Expiration Date: May 16, 2018 – Replacing Bulletin Numbers 2015-014 and 2015-027 – Application of Me

SUPERINTENDENT OF INSURANCE John G. Franchini 505-827-4299 NEW MEXICO OFFICE OF SUPERINTENDENT OF INSURANCE NM OFFICE OF SUPERINTENDENT OF INSURANCE 2018 JAN -5 PM 3:56 DEPUTY SUPERINTENDENT Robert Doucette 505-827-5832 Bulletin 2018-001 January 5, 2018 (Replacing Bulletin Numbers 2015-014 and 2015-027) TO: EVERY INSURER, NONPROFIT HEALTH CARE PLAN, HEALTH MAINTENANCE ORGANIZATION, PREPAID DENTAL PLAN OR PREARRANGED FUNERAL PLAN TRANSACTING BUSINESS IN NEW MEXICO RE: APPLICATION OF MEDICAL INSURANCE POOL (MIP) CREDITS TO PREMIUM TAX LIABILITY, SECTION 59A-54-10 NMSA 1978 This Bulletin is issued pursuant to Section 59A-54-10 NMSA 1978 of the New Mexico Insurance Code and 13.1.2 et seq. NMAC. This Bulletin is effective immediately, and is issued to clarify the application of Medical Insurance Pool (“MIP”) credits to premium tax liability. This Bulletin replaces Bulletins 2015-027 and 2015-014, both of which are hereby permanently rescinded. The MIP, which is an entity separate from and not under the control of OSI, is expected to issue “Final Assessments” to participating insurance companies for the previous calendar year in May or June of each year. Insurance companies participating in MIP are eligible to apply MIP credits on their premium tax returns as provided for in Section 59A-54-10 NMSA 1978. The Office of the Superintendent of Insurance (OSI) will accept application of MIP credits to final premium tax returns using the following procedures: 1) MIP amounts recorded on the company’s MIP “Final Assessment” received the previous year and generating premium tax credits will be applied to the final premium tax return due the subsequent April. When determining quarterly estimated payments of the premium tax and the health insurance premium surtax pursuant to Section 59A-6-2(D) NMSA 1978, insurance companies may not claim MIP credits from quarterly “Interim Assessments.” company’s MIP “Final Assessment” received the previous year and generating premium tax credits will be applied to the final premium tax return due the subsequent April. When determining quarterly estimated payments of the premium tax and the health insurance premium surtax pursuant to Section 59A-6-2(D) NMSA 1978, insurance companies may not claim MIP credits from quarterly “Interim Assessments.” 2) If a company’s MIP credit, applied in the manner described in Paragraph 1 of this Bulletin, is greater than its tax liability, OSI will treat the MIP credit as a refundable Main Phone: 505-827-4601 Main Fax: 505-827-4734 Toll Free: 1-855-4-ASK-OSI Mailing Address: P.O. Box 1689 Santa Fe, NM 87504-1689 Physical Address: 1120 Paseo de Peralta Santa Fe, NM 87501 credit. OSI will issue refunds or carry over the funds that were accrued due to premium tax overpayments for up to three (3) years pursuant to Section 59A-6-5 NMSA 1978. 3) If a participating company receives a “Final Assessment” from MIP after the company’s final premium tax return is filed, the final premium tax return must be amended to reflect the change to the MIP credit. If a participating company receives a corrected MIP “Final Assessment” from MIP, the corresponding final premium tax return described above must be amended to reflect the change. A company shall submit an amended premium tax return no later than 30 days after date of the “Final Assessment;” failure to do so could result in the assessment of a penalty in accordance with Section 59A-6-4 NMSA 1978. 4) OSI requires companies to submit copies of all cancelled checks that were issued to MIP for the applicable year in order to receive a premium tax credit for participation in MIP. The cancelled check copies must display the front and back of the check(s) and exhibit that MIP has deposited the check(s). so could result in the assessment of a penalty in accordance with Section 59A-6-4 NMSA 1978. 4) OSI requires companies to submit copies of all cancelled checks that were issued to MIP for the applicable year in order to receive a premium tax credit for participation in MIP. The cancelled check copies must display the front and back of the check(s) and exhibit that MIP has deposited the check(s). 5) In the event that a company exits the insurance market in New Mexico, the company shall be entitled to receive a full refund of the MIP credit that the company earned in the tax year preceding its final year in business. 6) In the event that a company is able to demonstrate that it does not expect to have a premium tax liability in the immediately succeeding tax year due to (1) complete cessation of business or (2) cessation of all lines of business that would generate premiums subject to tax, the company shall be entitled to receive a full refund of unused, unexpired MIP credits. A company must demonstrate that it meets the requirements of this paragraph by submitting a verified statement with its final premium tax return or by submitting equivalent satisfactory documentation to OSI. A company participating in the MIP may meet the requirements of this section even if it retains a certificate of authority and continues to write nontaxable business (such as Medicare Advantage) in New Mexico. 7) In the event that an insurer has cause to have a reasonable belief that it will cease writing insurance in New Mexico, the insurer must alert OSI promptly and in no event later than six months in advance of the cessation of writing insurance. John G. Franchini JOHN G. FRANCHINI Superintendent of Insurance