ANNUAL RATE AND FORM FILING FEES OWED PURSUANT TO NMSA 1978, 59A-6-1.2

# STATE OF NEW MEXICO ## OFFICE OF SUPERINTENDENT OF INSURANCE DEPUTY SUPERINTENDENT Robert E. Doucette, Jr. NM OFFICE OF SUPERINTENDENT OF INSURANCE 2019 APR 17 AM 10: FILED  OFFICE OF SUPERINTENDENT OF INSURANCE SUPERINTENDENT OF INSURANCE John G. Franchini DEPUTY SUPERINTENDENT Bryan E. Brock BULLETIN 2019-004 April 15, 2019 TO: ALL INSURANCE COMPANIES TRANSACTING INSURANCE IN NEW MEXICO RE: ANNUAL RATE AND FORM FILING FEES OWED PURSUANT TO NMSA 1978, § 59A-6-1.2 THE FOLLOWING BULLETIN is issued pursuant to NMSA 1978, § 59A-2-8, and 13.1.2.1 to 13.12.10 NMAC. NMSA 1978, § 59A-6-1.2 provides: The annual filing fee for rates and forms due in advance on July 1 for each company in the following groupings shall be equal to the product produced by multiplying three thousandths by the company's previous calendar year's direct written premium as shown on its annual financial statement, but not to exceed an amount of one thousand five hundred dollars ($1,500) and not to be less than an amount of one hundred dollars ($100): - A. private passenger automobile--liability and physical damage; - B. homeowner's and farm owners'; - C. workers' compensation; - D. other casualty, including surety and fidelity; and - E. other property. The statute has not been amended since 2001. Prior to July 1, 2017, the lines and types of authority identified in NMSA 1978, § 59A-6-1.2 corresponded with the statutes that defined lines and types of insurance. Those included: NMSA 1978, § 59A-7-4. – Defining "Property" insurance; Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 2 NMSA 1978, § 59A-7-5 – Defining “Marine and transportation” and “wet marine” insurance; NMSA 1978, § 59A-7-6 – Defining “Casualty” insurance; Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 2 NMSA 1978, § 59A-7-5 – Defining “Marine and transportation” and “wet marine” insurance; NMSA 1978, § 59A-7-6 – Defining “Casualty” insurance; NMSA 1978, § 59A-7-8 – Defining “Surety” insurance; and NMSA 1978, § 59A-7-9 – Defining “Title” insurance. Under the statutes as they existed prior to July 1, 2017, Title was a distinct line that was not obligated to pay a fee under NMSA 1978, § 59A-6-1.2. Pursuant to SB108, which went into effect on July 1, 2017, NMSA 1978, §§ 59A-7-5, 8 and 9 were repealed, and NMSA 1978, §§ 59A-7-1, 4 and 6 were significantly amended. Among the changes, the “Title” line authority that previously was a stand-alone line under NMSA 1978, § 59A-7-9 was added as a type of insurance under the “Casualty” line. See NMSA 1978, § 59A-7-6(A)(53). Because of that change, title insurance companies have questioned whether they are obligated to pay the fees imposed by NMSA 1978, §59A-6-1.2, in addition to the fees imposed by NMSA 1978, § 59A-30-12. Insurers who write business in multiple lines identified in NMSA 1978, §§ 59A-7-1, 4 and 6, have questioned how filing fees should be calculated. This bulletin answers these questions. ## TITLE FEES NMSA 1978, § 59A-6-1.2(D) unambiguously requires filing fees to be paid by any insurer that writes any “other” type of “casualty” insurance. The superintendent reads this to mean any type of “casualty” insurance in addition to those identified elsewhere in NMSA 1978, § 59A-6-1.2. Under NMSA 1978, § 59A-7-6(A)(53), “title” is now a type of “casualty” insurance. It follows that a title insurer must pay filing fees under NMSA 1978, § 59A-6-1.2. This fee is in addition to any fee imposed under NMSA 1978, § 59A-30-12. That statute provides: he superintendent reads this to mean any type of “casualty” insurance in addition to those identified elsewhere in NMSA 1978, § 59A-6-1.2. Under NMSA 1978, § 59A-7-6(A)(53), “title” is now a type of “casualty” insurance. It follows that a title insurer must pay filing fees under NMSA 1978, § 59A-6-1.2. This fee is in addition to any fee imposed under NMSA 1978, § 59A-30-12. That statute provides: The superintendent shall determine a rate of assessment and collect a maintenance fee in an amount not to exceed one percent of the correctly reported gross title insurance premiums on policies written in New Mexico of all authorized title insurers. The fee required by this section is in addition to all other taxes and fees now imposed or that may be subsequently imposed and that are not in conflict with this article. The superintendent, after taking into account the unexpended funds produced by this fee, if any, shall adjust the rate of assessment each year to produce the amount of funds that he estimates will be necessary to pay all the expenses of regulating the business of title insurance during the Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 3 succeeding year. The superintendent in promulgating premium rates shall take into account assessments made under this section. As the emphasized language in this statute makes clear, fees imposed under NMSA 1978, § 59A-30-12 are in addition to “all other taxes and fees now imposed or that may be subsequently imposed and that are not in conflict with this article.” No part of Article 30 of Chapter 59A conflicts with NMSA 1978, § 59A-6-1.2. It follows that title insurers owe fees imposed under that statute and under NMSA 1978, § 59A-30-12. d language in this statute makes clear, fees imposed under NMSA 1978, § 59A-30-12 are in addition to “all other taxes and fees now imposed or that may be subsequently imposed and that are not in conflict with this article.” No part of Article 30 of Chapter 59A conflicts with NMSA 1978, § 59A-6-1.2. It follows that title insurers owe fees imposed under that statute and under NMSA 1978, § 59A-30-12. SB364, which was introduced in the 2019 Regular Session of the New Mexico Legislature, proposed codifying an express exemption from NMSA 1978, § 59A-6-1.2 fees for Title insurers. The veto of that bill leaves the current laws in effect, under which Title insurers are not exempt from paying fees due under NMSA 1978, § 59A-6-1.2. ### FEE CALCULATION NMSA 1978, § 59A-6-1.2 identifies five groupings, or lines, of insurance for which fees must be calculated and paid. That statute further expresses a method of calculating the fee “for each company in the following groupings * * *.” The superintendent construes this to mean that a multi-line company that writes business in more than one grouping must pay the specified fee based on the premium written for product in that grouping. The legislature did not intend to limit the maximum fee owed by a multi-line company to $1,500. Rather, the legislature intended a multi-line company to be treated as if it were several single-line companies that would owe up to $1,500 of fees in each grouping or line. Insurers who report premiums written on NAIC form “EXHIBIT PREMIUMS WRITTEN – 008” shall use the following chart to determine the grouping(s) for which fees are owed: | Category | Line of Business | | --- | --- | | A | 19.1 Private passenger auto no-fault (personal injury protection) | | | 19.2 Other private passenger auto liability | | | 21.1 Private passenger auto physical damage | | B | 3 Farmowners multiple peril | | | 4 Homeowners multiple peril | | C | 16 Workers' compensation | Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 tegory | Line of Business | | --- | --- | | A | 19.1 Private passenger auto no-fault (personal injury protection) | | | 19.2 Other private passenger auto liability | | | 21.1 Private passenger auto physical damage | | B | 3 Farmowners multiple peril | | | 4 Homeowners multiple peril | | C | 16 Workers' compensation | Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 4 | D | 5.2 | Commercial multiple peril (liability portion) | | --- | --- | --- | | 6 | Mortgage guaranty | | 10 | Financial guaranty | | 11.1 | Medical professional liability | | 17.1 | Other liability - occurrence | | 17.2 | Other liability - claims-made | | 17.3 | Excess workers' compensation | | 18 | Products liability | | 19.3 | Commercial auto no-fault (personal injury protection) | | 19.3 | Other commercial auto liability | | 21.2 | Commercial auto physical damage | | 22 | Aircraft (all perils) | | 23 | Fidelity | | 24 | Surety | | 30 | Warranty | | 34 | Aggregate write-ins for other lines of business (Includes Title Direct Operations & Agency Operations) | | E | 1 | Fire | | 2.1 | Allied lines | | 2.2 | Multiple peril crop | | 2.4 | Private crop | | 2.5 | Private flood | | 5.1 | Commercial multiple peril (non-liability portion) | | 8 | Ocean marine | | 9 | Inland marine | | 12 | Earthquake | | 26 | Burglary and theft | | 27 | Boiler and machinery | | 28 | Credit | Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 5 | 9 | Inland marine | | 12 | Earthquake | | 26 | Burglary and theft | | 27 | Boiler and machinery | | 28 | Credit | Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us BULLETIN 2019-004 Page | 5 All other insurers, including Title insurers, shall report premiums written, and pay fees, according to the statutory line of business/grouping(s) identified below: A. private passenger automobile--liability and physical damage; 59A-7-1(C)(3) & (4) 59A-7-6(A)(3) B. homeowner's and farm owners'; 59A-7-4(R) 59A-7-6(A)(22) C. workers' compensation; 59A-7-6(A)(55) D. other casualty, including surety and fidelity; 59A-7-6(A)(1), (2), (4)-(21), (23)-(54), and (56) E. other property. 59A-7-4(A)-(Q), and (S)-(CC). All insurers shall report premiums written in each grouping, and shall remit a minimum fee of $100 and a maximum fee of $1,500 based on premium written in each grouping. If you have questions regarding this bulletin, please contact Ashley Hernandez, Property and Casualty Bureau Chief, at 505-827-4593, or via email to Ashley.Hernandez@state.nm.us. DONE AND ORDERED this 17th day of April, 2019 JOHN G. FRANCHINI Superintendent of Insurance Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 Main Phone: (505) 827-4601 | Satellite Phone: (505) 322-2186 | Toll Free: (855) 4 - ASK - OSI www.osi.state.nm.us