NMSA 1978, § 59A-16C-1 Short title
59A-16C-1. Short title
Chapter 59A, Article 16C NMSA 1978 may be cited as the "Insurance Fraud Act".
Laws 1998, ch. 115, § 1; 2018, ch. 42, § 1.
Insurance Fraud
NMSA 1978 ch. 59A, art. 16C
in effectNMSA 1978, § 59A-16C-2 Findings; purpose
59A-16C-2. Findings; purpose
A. The legislature finds that insurance fraud is pervasive and expensive, and has the potential for increasing premium rates, placing businesses at risk, reducing the ability of consumers to raise their standard of living and decreasing the economic vitality of the state. Therefore, the legislature believes that the state must aggressively confront the problem of insurance fraud.
B. The purpose of the Insurance Fraud Act is to permit the full utilization of the expertise of the superintendent of insurance to investigate and detect insurance fraud more effectively, to halt insurance fraud and to work with state, local and federal law enforcement and regulatory agencies against the commission of insurance fraud.
Laws 1998, ch. 115, § 2.
NMSA 1978, § 59A-16C-3 Definitions
59A-16C-3. Definitions
As used in the Insurance Fraud Act:
A. "fund" means the insurance fraud fund;
B. "insurance fraud" means any act or practice in connection with an insurance transaction that constitutes a crime under the Criminal Code or the Insurance Code;
C. "insurance transaction" means any act or practice relating to insurance and includes complying with the Insurance Code or any rule adopted under its authority; and
D. "superintendent" means the superintendent of insurance.
Laws 1998, ch. 115, § 3.
NMSA 1978, § 59A-16C-4 Superintendent's duties
59A-16C-4. Superintendent's duties
The superintendent shall:
A. initiate inquiries and conduct investigations when the superintendent has reason to believe that insurance fraud may have been or is being committed;
B. respond to notifications or complaints of suspected insurance fraud generated by state and local police or other law enforcement authorities and governmental units, including the federal government and any other person;
C. review notices and reports of insurance fraud submitted by authorized insurers, their employees, agents or producers or by public adjusters and select those incidents of alleged fraud that, in the superintendent's judgment, require further investigation and conduct the investigations;
D. conduct independent investigations and examinations of insurance transactions and alleged insurance fraud, conduct studies to determine the extent of insurance fraud, deceit or intentional misrepresentation of any kind in the insurance process and publish information and reports on the office of superintendent of insurance's examinations and studies;
E. report incidents of alleged insurance fraud supported by investigations and examinations to the appropriate district attorney and any other appropriate law enforcement, administrative, regulatory or licensing agency and assemble evidence, prepare charges and otherwise assist any prosecutorial authority having jurisdiction over insurance fraud enforcement;
F. assist any official or agency of this state, any other state or the federal government that requests assistance in investigating insurance fraud;
G. maintain records and information in order to produce an annual report of the superintendent's activities undertaken in connection with carrying out the provisions of the Insurance Fraud Act;
H. conduct, in cooperation with the attorney general and the department of public safety, public outreach and awareness programs on the costs of insurance fraud to the public and how members of the public can assist themselves, the superintendent and law enforcement officials in preventing and prosecuting insurance fraud; and
I. assign staff and maintain the automobile theft prevention authority.
Laws 1998, ch. 115, § 4; 2017, ch. 76, § 12; 2018, ch. 42, § 3.
NMSA 1978, § 59A-16C-5 Superintendent's authority
59A-16C-5. Superintendent's authority
The superintendent may:
A. select and contract with investigative personnel and prosecutors to discharge the superintendent's duties pursuant to the provisions of the Insurance Fraud Act;
B. conduct statewide investigations and prosecutions related to automobile theft;
C. coordinate with law enforcement agencies to investigate and with the attorney general and district attorneys to prosecute cases involving stolen vehicles and insurance fraud; and
D. promulgate rules relating to the creation and operation of the automobile theft prevention authority.
Laws 1998, ch. 115, § 5; 2018, ch. 42, § 4.
NMSA 1978, § 59A-16C-6 Notice and cooperation required; tolling period
59A-16C-6. Notice and cooperation required; tolling period
A. Every insurer or licensed insurance professional that has a reasonable belief that an act of insurance fraud will be, is being or has been committed shall furnish and disclose knowledge and information about it to the superintendent and shall cooperate fully with any investigation conducted by the superintendent. Failure to comply with this subsection shall constitute grounds for the superintendent to impose an administrative penalty pursuant to Section 59A-1-18 NMSA 1978 in addition to any applicable suspension, revocation or denial of a license or certificate of authority.
B. A person who has a reasonable belief that an act of insurance fraud will be, is being or has been committed, or any person who collects, reviews or analyzes information concerning insurance fraud, may furnish and disclose any information in his possession concerning the insurance fraud to the superintendent or to an authorized representative of an insurer that requests the information for the purpose of detecting, prosecuting or preventing insurance fraud.
C. If an insurer has a reasonable belief or probable cause to believe that an insurance fraud has been committed and has properly notified the superintendent of its suspicion, that notification shall toll any applicable time period in any unfair claims proceeding based on the alleged fraud until thirty days after determination by the superintendent and notice to the insurer that the superintendent will not recommend action on the claim. The determination by the superintendent shall not be admissible in any subsequent civil proceeding.
D. The superintendent, in cooperation with insurers or others, may establish a voluntary fund to reward persons not connected with the insurance industry who provide information or furnish evidence leading to the arrest and conviction of persons responsible for insurance fraud.
Laws 1998, ch. 115, § 6.
NMSA 1978, § 59A-16C-7 Immunity from civil liability; private insurance fraud reports and enforcement actions
59A-16C-7. Immunity from civil liability; private insurance fraud reports and enforcement actions
A. The provisions of Section 59A-4-21 NMSA 1978 regarding immunity from civil liability for enforcement actions performed in good faith by the superintendent, his authorized representatives and examiners shall apply to the Insurance Fraud Act.
B. Except when a person intentionally communicates false information he actually believes to be false, a person shall not be subject to liability by virtue of reporting or furnishing, orally or in writing, information concerning suspected, anticipated or completed insurance fraud acts when the report or information is provided to:
(1) the department of insurance, the superintendent or law enforcement agencies, their officials, agents or employees;
(2) the national association of insurance commissioners, a federal or state governmental agency or office established to detect and prevent insurance fraud, any other organization established for the same purpose and their agents, employees or designees; or
(3) the anti-fraud unit of an insurer.
C. A person identified in Subsection B of this section or any of the person's officers, employees or agents when performing authorized activities, including the publication or dissemination of any related bulletin or reports, shall not be subject to civil liability for libel, slander or any other relevant tort or a civil cause of action of any nature, except if the person, officer, employee or agent intentionally communicates false information he actually believes to be false.
D. This section shall not abrogate or modify in any way any privilege or immunity recognized by common law or statute.
E. The court shall award attorney fees and costs to any person identified in Subsection B of this section or any of that person's officers, employees or agents who is a prevailing party in a civil cause of action against him for libel, slander or any other relevant tort arising out of conduct pursuant to the Insurance Fraud Act if the party bringing the action was not substantially justified in bringing such action. For the purposes of this subsection, "substantially justified" means having a reasonable basis in law or fact at the time a proceeding was initiated.
F. The relief provided in this section is in addition to remedies otherwise available against the same conduct under the common law or other laws of this state.
Laws 1998, ch. 115, § 7.
NMSA 1978, § 59A-16C-8 Warning required
59A-16C-8. Warning required
Within six months of the effective date of the Insurance Fraud Act all claim forms and applications for insurance shall contain a statement permanently affixed to the application or claim form which states substantially as follows:
"ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO CIVIL FINES AND CRIMINAL PENALTIES."
The failure to include that statement shall not constitute a defense against prosecution for commission of insurance fraud.
Laws 1998, ch. 115, § 8.
NMSA 1978, § 59A-16C-9 Report of conviction
59A-16C-9. Report of conviction
If any person licensed by any agency of any state or the federal government or holding credentials from any professional organization is convicted of insurance fraud in this state, the superintendent shall notify the appropriate licensing or credentialing authority of the judgment for appropriate disciplinary action.
Laws 1998, ch. 115, § 9.
NMSA 1978, § 59A-16C-10 Insurer anti-fraud initiatives; special investigative units
59A-16C-10. Insurer anti-fraud initiatives; special investigative units
A. Within six months of the effective date of the Insurance Fraud Act and by July 1 of each succeeding year every insurer who in the previous calendar year reported ten million dollars ($10,000,000) or more in direct written premiums in New Mexico shall establish, prepare, implement and submit to the superintendent an anti-fraud plan that is reasonably calculated to detect, prosecute and prevent insurance fraud. Any subsequent amendments to the plan shall be submitted to the superintendent at the time they are adopted.
B. Each insurer's anti-fraud plan shall outline, at a minimum, guidelines appropriate to the type of insurance the insurer writes, to:
(1) prevent, detect and investigate all forms of insurance fraud;
(2) educate appropriate employees on fraud detection and the insurer's anti-fraud plan;
(3) provide for the hiring or contracting of fraud investigators;
(4) report insurance fraud to appropriate law enforcement and regulatory authorities; and
(5) pursue restitution, where appropriate, for financial loss caused by insurance fraud.
C. The superintendent may review each insurer's anti-fraud plan to determine if it adequately complies with the requirements of this section. The superintendent may examine the insurer to assure its compliance with anti-fraud plans submitted to the superintendent. The superintendent may require reasonable modifications to the insurer's anti- fraud plan or may require other reasonable remedial action if the review or examination reveals substantial noncompliance with the plan.
D. The superintendent may require each insurer to file a summary of the insurer's anti-fraud activities and results. Anti-fraud plans and summaries submitted to the superintendent shall be privileged and confidential, shall not be a public record and shall not be subject to discovery or subpoena in any civil or criminal action; provided, however, that the superintendent may make summaries of aggregate data available to the public.
E. This section confers no private right of action.
Laws 1998, ch. 115, § 10.
NMSA 1978, § 59A-16C-11 Investigators' powers
59A-16C-11. Investigators' powers
A. The superintendent's investigators shall be peace officers pursuant to the provisions of Chapter 29, Article 1 NMSA 1978.
B. An investigator who meets the requirements for certification for law enforcement training pursuant to Section 29-7-6 NMSA 1978 shall be authorized to carry a firearm.
Laws 1998, ch. 115, § 11; 2005, ch. 245, § 1.
NMSA 1978, § 59A-16C-12 Attorney general's duties
59A-16C-12. Attorney general's duties
When so requested by the superintendent, the attorney general shall commission as a special assistant attorney general any attorney employed by the superintendent or contracted with by the superintendent and approved by the attorney general to assist the superintendent in carrying out his duties, including providing legal advice and prosecuting offenders. The actual costs associated with the assignment of assistant attorneys general to the superintendent shall be paid out of the fund.
Laws 1998, ch. 115, § 12.
NMSA 1978, § 59A-16C-13 Insurance fraud policy advisory group
59A-16C-13. Insurance fraud policy advisory group
The superintendent may create an insurance fraud policy advisory group consisting of representatives of authorized insurers, consumers of insurance products not otherwise connected with the insurance industry and other appropriate persons. The superintendent shall appoint the members of the advisory group and shall provide by rule for the creation, governance, duties and termination of the advisory group. Any advisory group so created shall advise the superintendent with respect to the implementation of and other matters related to the Insurance Fraud Act when so requested by the superintendent.
Laws 1998, ch. 115, § 13.
NMSA 1978, § 59A-16C-14 Insurance fraud fund created; appropriation
59A-16C-14. Insurance fraud fund created; appropriation
A. There is created an "insurance fraud fund" in the state treasury. All fees collected pursuant to the provisions of the Insurance Fraud Act shall be deposited in the fund and are subject to appropriation for use in paying the expenses incurred by the superintendent in carrying out the provisions of the Insurance Fraud Act. Interest on the fund shall be credited to the fund. The fund is a continuing, nonreverting fund.
B. To implement the provisions of the Insurance Fraud Act, the superintendent shall determine a rate of assessment and collect a fee from authorized insurers in an amount not less than two hundred dollars ($200) and not exceeding one-tenth of one percent of the correctly reported direct written premiums on policies written in New Mexico by the authorized insurers. The fee shall be due annually pursuant to rules promulgated by the superintendent. The failure of an insurer to pay this fee when due shall subject the insurer to a penalty of one thousand dollars ($1,000) per month or part thereof in which the fee remains unpaid. The superintendent, after taking into account unexpended money produced by collection of the fee, shall adjust the rate of assessment each year to produce the amount of money that the superintendent estimates will be necessary to pay expenses incurred by the superintendent in carrying out the provisions of the Insurance Fraud Act.
C. In calculating the direct written premiums for an insurer pursuant to the provisions of this section, all direct written premiums for workers' compensation insurance and for all types of insurance that are exempted by federal law shall be excluded from the calculation.
D. The fees required by this section are in addition to all other taxes and fees now imposed or that may be subsequently imposed.
Laws 1998, ch. 115, § 14; 1999, ch. 131, § 1; 2017, ch. 130, § 13.
NMSA 1978, § 59A-16C-15 Application of act to other acts
59A-16C-15. Application of act to other acts
A. No authority granted the superintendent under the Insurance Fraud Act shall be construed to abrogate or interfere with the authority of the safety and fraud division of the workers' compensation administration under the Workers' Compensation Act [Chapter 52, Article 1 NMSA 1978] or of the medicaid fraud control unit under the Medicaid Fraud Act [Chapter 30, Article 44 NMSA 1978].
B. Nothing in the Insurance Fraud Act shall:
(1) preempt the authority of or relieve the duty of any other law enforcement agencies to investigate and prosecute alleged violations of law;
(2) prevent or prohibit a person from voluntarily disclosing any information concerning insurance fraud to any law enforcement agency;
(3) limit any of the powers granted elsewhere by law to the superintendent to investigate alleged violations of law and take appropriate action; or
(4) interfere with the duties and authority of the workers' compensation administration.
Laws 1998, ch. 115, § 15.
NMSA 1978, § 59A-16C-16 Rules
59A-16C-16. Rules
The superintendent may promulgate rules deemed necessary or appropriate by the superintendent for the administration of the Insurance Fraud Act.
Laws 1998, ch. 115, § 16.
NMSA 1978, § 59A-16C-17 Automobile theft prevention authority; created; board; powers; duties
59A-16C-17. Automobile theft prevention authority; created; board; powers; duties
A. The "automobile theft prevention authority" is created in the office of superintendent of insurance. The automobile theft prevention authority shall be governed by a board of directors. The board shall consist of nine members as follows:
(1) the superintendent;
(2) the director of the administrative office of the district attorneys or the director's designee; and
(3) seven members appointed by the superintendent as follows:
(a) four representatives from different insurance companies who are authorized by the office of superintendent of insurance to issue motor vehicle insurance policies in New Mexico;
(b) two representatives from different law enforcement agencies; and
(c) a representative from the public.
B. Prior to August 1, 2018, the appointing authorities shall appoint all initial members of the board. Board members shall serve six-year terms; except that of the initial members representing insurance companies appointed to the board, the superintendent shall select one member whose initial term is four years and one member whose initial term is two years; and of the initial members representing law enforcement agencies appointed to the board, the superintendent shall select one member whose initial term is two years. The initial public member shall serve an initial term of four years.
C. No appointed member shall serve more than two terms. If a member fails to complete the member's term, the member shall be replaced as soon as practicable by the original appointing authority.
D. Board members shall serve without compensation.
E. The authority shall solicit, review and approve applications for grants to improve and support automobile theft prevention programs or programs for the enforcement or prosecution of automobile theft crimes. The authority shall give priority to applications representing multi-jurisdictional programs. Each application, at a minimum, shall describe the type of theft prevention, enforcement or prosecution program to be implemented.
F. In selecting grant recipients, when practicable, the authority shall award grants to law enforcement agencies.
G. The authority shall not require as a condition of the award of a grant that an agency or political subdivision provide other funding to operate an automobile theft prevention program or a program for the enforcement or prosecution of automobile theft crimes.
H. On or before December 1 of every year, a law enforcement agency that received a grant pursuant to this section in the previous twelve months shall submit a report to the authority concerning the implementation of the program funded through the grant.
I. On or before November 1 of every year, the authority shall report to the appropriate interim legislative committee on the implementation of the programs receiving grants pursuant to this section. The report to the committee shall include:
(1) the number and geographic jurisdiction of law enforcement agencies that received grants under the authority and the amount and duration of the grants;
(2) the change in the number of automobile thefts in areas of the state; and
(3) recommendations for legislative changes to assist in the prevention, enforcement and prosecution of automobile-theft-related criminal activities.
J. On or before November 1 of every year, the authority shall report to the legislative finance committee on the finances of the authority.
K. The authority may seek and receive grant funding from federal, state or local governments or private philanthropic organizations to defray the costs of operating automobile theft prevention programs or programs for the enforcement or prosecution of automobile theft crimes.
L. A law enforcement agency may apply for grants to assist in improving and supporting automobile theft prevention programs or programs for the enforcement or prosecution of automobile theft crimes through statewide planning and coordination.
Laws 2018, ch. 42, § 2.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18562/index.doFetched: 10/20/2026