On November 9, 2021 the New Mexico Superintendent of Insurance, Russell Toal, issued Bulletin 2021-024. The Bulletin was issued in accordance with Crutcher v. Liberty Mut. Ins. Co., NMSC Docket No. S-1-SC-37478. The case summary focused on adequate explanation to the policyholder regarding minimum limits for UM/UIM. Only if an insurer provides the proper explanation (Disclosure / Exclusion) may they charge a premium for minimum underinsurance coverage.
This bulletin requires all automobile insurers covering risks located in New Mexico to adopt, on an immediate basis, a UM/UIM Disclosure and a UIM Exclusion for use in every current and future automobile policy. If an insurer provides adequate disclosure, it may lawfully charge a premium for such coverage (e.g., minimum UM/UIM limits). The requirements vary slightly based on language used:
Unaltered OSI Language – Using the exact Disclosure and Exclusion language provided by the New Mexico Office of Superintendent of Insurance (“OSI”).
- Develop and distribute the new Disclosure and Exclusion to all existing policyholder as soon as practicable, but not later than December 9, 2021.
- File the new Disclosure and Exclusion in SERFF as “use and file” no later than February 7, 2022.
Altered OSI or Proprietary Language – Modifying any of the OSI Disclosure and Exclusion language or drafting complete proprietary language.
- Develop and file the new Disclosure and Exclusion in SERFF in accordance with the normal form review process set forth in NMSA 1978, § 59A-18-12 and OSI rules, and the normal sixty (60) day statutory review period shall apply.
- Distribute the new Disclosure and Exclusion to all existing policyholders as soon as practicable, but not later than thirty (30) days, after the OSI approves the language or after the end of the sixty (60) day statutory period, whichever occurs first.
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Whether you need help drafting the Disclosure and Exclusion, revising your rules or submitting required filings, the experts at Perr&Knight can provide immediate and efficient assistance.