As used in Chapter 59A, Article 43 NMSA 1978:
A. "account" means any one of the three accounts created by Section 59A-43-5 NMSA 1978;
B. "association" means the insurance guaranty association;
C. "covered claims" means an unpaid claim of an insured or of a liability claimant in excess of twenty-five dollars ($25.00), including one for unearned premiums, that arises out of and within the coverage and not in excess of the applicable limits of an insurance policy to which Chapter 59A, Article 43 NMSA 1978 applies, issued by an insurer authorized to transact insurance in this state, if such insurer becomes an insolvent insurer after April 4, 1973; and
(1) the liability claimant or insured is a resident of this state at the time of the insured event; or
(2) the property from which the claim arises is permanently located in this state.
Subject to policy limits if lower, individual "covered claims" shall be limited to one hundred thousand dollars ($100,000) and shall not include any amount in excess of one hundred thousand dollars ($100,000), and the total amount of covered claims which may be asserted by any claimant, including also covered claims brought by any party on behalf of such claimant or as a result of injuries to such claimant shall not exceed one hundred thousand dollars ($100,000) per occurrence; except that the association shall pay the full amount of any covered claim arising under a workmen's compensation policy and that the superintendent may set a higher limit by regulation. "Covered claim" shall not include any amount due any reinsurer, insurer, insurance pool or underwriting association, as subrogation recoveries or otherwise; provided, that a claim for any such amount, asserted against a person insured under a policy issued by an insurer which has become an insolvent insurer, which if it were not a claim by or for the benefit of a reinsurer, insurer, insurance pool or underwriting association would be a "covered claim," may be filed directly with the receiver of the insolvent insurer, but in no event may any such claim be asserted in any legal action against the insured of such insolvent insurer. Covered claim shall not include any amount of an unpaid claim paid to an insured or liability claimant of an insolvent insurer by any person, including but not limited to an agent or broker whether or not an assignment is taken by such person, agent or broker. Covered claim shall not include supplementary payment obligations, including but not limited to adjustment fees and expenses, attorneys' fees and expenses, court costs, interest and bond premiums incurred prior to the determination that an insurer is an insolvent insurer;
D. "insolvent insurer" means:
(1) an insurer licensed to transact business in this state, either at the time the policy was issued or when the insured event occurred, and
(2) against which an order of liquidation with a finding of insolvency has been entered after the effective date of the Insurance Code by a court of competent jurisdiction in the insurer's state of domicile, or of this state under the provisions of Section 59A-41-30 NMSA 1978, and which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order;
E. "member insurer" means any person who:
(1) writes any kind of insurance to which Chapter 59A, Article 43 NMSA 1978 applies, including the exchange of reciprocal or inter-insurance contracts; and
(2) is authorized to transact insurance in this state;
F. "net direct written premiums" means direct gross premiums written in this state on insurance policies to which Chapter 59A, Article 43 NMSA 1978 applies, less return premiums thereon and dividends paid or credited to policyholders on the direct business. Net direct written premiums do not include premiums on contracts between insurers or reinsurers;
G. "person" means any individual, corporation, partnership, association or voluntary organization; and
H. "authorized to transact insurance" means that the insurer is an "authorized insurer" as defined in Section 59A-1-8 NMSA 1978.
History: Laws 1984, ch. 127, § 770; 1989, ch. 91, § 1.
ANNOTATIONSCompiler's notes. — Laws 1984, ch. 127, § 999 made the Insurance Code effective January 1, 1985.
"Covered claim". — A self-insured employer who has a claim against an insolvent insurer may qualify such claim as a "covered claim" within the scope of this article. In re Mission Ins. Co., 1991-NMSC-080, 112 N.M. 433, 816 P.2d 502.
Excess workers' compensation insurance policies are not reinsurance policies or indemnity policies excluded from the Property and Casualty Insurance Guaranty Law (this article). In re Mission Ins. Co., 1991-NMSC-080, 112 N.M. 433, 816 P.2d 502.
Payment of a premium tax, properly or otherwise, is not a condition precedent to asserting a "covered claim" under Subsection C. In re Mission Ins. Co., 1991-NMSC-080, 112 N.M. 433, 816 P.2d 502.
Prejudgment interest not "covered claim". — Prejudgment interest is not included within the definition of "covered claims" in Subsection C so as to be limited or excluded by the Property and Casualty Insurance Guaranty Law liability cap of $100,000 per occurrence on individual "covered claims." Also, no specific authority within the Guaranty Law is necessary to award prejudgment interest. The trial court has that authority under either 56-8-3 or 56-8-4B NMSA 1978. Aztec Well Servicing Co. v. Property & Cas. Ins. Guar. Ass'n, 1993-NMSC-023, 115 N.M. 475, 853 P.2d 726.
Am. Jur. 2d, A.L.R. and C.J.S. references. — Liability of insurer for prejudgment interest in excess of policy limits for covered loss, 23 A.L.R.5th 75.