-1 to 61-5-9, 61-5-11 to 61-5-22 NMSA 1978][repealed]; and
F. "provider" means any person licensed under the Dental Act [repealed] or otherwise authorized to furnish prepaid dental services in New Mexico.
Laws 1984, ch. 127, § 881.
NMSA 1978, § 59A-48-3 Certificate of authority required
59A-48-3. Certificate of authority required
No person may establish or operate a prepaid dental plan organization in New Mexico, or sell or offer to sell or solicit offers to purchase, or receive advance or periodic consideration in conjunction with a prepaid dental plan without obtaining and maintaining a certificate of authority pursuant to the provisions of this article.
Laws 1984, ch. 127, § 882.
NMSA 1978, § 59A-48-4 Application for certificate of authority
59A-48-4. Application for certificate of authority
A. An application for a certificate of authority to operate as a prepaid dental plan organization shall be filed with the superintendent in form prescribed by the superintendent, shall be verified by an officer or authorized representative of the applicant and shall set forth or be accompanied by the following:
(1) a copy of any basic organizational document of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents together with all amendments to such documents;
(2) a copy of any bylaws, rules and regulations or similar document regulating the internal affairs of the applicant;
(3) a list of the names, addresses and official positions of the persons who are responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation and the partners or members in the case of a partnership or association;
(4) if the prepaid dental plan organization is a corporation, evidence that the corporation's board of directors includes:
(a) dentists, duly licensed pursuant to the provisions of the Dental Act [61-5-1 to 61-5-9, 61-5-11 to 61-5-22 NMSA 1978][repealed], who have contracted with the corporation to render dental services to members;
(b) members of the prepaid dental plan, who shall comprise at least one-third of the members of the board; and
(c) at least one director who is a licensed dentist who has not contracted to render dental services to members;
(5) a copy of any contract made or to be made between any providers or persons listed in Paragraph (3) of this subsection and the applicant;
(6) a statement generally describing the prepaid dental plan organization, its dental plan or plans, facilities and personnel, as approved by the director of the health services division of the health and environmental department [department of health];
(7) a copy of the form of membership coverage to be issued to members;
(8) a copy of the form of any group contract which is to be issued to employers, unions, trustees or other applicants;
(9) financial statements showing the applicant's assets, liabilities and sources of financial support. If the applicant's financial affairs are audited by independent certified accountants, a copy of the applicant's most recent regular certified financial statement shall satisfy this requirement unless the superintendent determines that additional or more recent financial information is required for the proper administration of this article;
(10) a description of the proposed method of marketing the plan, a financial plan which includes a three-year projection of the initial operating results anticipated and a statement as to the sources of working capital as well as any other sources of funding;
(11) a power of attorney duly executed by the applicant, if not domiciled in New Mexico, which appoints the superintendent, his successors in office and his duly authorized deputies as the true and lawful attorney of such applicant in and for this state, upon whom all lawful process in any legal action or proceeding against any prepaid dental plan organization may be served in any cause of action arising in New Mexico;
(12) a statement reasonably describing the geographic area or areas to be served, as approved by the director of health services division of the health and environment department [department of health];
(13) a fee for filing application for certificate of authority as specified in Section 101 [59A-6-1 NMSA 1978] (fee schedule) of the Insurance Code; and
(14) such other information as the superintendent may require.
B. Within ten (10) days following any significant modification of information previously furnished pursuant to Subsection A of this section, a prepaid dental plan organization shall file notice of such modification with the superintendent.
Laws 1984, ch. 127, § 883.
NMSA 1978, § 59A-48-5 Issuance of certificate of authority
59A-48-5. Issuance of certificate of authority
A. Issuance of a certificate of authority shall be granted by the superintendent if the superintendent is satisfied that the following conditions are met:
(1) the persons responsible for conducting the affairs of the prepaid dental plan organization are competent and trustworthy and are professionally capable of providing or arranging for the provision of services offered;
(2) the prepaid dental plan organization constitutes an appropriate mechanism to achieve an effective prepaid dental plan, in accordance with regulations issued by the director of the health services division of the health and environment department [department of health], which shall include at least the basic dental services appropriate to such plan as determined by the director of the health services division of the health and environment department;
(3) the prepaid dental plan organization is financially responsible and may reasonably be expected to meet its obligations to members and prospective members. In making this determination, the superintendent shall consider at least:
(a) the financial soundness of the prepaid dental plan's arrangement for services and the schedule of charges used;
(b) any agreement with an insurer, a hospital or a medical service corporation, a government or any other organization for insuring the payment of the cost of prepaid dental services or the provisions for automatic applicability of an alternative coverage in the event of the discontinuance of the plan; and
(c) the sufficiency of an agreement with providers for the provision of prepaid dental services; and
(4) each officer responsible for conducting the affairs of the prepaid dental plan organization is covered under an individual or blanket fidelity bond in the amount of fifty thousand dollars ($50,000), and such bond has been filed with and approved by the superintendent.
B. A certificate of authority shall be subject to continuance, expiration, termination, suspension or revocation on the same applicable bases as provided under Article 5 [Chapter 59A, Article 5 NMSA 1978] of the Insurance Code as to insurers in general.
Laws 1984, ch. 127, § 884.
NMSA 1978, § 59A-48-6 Deposit requirement; exception
59A-48-6. Deposit requirement; exception
A. A prepaid dental plan organization shall maintain on deposit with the state treasurer through the superintendent a surety bond guaranteeing services under the plan, or cash or securities eligible for investments of capital funds of health insurers under Chapter 59A, Article 9 NMSA 1978, in the following amounts depending on the number of members entitled to dental care services pursuant to contracts issued by the plan:
Number of Members Deposit 2,500 or less $25,000 2,501 - 5,000 30,000 5,001 - 7,500 40,000 7,501 - 10,000 50,000 10,001 - 15,000 75,000 15,001 - 20,000 100,000 20,001 - 25,000 125,000 25,001 - 30,000 150,000 30,001 - 40,000 175,000 40,001 and above 200,000
Number of Members
Deposit
2,500 or less
$25,000
2,501 - 5,000
30,000
5,001 - 7,500
40,000
7,501 - 10,000
50,000
10,001 - 15,000
75,000
15,001 - 20,000
100,000
20,001 - 25,000
125,000
25,001 - 30,000
150,000
30,001 - 40,000
175,000
40,001 and above
200,000
B. The deposit prescribed by Subsection A of this section shall be held by the state treasurer in trust for the benefit and protection of persons covered by a prepaid dental plan.
C. Any securities within the description of Subsection A of this section, with the approval of the superintendent may be exchanged for similar securities or cash of equal amount. Interest on securities deposited shall be payable to the prepaid dental plan organization depositing such securities.
D. An unpaid final judgment arising from a membership coverage shall be a lien on the deposit described in Subsection A of this section, subject to execution after thirty days from the entry of final judgment. If the deposit is reduced, it shall be replenished within ninety days by the prepaid dental plan organization.
E. Upon liquidation or dissolution of a prepaid dental plan organization and the satisfaction of all its debts and liabilities, any balance remaining of the cash or securities deposit prescribed in Subsection A of this section, together with any other assets of the prepaid dental plan organization, shall be returned by the superintendent to the prepaid dental plan organization.
F. The deposit prescribed by Subsection A of this section shall not apply with respect to a prepaid dental plan organization which is funded by the federal, state or a municipal government or any political subdivision or body to the extent and for such period of time that the prepaid dental plan organization can demonstrate to the superintendent the presence of operational commitments from such sources equivalent to such deposit.
Laws 1984, ch. 127, § 885; 1993, ch. 320, § 104.
NMSA 1978, § 59A-48-7 Reserve requirement; exception
59A-48-7. Reserve requirement; exception
A. A prepaid dental plan organization at all times shall maintain for protection of the members a financial reserve consisting of two percent of prepaid charges collected from members for the plan, until such reserve totals five hundred thousand dollars ($500,000). Such reserve shall be in addition to the deposit prescribed by Section 885 [59A-48-6 NMSA 1978] of this article.
B. The reserve prescribed by Subsection A of this section shall not apply with respect to a prepaid dental plan organization which is funded by the federal, state or a municipal government or any political subdivision or body and meets the requirement of Subsection F of Section 885 of this article.
Laws 1984, ch. 127, § 886.
NMSA 1978, § 59A-48-8 Membership coverage
59A-48-8. Membership coverage
A. Every member in a prepaid dental plan shall be issued a membership coverage form by the prepaid dental plan organization.
B. Any contract applied for that provides family coverage shall, as to such coverage of individuals in the family, also provide that the benefits applicable for children shall be payable with respect to a newly-born child of the insured from the instant of such child's birth to the same extent that such coverage applies to other individuals in the family. If payment of a specific premium is required to provide coverage for a child, the contract may require that notification of birth of a newly-born child and payment of the required premium shall be furnished to the insurer within thirty-one (31) days after the date of birth in order to have the coverage continue beyond the thirty-one-day period.
C. No membership coverage or amendment shall be issued or delivered to any person in this state until a copy of the form of the membership coverage or amendment has been filed with and approved by the superintendent.
D. A membership coverage shall contain a clear and complete statement of a contract, or a reasonably complete summary if a certificate of contract, of:
(1) the prepaid dental services or other benefits to which the member is entitled under the prepaid dental plan;
(2) any limitations of the services, kinds of services or benefits to be provided, including any deductible or copayment feature;
(3) where and in what manner information is available as to how services may be obtained; and
(4) the member's obligation respecting charges for the prepaid dental plan.
E. A membership coverage shall contain no provisions or statements which are unjust, unfair, inequitable, misleading, deceptive or which encourage misrepresentation or which are untrue.
F. The superintendent shall approve any form of membership coverage if the requirements of Subsections D and E of this section are met and the prepaid dental plan is able in the judgment of the superintendent to meet its financial obligations under the membership coverage. It is unlawful to issue such form until approved. If the superintendent does not disapprove any such form within thirty (30) days after the filing, it shall be deemed approved. If the superintendent disapproves a form of membership coverage, the superintendent shall notify the prepaid dental plan organization, specifying the reasons for disapproval. The superintendent shall grant a hearing on such disapproval within fifteen (15) days after a request in writing is received from the prepaid dental plan organization.
Laws 1984, ch. 127, § 887.
NMSA 1978, § 59A-48-9 Examination of prepaid dental plan organization
59A-48-9. Examination of prepaid dental plan organization
A. The superintendent may once in each six (6) months for the first three (3) years after organization and once each year thereafter, or more often if deemed necessary by the superintendent or director of the health services division of the health and environmental [environment] department [department of health], visit each prepaid dental plan organization organized under the law of this state and examine its financial condition, its ability to meet its liabilities and its compliance with the laws of this state affecting the conduct of its business. The superintendent may annually visit and examine each prepaid dental plan organization not organized under the laws of this state but authorized to transact business in this state.
B. The superintendent may in like manner examine each prepaid dental plan organization applying for an initial certificate of authority to do business in this state.
C. In lieu of making an examination, the superintendent may accept a full report of the most recent examination of a foreign or alien prepaid dental plan organization, certified to by the appropriate examining official of another state.
D. The director of the health services division of the health and environment department [department of health] may participate in the examinations and visits described in this section to verify the existence of an effective prepaid dental plan and to review the delivery of services by the prepaid dental plan organization.
E. The examination and all related matters shall otherwise be subject to the applicable provisions of Article 4 [Chapter 59A, Article 4 NMSA 1978] (examination, hearings and appeals) of the Insurance Code.
Laws 1984, ch. 127, § 888.
NMSA 1978, § 59A-48-10 Annual report to superintendent
59A-48-10. Annual report to superintendent
A. Every prepaid dental plan organization annually on or before the first day of March shall file with the superintendent a report covering its activities for the preceding calendar year in form as prescribed by the superintendent, verified by at least two principal officers of the corporation. A copy of the report shall be sent by the prepaid dental plan organization to the department of health.
B. Such reports shall be on forms prescribed by the superintendent and shall include:
(1) an annual statement in accordance with the requirements of Section 59A-5-29 NMSA 1978 and a risk-based capital report in accordance with the requirements of Section 59A-5A-3 NMSA 1978;
(2) any material changes in the information;
(3) the number of persons who become members during the year, the number of members as of the end of the year and the number of memberships terminated during the year;
(4) the costs of all care provided and the number of units of care provided; and
(5) such other information relating to the performance of the prepaid dental plan organization as is necessary to enable the superintendent to carry out the duties prescribed by The [the] Prepaid Dental Plan Law.
C. The fee for filing the annual report shall be as specified in Section 59A-6-1 NMSA 1978.
Laws 1984, ch. 127, § 889; 2014, ch. 59, § 53.
NMSA 1978, § 59A-48-12 Operational expenses
59A-48-12. Operational expenses
No more than thirty percent of prepaid charges in the first year of operation, twenty-five percent in the second year of operation and twenty percent of prepaid charges in any subsequent year shall be used for the marketing and administrative expenses of a prepaid dental plan organization, including costs related to soliciting members and providers.
Laws 1984, ch. 127, § 891.
NMSA 1978, § 59A-48-13 Prohibited practices
59A-48-13. Prohibited practices
Article 16 [Chapter 59A, Article 16 NMSA 1978] of the Insurance Code relating to unfair trade practices and frauds shall apply to prepaid dental plan organizations, except as to the extent the superintendent determines that the nature of prepaid dental plan organizations render particular provisions of such law inappropriate.
Laws 1984, ch. 127, § 892.
NMSA 1978, § 59A-48-14 Agents and solicitors
59A-48-14. Agents and solicitors
Solicitation of memberships in a prepaid dental plan shall be conducted by agents duly appointed by the dental plan organization or solicitors duly appointed by such agents, while licensed as such agents or solicitors under the same provisions and requirements of Articles 11 [Chapter 59A, Article 11 NMSA 1978] (licensing procedures) and 12 [Chapter 59A, Article 12 NMSA 1978] (insurance agents, brokers and solicitors) of the Insurance Code as apply to health insurance agents and solicitors. The fees for such licensing shall be the same as for such insurance agents and as specified in Section 101 [59A-6-1 NMSA 1978] (fee schedule) and Paragraph I of Section 185 [59A-11-6 NMSA 1978] of the Insurance Code.
Laws 1984, ch. 127, § 893.
NMSA 1978, § 59A-48-15 Suspension or revocation of certificate of authority
59A-48-15. Suspension or revocation of certificate of authority
A. The superintendent may suspend or revoke any certificate of authority of a prepaid dental plan organization if he finds that any of the following conditions exist:
(1) the prepaid dental plan organization is operating contrary to its basic organizational documents or in a manner contrary to that described in, and reasonably inferred from, any other information submitted pursuant to Section 883 [59A-48-4 NMSA 1978] of this article;
(2) the prepaid dental plan organization issued membership coverage which does not comply with the requirements of Section 887 [59A-48-8 NMSA 1978] of this article;
(3) the prepaid dental plan does not provide or arrange for basic dental services appropriate to such plan as determined by the director of the health services division of the health and environment department [department of health];
(4) the prepaid dental plan organization can no longer be expected to meet the obligations to members or prospective members;
(5) the prepaid dental plan organization, or any authorized person on its behalf, has advertised or merchandized [merchandised] its services in an untrue, misleading, deceptive or unfair manner; or
(6) the prepaid dental plan organization has failed to substantially comply with this article or any rules and regulations promulgated thereunder.
B. When the certificate of authority of a prepaid dental plan organization is suspended the organization shall not, during the period of such suspension, accept any additional members except newborn children or other newly acquired dependents of existing members and shall not engage in any advertising or solicitation.
C. When the certificate of authority of a prepaid dental plan organization is revoked, such organization shall proceed immediately following the effective date of the order of revocation, to conclude its affairs and shall conduct no further business except as may be essential to the orderly conclusion of solicitation. The superintendent by written order, may permit such further operation of the organization as the superintendent finds to be in the best interest of members to the end that members shall be afforded the greatest practical opportunity to obtain continuing prepaid dental plan coverage.
D. Notwithstanding the provisions of Subsections B and C of this section, a prepaid dental plan organization which has had its certificate of authority denied, suspended or revoked, or has suffered an adverse decision by the superintendent shall be entitled to a hearing pursuant to Article 4 [Chapter 59A, Article 4 NMSA 1978] (examinations, hearings and appeals) of the Insurance Code.
Laws 1984, ch. 127, § 894.
NMSA 1978, § 59A-48-16 Approval of advertising and sales material
59A-48-16. Approval of advertising and sales material
A. The prepaid dental plan organization shall prior to use thereof file with the superintendent for his approval all advertising and sales material proposed to be used by it, through agents, solicitors, or otherwise, in advertising solicitation or sale of membership coverage to be offered by such organization.
B. Within thirty (30) days after such filing the superintendent shall either approve or disapprove the advertising matter or sales material so filed; and if not disapproved within such period or within such extension of not to exceed an additional thirty (30) days as may be requested by the superintendent and communicated by him in writing to the prepaid dental plan organization, the advertising matter and sales material shall be deemed approved.
C. The superintendent shall disapprove any such advertising matter or sales material if found by him to be in whole or part untrue, deceptive, misleading, or conducive to misrepresentation.
D. The superintendent may withdraw any previous approval, or negate any prior failure to disapprove within the applicable period, as to any advertising matter or sales material found by him to be subject to disapproval on any of the grounds stated in this section. Any such withdrawal of a prior approval or negation of prior failure to disapprove, shall allow a reasonable period for withdrawal of the advertising matter or sales material involved.
E. Any such disapproval, withdrawal, or negation shall be by the superintendent's order stating the grounds therefor.
F. No prepaid dental plan organization and no representative thereof shall use or permit to be outstanding, any advertising matter or sales material as to which the superintendent's disapproval then exists. In addition to other applicable penalties for violation of this section, the superintendent may without additional cause withdraw approval of any membership coverage or other form as to which such advertising or sales material is used.
Laws 1984, ch. 127, § 895.
NMSA 1978, § 59A-48-17 Solicitation not violation of certain laws relating to providers
59A-48-17. Solicitation not violation of certain laws relating to providers
Solicitation by prepaid dental plan organizations or anyone acting on their behalf to educate members and potential members of the coverage and operation of the organization's plan shall not be construed to be a violation of any provisions of law relating to solicitation or advertising by prepaid dental plan providers, if such solicitation including advertising and sales material:
A. is approved in advance by the superintendent as provided for in Section 895 [59A-48-16 NMSA 1978] of this article;
B. does not identify the providers nor describe their professional qualifications, except upon the request of the person being solicited;
C. does not describe the professional experience or attainments of such providers individually or as a group or contain language that directly or indirectly states, evaluates or lauds the professional competence, skills or reputations of such providers; and
D. shall not otherwise cause any of such providers to violate any professional ethics or laws prohibiting the solicitation of patients, except as permitted in this article.
Laws 1984, ch. 127, § 896.
NMSA 1978, § 59A-48-18 Conservation, rehabilitation, liquidation
59A-48-18. Conservation, rehabilitation, liquidation
Any conservation, rehabilitation or liquidation of a prepaid dental plan organization shall be deemed to be that of an insurer and shall be conducted pursuant to Article 41 [Chapter 59A, Article 41 NMSA 1978] of the Insurance Code.
Laws 1984, ch. 127, § 897.
NMSA 1978, § 59A-48-19 Other provisions applicable
59A-48-19. Other provisions applicable
In addition to those referred to in Chapter 59A, Article 48 NMSA 1978, the following articles and provisions of the Insurance Code [Chapter 59A NMSA 1978] shall also apply, to the extent reasonably applicable and subject to the provisions of that article, as to prepaid dental plan organizations, their sponsors, directors, officers, personnel and representatives and member contracts. For the purposes of this provision, such organizations may be referred to as "insurers" and such contracts as "policies":
A. Chapter 59A, Article 1 NMSA 1978;
B. Chapter 59A, Article 2 NMSA 1978;
C. Chapter 59A, Article 4 NMSA 1978;
D. Subsection C of Section 59A-5-22 NMSA 1978;
E. Section 59A-5-33 NMSA 1978;
F. Sections 59A-6-1, 59A-6-3, 59A-6-4 and 59A-6-6 NMSA 1978;
G. Section 59A-7-11 NMSA 1978 [repealed];
H. Chapter 59A, Article 8 NMSA 1978;
I. Chapter 59A, Article 10 NMSA 1978;
J. Section 59A-12-22 NMSA 1978;
K. the Insurance Fraud Act [Chapter 59A, Article 16C NMSA 1978];
L. Chapter 59A, Article 18 NMSA 1978;
M. the Policy Language Simplification Law [Chapter 59A, Article 19 NMSA 1978];
N. Section 59A-34-10 NMSA 1978, as to domestic prepaid dental plans; and
O. The Insurance Holding Company Law [Chapter 59A, Article 37 NMSA 1978].
Laws 1984, ch. 127, § 898; 2001, ch. 297, § 7; 2007, ch. 282, § 12.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18562/index.doFetched: 10/20/2026