SB 221 New Mexico Senate · 2025 Regular Session

ADDITIONAL UNFAIR INSURANCE CLAIMS PRACTICE

SB 221 amends New Mexico's insurance code to add a new prohibited practice (item P) targeting insurers. It bans insurers from treating an insured's routine inquiry about damage or loss as a formal claim when: the facts aren't covered by the policy, no payment is made, and the insured isn't being deceptive. This directly affects insurance companies operating in New Mexico by prohibiting this specific practice during initial customer interactions. The bill aims to prevent unnecessary formal claim processes for uncovered incidents, ensuring insurers don't misuse claim procedures for uncovered inquiries.

Bill status signed all 5 stages cleared

Introduction

Jan 2025

Committee Review

Mar 2025

Senate Passage

Mar 2025

House Passage

Mar 2025

Signed into Law

Apr 2025

Introduced Jan 31, 2025 Signed Apr 9, 2025

Maddy AI version diff · 1 comparison

What changed between versions

introduced version → Final Version · 10 edits

MAJOR

This bill amends New Mexico's unfair claims practices law by adding new prohibited practices and clarifying existing ones. The changes expand consumer protections by prohibiting insurers from treating inquiries about uncovered losses as claims, requiring prompt handling of catastrophic claims, and banning settlement tactics that force insureds into litigation or arbitration appeals. These changes strengthen consumer rights and ensure fairer claims handling processes.

Scope change

The bill expands the scope of prohibited unfair claims practices to include new categories of insurer misconduct and clarifies the treatment of insured inquiries versus claims.

REQUIREMENT

Added prohibition against treating insured inquiries about damage or loss as claims when facts are not covered in the policy

Added requirement to settle all catastrophic claims within 90 days after catastrophic claim number assignment

Added prohibition against compelling insureds to litigate by offering substantially less than amounts ultimately recovered

Added prohibition against attempting to settle claims based on altered applications without notice to insured

Added requirement to inform insureds of coverage after claim payment upon request

Added prohibition against delaying claims by requiring duplicate preliminary and formal claim reports

Added prohibition against failing to promptly explain denial basis or compromise settlement offer

Added prohibition against violating Domestic Abuse Insurance Protection Act provisions

Changed language from 'any of the following practices' to 'any and all of the following practices' for clarity

Reorganized and clarified the list of prohibited unfair claims practices with new letter designations

Floor votes · Senate Mar 11, 2025 · House Mar 21, 2025

How they voted

36–0

Passed · 4 other

Total votes 40

Mar 11, 2025

D Democratic24

21 Yea 3

87% Yea

R Republican16

15 Yea 1

93% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Apr 9, 2025

Signed into law

Signed

executive

Mar 21, 2025

Lower · Passed

passed House

lower

Mar 20, 2025

Lower · Passed

DO PASS committee report adopted

lower

Mar 15, 2025

Lower · Passed

DO PASS committee report adopted

lower

Mar 12, 2025

Introduced

Sent to House Government, Elections and Indian Affairs Committee & House Judiciary Committee

lower

Mar 11, 2025

Upper · Passed

passed Senate

upper

Mar 8, 2025

Upper · Passed

DO PASS, as amended, committee report adopted

upper

Feb 21, 2025

Upper · Passed

DO PASS committee report adopted

upper

Jan 31, 2025

Introduced

Sent to Senate Tax, Business and Transportation Committee & Senate Judiciary Committee

upper

3 primary · 0 co-sponsors