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.  OFFICE OF NEW MEXICO SUPERINTENDENT OF INSURANCE SUPERINTENDENT OF INSURANCE John G. Franchini DEPUTY SUPERINTENDENT Bryan E. Brock FILED 2019 MAY 13 PM 2:02 NM OFFICE OF SUPERINTENDENT OF INSURANCE Bulletin 2019-008 May 13, 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. This Bulletin supplements, and, therefore, replaces Bulletin 2019-004. 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. 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 2019-008 Page | 2 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: 00, 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 2019-008 Page | 2 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; - 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 those questions. ## TITLE FEES ecause 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 those 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: 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 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 2019-008 Page | 3 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 succeeding year w 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 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. 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. at 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: 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 2019-008 Page | 4 # **Category** **Line of Business** A. **private passenger automobile – liability and physical damage** 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. **homeowner's and farm owners'** 3 Farmowners multiple peril 4 Homowners multiple peril C. **worker's compensation** 16 Workers' compensation D. **other casualty, including surety and fidelity** 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) 19.4 Other commercial auto liability 23 Fidelity 24 Surety 26 Burglary and theft 27 Boiler and machinery 28 Credit 30 Warranty 34 Aggregate write-ins for other lines of business Title (Direct Operations + Agency Operation) Mexican Casualty Insures E. **Other property** 1 Fire Main Office: 1120 Paseo de Peralta, Room 428, Santa Fe, NM 87501 Satellite Office: 6200 Uptown Blvd NE, Suite 100, Albuquerque, NM 87110 cial auto liability 23 Fidelity 24 Surety 26 Burglary and theft 27 Boiler and machinery 28 Credit 30 Warranty 34 Aggregate write-ins for other lines of business Title (Direct Operations + Agency Operation) Mexican Casualty Insures E. **Other property** 1 Fire 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 2019-008 Page | 5 2.1 Allied lines 2.4 Private crop 2.5 Private flood 5.1 Commercial multiple peril (non-liability portion) 8 Ocean marine 9 Inland marine 12 Earthquake 21.2 Commercial auto physical damage 22 Aircraft (all perils) Crop Insurance coverage that is reinsured by the Federal Crop Insurance Corporation (FCIC), i.e. line of business 2.2 Multi-Peril Crop Insurance (MPCI), is exempt from this assessment. (Section 511 in the FCIC Act and 7 CFR 400.351 and 400.352.) Federal Flood insurance, line of business 2.3, is also exempt from this assessment based on “The Flood Peril and the Federal Flood Insurance Act of 1956.” 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) and (4) - 59A-7-6 A. (3) - 59A-7-4 (Z) and (CC) B. homeowner’s and farm owners’ - 59A-7-6 A. (22), (34) - 59A-7-4 (N), (R), (Z), and (CC) C. workers’ compensation - 59A-7-6 A. (55) D. other casualty, including surety and fidelity - 59A-7-6 A. (2), (4)-(21), (23)-(33), (35)-(54) and (56) - 59A-40-5 E. other property - 59A-7-4(A), (B) & 59A-7-6 A. (1) 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 2019-008 y - 59A-7-6 A. (2), (4)-(21), (23)-(33), (35)-(54) and (56) - 59A-40-5 E. other property - 59A-7-4(A), (B) & 59A-7-6 A. (1) 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 2019-008 Page | 6 - 59A-7-4 (C)-(M), (O)-(Q), - 59A-7-4 (S) & 59A-7-6 A. (28) - 59A-7-4(T)-(X) - 59A-7-4(Y) & 59A-7-6 A. (44) - 59A-7-4(Z)-(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 13th day of May, 2019. John G. Franchini 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